You’re Only as Good as THEY Say

We’ve all heard the saying that “You’re only as good as your reputation.” While we all know that to be true on an individual and corporate/company level, but how much do we truly pay attention to it? The answer: not nearly as much as we should. According to a study by Compete.com, the traffic to consumer and user reviews skyrocketed by 158% in 2010 and continues to grow. Additionally, posting and commenting on these sites also increased 91% in 2011 (Wall Street Journal). On top of that, around 70% of consumers consult reviews or ratings before purchasing (BusinessWeek 2008). (Stop, let it all sink in. Ok, proceed…) Not only are more people posting, but more are reading reviews and re-evaluating purchasing decisions. So what does this mean? Several things actually:  The power of consumer influence is shifting to the PEOPLE (instead of traditional advertising), consumers don’t trust what companies say (as you’ll see below), businesses reputations are up for grabs, and progressive steps will need to be taken by marketers to harness this new platform/power and protect those reps.

Wrap your head around these facts*:

-90% of online customers trust recommendations from people they know

-70% trust unknown users

-27% trust so-called “experts”

-14% trust ADVERTISING

-8% trust celebrities

*Erik Qualman, Econsultancy

Based on those numbers, it’s clear to see that companies and advertising are fighting an uphill battle for consumers’ trust. And as we hopefully learned from reading one of my previous articles/entries, TRUST IS KEY. According to another study done by consumer behavior firm Yankelovich, more than 75% of people don’t trust ads. Couple that with the numbers above and it’s pretty easy to see that consumers are no longer as inclined to trust what advertisers say. In a nutshell, when it comes to certain areas of marketing and advertising, what people say matters, not ads.

 The other aspect of frequent posting, viewing, and utilizing of user/consumer reviews is what I like to call the “Amplification Circle of Life and Death” (Copyright pending. Just kidding. But seriously…). Because the digital footprint in this world is nothing short of MASSIVE, consumer-generated information is able to travel much faster and to a far greater amount of people than traditional advertising. Referring to a case done by Deloitte and Touche, 7 out of 10 people who read reviews share them with peers. So think of it as a pyramid: one person reads it, shares it with two friends, who each share it with two friends, etc. etc. and you get the point. Through this amplification process, there is still a great reach (such as in traditional advertising), but it carries more weight due to the trusted source. The “Life and Death” part is determined by what is being said about the company, product, or service. Depending upon the comment/review and its content, it can spell life or death for said target’s reputation on an individual OR mass level.

With the ever-ready Amplification Circle of Life and Death just waiting to be unleashed, it is critical that companies and agencies field special staff to monitor review sites. While any positive opinion or rating is a victory, it’s a minor victory at best; it’s the negative opinions that will stick with the consumers reading the reviews. For those of you reading this that played sports, how easy is it for you to remember you or your teams’ greatest victories? How easy is it for you to remember your toughest defeats? Which are more vivid? Most of you, like me, probably said the defeats. According to Tim Hart, negatives are much easier to remember because they teach us a lesson of what to do or not. He also says, “Impressions and opinions take seconds to develop, but years to change.” This means that a few negative comments or reviews could be detrimental to a product or brand. So how can consumer reviews be utilized to turn negatives into positives? Through a dedicated monitoring staff, feedback loops can be generated to understand what is causing the negative feelings and proactive steps may be taken to correct them. Additionally, staff can post positive comments in order to balance out or outweigh the negative. While the latter option is a little bit shady, let’s be serious, the almighty dollar rules corporate America.

So what is the purpose of my consequent rants? What nuggets of information do I want you to take away from this? Simply that user reviews are increasingly becoming a more significant part of our social media world and, much like Facebook, Twitter, and other platforms, it too needs to be monitored thoroughly. Monitoring feedback loops regarding opinions and feelings about a product, service, or company is crucial. You know the saying, “Caring is sharing”? Well, “Monitoring is protecting”—ok, so it doesn’t have the same ring, but you get the point. Monitoring can help restore the balance to a brand and eliminate troublesome situations. The world of marketing, specifically digitally, is changing rapidly, friends. It’s our job to keep up…

The REAL Domino Effect

          Think of delivery pizza and you don’t necessarily think of A-plus cuisine. But how about being considered grade-F cuisine only because you traditionally can’t go further down the alphabet on the grade scale? Well, that’s where Domino’s pizza found itself in 2008’s Brand Keys index of consumer taste preferences among national pizza chains, tied for dead last with Chuck E. Cheese’s—ouch[i]. After sales fell 6% in 2009, then CEO, Dave Brandon, and then President, now current CEO, Patrick Doyle, decided it was time to act on their plan for change for the nation’s largest pizza delivery chain. From 2007-2009, Domino’s had been ranked first in convenience and price among most customer satisfaction surveys. However, they had also consistently ranked near the bottom on taste. It was time to go for the “Trifecta” and get all three near the top of the rankings. How did Domino’s go about pursuing it? They listened to their customers (there’s a novel idea).

            Brandon, Doyle, and the Domino’s team decided to do a complete overhaul of its core product. For those of you playing at home, that’s an incredibly risky thing to do. Need I remind you of the time Coca-Cola changed their taste? Drinkers and fans almost unleashed carbonated anarchy. Brandon and team were well aware of the risks and ready to take that chance when he commented, “Once you’ve built a brand, that’s your brand. To change it means that everything you’ve stood for isn’t right…It’s time to make things right”[ii]. Not only did they completely retool the pizza’s crust, sauce, cheese, and other ingredients, they also retooled how they would re-establish their brand.

                                                            (Watch it. It's very insightful)

            Saying “sorry” is one of the hardest things to do. But that’s what Domino’s did; they launched a major ad campaign to apologize for their subpar product that they had been putting out and vowed to make it better. For starters, people love it when others own up to their own mistakes; people love it even more when the people owning up are millionaire executives who work for billion-dollar companies. I, for one, absolutely loved it. It takes some serious…cojones (that’s Spanish for “testicular fortitude”)...to do that. I never saw AIG or banks go around publicly apologizing for having to get mass bailouts from the government, or Toyota create an ad campaign apologizing for the hassle it causes consumers when a part is recalled. So with their apology part complete, they took the next step, commitment to correcting the problem. They did an excellent job of demonstrating to the customer that they were listening and were going make a whole-hearted effort to do their best at fixing what was wrong. They asked customers to send in pictures of their deliveries, cited specific examples of customer complaints in their campaigns, “…the crust tastes like cardboard”, came out with ads showing where the ingredients are grown and harvested, and cited surveys that customers had previously taken[iii]. In continuation with their revamped product, apology, and commitment to correction, Domino’s also decided it was time to repair their image.

            Domino’s brand image had taken a hit, but through research, social media utilization, and continued feedback loops with customers, they gained a new, more respected one. The pizza giant spent two years re-tooling their core product and innovation of their overall menu in order to provide more options to customers; currently, about 80% of Domino’s menu items were introduced in the last year and a half[iv]. Next, they tackled an area that had traditionally been a thorn in their side—social media. For years, blogs had been degrading Domino’s pizza quality. Domino’s instead reached out to these food bloggers who had bashed them in the past and took proactive steps to sway them by providing them with research, new surveys, and in some cases, samples. Furthermore, they began monitoring Twitter for feedback about their new product and ways to correct continuing errors. Finally, Domino’s invested time and effort into communication with customers to re-illustrate that they had been heard and their opinions would be valued. Most recently, Domino’s has run an ad about their new chicken and their “Rate Tate’s Chicken”, Tate being Tate Dillow, the head chicken chef. This involves more customer feedback and opinions about this new product by selecting varying levels of satisfaction about the taste of the chicken. To quote Patrick Doyle from this commercial, “I wanna hear from people. That’s the way we run this company.”

            So what did this entire product and brand image overhaul mean in terms of numbers and success to Domino’s? Was it worth the risk? ABSOLUTELY. After the ad campaign began to air in late 2009, profits more than doubled the very next quarter from $11 million to $23.6 million. Full year profits also surged by 48% to $79.7 million in 2010 from $54 million in 2009[v]. If that isn’t enough, Domino’s vaulted to No. 1 in the 2010 Brand Keys taste index[vi]. Not too shabby if you ask me. So, much like Hardee’s similar apology campaign in 2004, the risk was completely worth it. Not only did profits increase, but customer satisfaction appears to be at an all-time high. Currently, Taco Bell is taking a page from Hardee’s and Domino’s and running a campaign to combat speculation about the quality of their meat recipe by telling consumers it’s “88% premium ground beef and 12% signature recipe.” Now I may not be able to pronounce half of those ingredients in their “signature recipe”, but at least they’re being honest. I respect them for that. Also, word on the street is that they’ve already started seeing an increase in sales.

In conclusion, kudos to you Mr. Brandon and Mr. Doyle for taking a serious risk of reworking your core product, listening to your consumers, providing opportunities for feedback, and for taking responsibility by apologizing for past transgressions, it’s very refreshing. The moral of this story is that apologizing, along with a well thought out marketing plan to back it up, equals success and great returns, or at least in the recent world of the fast food industry. I wonder how many points I could bump up my finance exam if I made an artistic video apologizing to my finance professor for my performance on his last exam and posted it on YouTube. Alas, I feel that may be too great a deficit to overcome…

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[i] Horovitz, Bruce. "Domino's Pizza Delivers Change in Its Core Pizza Recipe - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 16 Dec. 2009. Web. 04 Mar. 2011. <http://www.usatoday.com/money/industries/food/2009-12-16-dominos16_ST_N.htm>.

[ii] Horovitz, Bruce. "Domino's Pizza Delivers Change in Its Core Pizza Recipe - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 16 Dec. 2009. Web. 04 Mar. 2011. <http://www.usatoday.com/money/industries/food/2009-12-16-dominos16_ST_N.htm>.

[iii] Farhi, Paul. "Behind Domino's Mea Culpa Ad Campaign - Washingtonpost.com." Washington Post - Politics, National, World & D.C. Area News and Headlines - Washingtonpost.com. 13 Jan. 2010. Web. 04 Mar. 2011. <http://www.washingtonpost.com/wp-dyn/content/article/2010/01/12/AR2010011201696.html>.

[iv] Wiesendanger, Betsy. "Change at Domino’s." Nyse Magazine. Web. 04 Mar. 2011. <http://www.nysemagazine.com/dominos?page=3>.

[v] "Domino's Says New Recipes, Frank Ad Campaign Help Double Profit - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 2 Mar. 2010. Web. 04 Mar. 2011. <http://www.usatoday.com/money/companies/earnings/2010-03-02-dominos_N.htm>.

[vi] Dentch, Courtney. "Domino’s Changing Recipe to Help Lift U.S. Sales (Update2) - Bloomberg." Bloomberg - Business & Financial News, Breaking News Headlines. 16 Dec. 2009. Web. 04 Mar. 2011. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aapXMS5qu0YU.