Recently I did a blog post about the bold strategy of Domino’s Pizza changing their pizza recipe in response to customer feedback and in hopes of increasing sluggish sales.

Apparently, the initial campaign has been a resounding success.  In fourth quarter 2008, Domino’s saw profits of $11 million, or 19 cents a share.  This past quarter they saw their profits increase to $23.6 million, or 41 cents a share.  That is an amazing result especially given the current sluggish state of the economy.

It seems as though the strategy has worked in the short term.  As the AP article I found on the subject states, “The question remains, though, whether Domino’s can keep the momentum going, or whether the novelty of the new recipe will wane.”

I believe if Domino’s can continue their involvement in social media to supplement the campaign, they may be able to see sustained success with this strategy. This could be where they see a large segment of new customers who perhaps may not have tried the new recipe otherwise.  I’m basing this on the supposition that people will see their “friends” in social media spaces talk about the product and based on their friends’ input, a new segment of people will try the pizza.

The problem is, when this campaign first began, Domino’s was using a lot of television advertising to supplement the new website and social media campaign. A lot of people who saw those commercials and were interested in the new recipe most likely tried it once (based on the  profit figures).  However, if the ads don’t continue to remind people about the new recipe and continue to promote the Domino’s brand, they could see an even bigger drop off in sales.

If I were in charge of the campaign, I would start supplemental ads regarding the popularity of the new pizza recipe that would include metrics of their success. Perhaps something like, “X out of X people LOVED the new taste of Domino’s Pizza! Why not try it and see what everyone is talking about?” Then it includes the people who have tried it and reaches out to those who have not as of yet.

Recently Domino’s Pizza announced they were changing the recipe for their pizza.

In the above-linked USA Today article, consultant Howard Gordon mentions “I don’t know of any (restaurant) company that has attempted this.” In any industry, changing a winning formula seems like business “suicide.”  Gordon later makes a powerful statement; “Once you’ve built a brand, that’s your brand,” says Gordon. “To change it means that everything you’ve stood for isn’t right.”

This youtube video is a short documentary that was edited into a commercial I recently saw on TV.  It tells the story of how Domino’s received feedback from customers about their pizza (via Twitter users, mostly) and took those criticisms and used them as motivation to make a better pizza.  Dominos has set up an exclusive website for the campaign where customers can view the documentary as well as a Twitter feed featuring tweets about the new pizza.  Obviously they haven’t filtered or changed the tweets because some of them are pretty critical of the pizza.  One such tweet says “Dominos new pizza crust recipe is like eating really buttery, garlicy bread…fail. Bad breath factor, over the top!”  Yikes.  Again, this is all part of the campaign, so I suppose you have to take some bad with the good feedback.

So why make such a drastic change?

Many companies try to improve the quality of their product or even advertise they have a “new and improved” product.  However, publicly admitting in one of your advertisements that people didn’t like your product is either sheer madness or pure genius.  Perhaps this means Domino’s is the first mature company that will drastically change how others do business.  There are numerous companies in the mature stage of the product/company lifecycle.  Maybe when growth stagnates, you throw a “hail mary” and go for it all? Due to the unprecedented nature of Domino’s Pizza’s strategy, there isn’t really much to compare it to.  Again, maybe since no one has thought to do this before, they are on to something here.

Think of the costs associated with doing something like this.  I’m sure there were plenty of focus groups (some were featured in the documentary), new product development, marketing research, advertising, etc.  This was not just an ordinary marketing campaign.  I can only guess that either the execs at Domino’s thought the amount of publicity a “stunt” like this would create would exceed the value put in to the change or they were truly desperate to make significant change to turn around the company.  What other reason would there be for alienating your best customers that loved your pizza and have kept you in business for fifty years?  I would think they’d have to gain _many_ new customers and retain a lot of their long-time ones to make this venture a success.

For most of my career after college, I have worked in the Financial Services industry;  primarily for banks and mortgage companies. I’ve had the experience of working for Wells Fargo during that time so I am familiar with their culture.

With social media being so popular, there are a glut of companies that are participating in it and Wells Fargo is no exception.  Since Twitter is the current “next great thing”, what company wouldn’t want to increase brand awareness and put their message out to millions of new potential customers?

I think, however, they’re going about it the wrong way.  Their Ask_WellsFargo Twitter account (the only one they appear to have other than a placeholder account under WellsFargo) acts as a customer service web portal for their customers to ask questions and get responses from whichever Wells Fargo employee is “manning” the account at the time.

Here’s a sample of what Wells is doing on Twitter now-

Wells Fargo on Twitter

Wells Fargo on Twitter

While I think this is an effective customer service strategy, I think using this venue makes for a poor brand/marketing strategy.  People interested in finding out more information about the different business units of Wells Fargo will come away with nothing from their tweets.  Where can someone find details about the merger with Wachovia?  I’m sure if I sent an @reply at them I’d get some sort of response, but the space could be used so much better.

Wells Fargo does a good job sharing this type of information on their blog, but I think Twitter could be a useful tool to get quick bits of information about their products out to the “Twitterverse” and Wells is passing up the opportunity.

Just think of the opportunities that banks could take advantage of with Twitter.  Followers could get early notification of a bonus rate if they open a savings account.  Or Card Services could offer a low introductory rate on credit cards through a tweet.  Home Mortgage could communicate changes in interest rates.  There are many, many possibilities.

What are other banks doing in this arena?  Not much really.  Citibank has one post just saying hello.  Bank of America has the same strategy as Wells.  This is obviously a topic that can be further researched and the financial services industry as a whole has a ways to go before they are a significant presence on Twitter.

One would think with all of the regulations in the banking industry, banks would be more careful about dealing with customer service issues online.  Ask_WellsFargo always tells people not to share confidential information when posting, but sooner or later someone will include their account number or other sensitive information and might blame the bank.  The other drawback to this strategy is Wells Fargo is making a lot of problems their customers are having with their bank public.  Yes, they also communicate when the problems are fixed, but it seems risky to have a public forum where all can see what goes wrong with your brand.

In essence, I think this is a weak marketing strategy and Wells Fargo should consider other ways to effectively use the great marketing tool that is Twitter.

I’ll just use the default WordPress greeting for now.  I have decided (finally) to do a blog.  Topics I will cover will range from marketing, tech products, software, social media, music, sports, and whatever else pops into my mind.  Can’t wait to get started on this.  Hopefully I’ll get this changed over to my domain at chriswalterbach.com once I figure that out on WordPress.   I also hope I can do another post very soon!

Thanks for checking this out!