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It may promise to deliver a pizza in less than 30 minutes but the strategy that saw Domino’s serve up sales of £351m last year, up 18.4 per cent, took rather longer to cook up.
The ingredients were put in place at the end of 2005, shortly after current chief executive Chris Moore was promoted to chief operating officer.
He put in place a strategy, designated Vision 2010 (which, in light of the take away chain’s recent success, has subsequently been extended to Vision 2017) to improve Domino’s market share and financial performance.
Like the end product that arrives at a customer’s door, Moore’s strategy appears deceptively simple. He focussed on three key areas: service, products and people.
Ever since Domino’s Pizza was founded in 1960, the chain has highlighted its ability to deliver an order within 30 minutes. According to Moore, the key to fulfilling this promise is the ‘out the door’ time – the time it takes from the phone being answered until the pizza leaves the store.
At the beginning of 2006, the average ‘out the door’ time in UK stores was 17 minutes. Vision 2010 aimed for an ‘out the door’ time of 14 minutes. ‘We knew that there was a direct correlation between how fast the customer gets their pizza and their propensity to reorder,’ explains Moore.
Stores took individual steps to shave time off this key metric, but healthy competition also played its role. Moore introduced screens in each store, highlighting the ‘out the door’ times achieved by other stores in the region.
Last year Domino’s ‘out the door’ time averaged 13 minutes which, with a maximum 10 minute delivery time, means most orders arrive within 23 minutes. The installation of special pizza ovens might shave a further 90 seconds, but that’s about the fastest time achievable, claims Moore. Any sooner and customers are suspicious that the product has merely been reheated.
Shaving three minutes off this key metric has translated into an average 11 per cent increase in sales per store, as customers have shortened the time between orders from an average once every 42 days in 2006 to around once every 37 days.
But to get customers to order, they have to know what is on offer. Moore increased the annual contribution of Domino’s franchisees (who operate its 553 stores) to the chain’s national advertising budget from 4 per cent of sales to 5 per cent, enabling it to sponsor TV favourites such as Britain’s Got Talent. When the final aired last June, like-for-like sales rose 15 per cent that Saturday.
Last year, each store contributed an average £35,000 to the marketing pot enabling Domino’s to run six national advertising campaigns, of which five carried details of new products. ‘We’re not proud,’ says Moore. ‘We’ll beg, borrow and steal successful ideas and adapt them for the UK taste.’
The company also increased the number of phone lines per store from an average of four to 11, and in some cases 20, to handle the extra calls generated by these campaigns. While most lines fall silent between 9pm on a Saturday until 5pm on a Friday, having this extra capacity helps Domino’s achieve its target of answering every call within two rings.
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