Trading Newsprint for Pepperoni
Is Dave Brandon fat and happy at Domino’s Pizza? You bet.
“I learned early how to order pizza from the company store and put on five pounds already,” says Brandon, who celebrates his four-month anniversary as Domino’s president-ceo this month. He joined the Ann Arbor, MI, company after 20 years at the helm of Detroit-based Valassis Communications.
The appointment raised eyebrows in quick-service restaurant circles – Brandon has no restaurant experience – but not on Wall Street. Observers speculate that Bain Capital, the Boston-based investor group that bought Domino’s in ’97 for $1 billion, is readying the 6,200-store chain for an initial public offering. Brandon could be just the man to do it: The skills he honed taking Valassis public in 1982 could keep Domino’s on track.
“There’s a distinct possibility it’ll be taken public,” Brandon says. But even without an IPO, “we want to develop the infrastructure, brand image, and operational expertise to compete nose-to-nose with anyone out there.”
The oven’s already on; Brandon’s just going to turn it up a few degrees. “The brand has been operating successfully for a long time here. My job is to implement some management programs that take the company to a new level.”
Sales rose 12.6 percent to $1.2 billion last year, according to Hoover’s, double the industry growth rate of six to seven percent. Already the biggest pizza delivery chain in the country, Domino’s will pump sales further by adding stores judiciously, continuing product and delivery improvements, and aggressively targeting families to buy more pizza more often. New ads broke in June touting fresh ingredients and Domino’s Heat Wave delivery case. Next on the docket: More database marketing and local promotions with neighboring businesses.
Some franchisees already are tailoring offers based on household purchase history. Brandon plans to take such efforts national, tapping the rich database that’s a natural leftover of the pizza-delivery business. “We have people calling us directly and telling us who they are, where they are, what they like to buy, and what they bought in the past,” he says. “We don’t have to invent smart cards and come up with incentives for people to tell us all that – those challenges we wrestled with in the grocery world.”
Don’t expect those coupons in Sunday FSIs to disappear, though. “Promotion will always play a significant role at Domino’s and in the pizza category,” Brandon asserts. “It’s a high-impulse purchase [that] responds well to purchase incentives.”
Brandon helped pioneer fast-food FSIs in his early days at Valassis. He set up single-market and regional buys to accommodate franchisees who didn’t want a national FSI. Franchise sales are now a $100 million to $150 million business for Valassis, Brandon says. While building the business, “I met with and sold to a lot of franchisees. I feel very comfortable knowing what their objectives are.”
Domino’s likely will heavy up on local promotions, tweaking partnerships that have put the brand in unlikely places, like the backs of General Mills cereal boxes. “We love to consider cross-promotion opportunities,” Brandon says. “We’ll be more effective in local promotions. There’s a tremendous opportunity for stores to become more connected with their communities and get involved [with cross-promos] on a local level.”
Pizza makes a great marketing partner because it’s invited right into consumers’ living rooms. “People are passionate about pizza. Americans eat 18 acres of pizza every day. It’s a fun brand to work with,” Brandon says.
`That national appetite could take Domino’s all the way to Wall Street. In the meantime, the company store should stay busy.
