The major brands in the pizza industry, such as Domino’s, Papa John’s, and Pizza Hut, have made countless mistakes and learned valuable lessons over the years, which is great news for pizza brands like yours. Instead of making your own costly mistakes, you can learn from what these big guys are doing right, and begin to implement your own versions of these systems. So here are 10 important lessons that you can learn from the three biggest pizza chains in the world.
1. Find What You’re Good at and Focus on It
As a pizzeria owner, you always want your company to be the best in every aspect. But in an industry with over 78,000 competitors, that’s simply impossible. So instead, find a specific area that you excel at, and really lean into it.
Domino’s is an excellent example of this. Back in the late 2000s, they were widely regarded as a pizzeria that served very subpar products. However, the one area that they consistently ranked among the best in the country was their delivery program. So what did they do? They invested significantly more time and money into their delivery system to help make it as advanced as possible. The result? They became the first pizza to ever be delivered by a drone, introduced the food delivery tracker to the world, and created Twitter ordering.
So how does this relate to you and your pizzeria? Take an in-depth look at your business and see what you do best. Is it your advanced delivery? Your consistently positive customer experiences? The high quality of your ingredients? Whatever it may be, you should focus on it and use it to prop your restaurant up above the rest of the pizzerias out there.
2. Fully Embrace Technology
Something that these major pizza brands all have in common is a strong commitment to technology. While some people might think there’s a certain romanticism to sticking with the old ways of taking orders by pen and paper, it’s the way of the past, not the way of the future. So if you don’t want your brand to become obsolete a few years from now, you’ll need to follow in the footsteps of places like Domino’s and Pizza Hut by fully embracing technology.
According to senior analyst Lauren Silberman with Credit Suisse, 50% of the staff at Domino’s head office are in tech roles.
This means getting an advanced POS system that maximizes the convenience of the ordering process, expanding your delivery service to include things like contactless delivery, and regularly updating these systems to stay up-to-date.
3. Encourage Multi-Unit Franchisees
If franchising is something that you are looking at or are currently involved with, then you can learn a great deal from the big 3 brands, all of which work with franchisees. One of the common methods they all use while franchising is heavily encouraging franchisees to take on multiple units (called “fortressing”). According to Lauren Silberman, a senior analyst at Credit Suisse Securities, a significant portion of Papa John’s franchisees own 5+ locations, while Domino’s sits at 7+ locations, and Pizza Hut has a handful of franchisees who own hundreds or even thousands of locations.
There are many benefits to encouraging multi-unit franchisees, some of which are lower fixed costs and easier access to financing. So rather than trying to bring in as many franchisees as possible, aim your efforts at getting your current or new franchisees to take ownership of multiple units.
4. Use Reporting to Study High-Volume Sales Neighborhoods
Location is one of the most important factors when expanding your business. To make sure that you’ve picked a profitable location for your new store, you’ll need to do what Domino’s does, which is closely study your data.
With the help of sales reports and heat maps, you can accurately identify the areas most of your sales are coming from. You can then set up additional locations in areas with a proven demand for your product.
5. Value Customer Data Over Profitability
A common mistake that even the biggest restaurant brands have made during the early stages is making profitability their number one priority. The problem with doing this is that it often comes at the cost of things like access to customer data.
While maintaining or increasing profitability is a good short-term goal, having detailed customer information is a long-term benefit. This is because trying to get a new customer costs up to 16 times more than keeping an existing customer.
If you switch to using aggregator ordering services like GrubHub, you don’t have a record of a customer’s address, phone number, email, order frequency, or other important criteria. This makes it virtually impossible to direct market to them. At this point, you’re buying orders, not winning new customers. And if your goal is sustainability and growth, this is the wrong way to go about it. That’s why brands like Domino’s, Papa John’s, and Pizza Hut cut deals with aggregator services that allow these restaurants to have access to the data of individuals who order from them.
By using modern technology, encouraging fortressing from franchisees, accessing sales data, and prioritizing customer data, you can help put yourself on the track to becoming the next big pizzeria brand.
