Dominos didn’t compete to find expensive high traffic locations with large in-room dining areas. They didn’t compete by having a bigger yellow page ad or offer steep discounts to win over new customers from other pizza businesses. And based on the results we get when we ask the question in our keynote speeches or corporate training events, it is a safe bet their success didn’t come about because they competed to come up with the recipe for a better tasting pizza.
The innovation they added was simple – Delivery. They skyrocketed from an unknown store in June of 1960 in Ypsilanti, Michigan, to the second largest pizza company in the world with current annual revenues of approximately $1.7 Billion. This was accomplished by creating and investing in a simple marketing idea that would significantly reduce the cost for growth and position them on the top rung of a whole new market ladder.
Dominos was now able to lease or buy much smaller, less expensive, locations that didn’t require high traffic or bigger footprints necessary to accommodate in-room dining. With this new model all they needed was enough space to store ingredients, a prep area, ovens to cook the pizza, an order counter with a small waiting section and a couple of parking spaces for their delivery vehicles. These locations were often in strip malls near college campuses, military bases or other spots where there was a high concentration of their ideal customer demographic.
What You Fight to Get, You Often Have to Fight to Keep
If you have to fight your competition for customers you will likely have to fight even harder to keep them. Competing for customers with a similar offering will deplete resources and limit growth. The most wasteful spending in marketing is money spent attempting to change your prospects mind with similar offers. Your goal is to preempt your competition by positioning the unique value you offer first in the minds of your customers before it can be discovered elsewhere.
“There is no such thing as a limitation of resources
when you exercise your resourcefulness!”
- Scott deMoulin
If you already have an established business or product offering with strong similarities to your competition then your goal is to take the focus off of the similarities and place it on areas that can be differentiated. This can be done through offering an unmatched risk-reversal guarantee or warranty or implementing better training for your team in sales, customer service and market communications.
You can also achieve success by finding a niche or becoming more focused within an existing market. In-N-Out Burger accomplished this in the very competitive fast-food burger market by offering a very simple and short menu of made to order burgers using only fresh ingredients. They were able to pull this off because they have only a handful of items on the menu and even their French fries are cut from real potatoes on site just prior to cooking.
This was a unique and welcomed alternative to what was currently available in the burger market. They give their customers what they want and make it easy to do business with them. There is even an “underground menu” of items not shown on In-N-Out’s menu that can be ordered by those “in the know.” This helps to create exclusivity, community and loyalty with their customers. Add that to better customer service because of efficiency, better pay and staff training and the result is more frequent customer visits and free word of mouth advertising.
Chipotle has achieved comparable success in the Mexican fast food business using a similar model – Fresh products with a very simple, and limited, made to order menu.
Being creative and innovative doesn’t mean you have to start from scratch. Avoid wasting resources attempting to create a new business model. Look for proven examples of what other companies have already done to innovate, create uniqueness, value and success in other industries, markets - or even other countries. Get curious as to how, with a little adaptation, they might work in your business. For example:
Instead of trying to compete with rental car giants Hertz and Avis by following the current rental car paradigm and opening expensive airport rental car locations, Enterprise used a model similar to Dominos Pizza. They added a free pick up and delivery service, combined with their less expensive suburban locations, to become the largest rental car company in the world. Like Dominos, Enterprise became unique by adding value to their customers to achieve much faster growth and success.
I recently traveled to work with a consulting client in Australia and had the chance to meet and work with Janine Allis, CEO of Boost Juice. While on holiday in the United States with her husband years ago, she noticed an idea that she thought might work back home. Modeling a juice bar company in the U.S. she returned to OZ and founded Boost Juice in 2000, which now boasts approximately 250 locations in numerous countries.
Janine enhanced the model by following some other key success points like creating a fun store culture combined with creative and educational marketing ideas that are more focused and less expensive to employ. She shared her lofty goal with me to have over 1000 stores, under 5 different brands by 2018. She believes in a simple, “less is more” philosophy and she and her staff are constantly in search of the answer to the question; “How can we give our customers a reason to choose us every day?” The answers to this question results in their commitment and focus for ongoing creativity, innovation and improvement
1. Competing for clients and market share is the most expensive way to grow your business and usually results in price competition, discounting wars, extra effort and thinner margins.
2. To distinguish your business you must be both unique and have a product or service that adds more value or benefit to your customers. If you can't add value nobody wants it and if you aren't unique you are destined to compete with others in your space.
3. Improved customer service, sales and marketing communications and offering an unmatched guarantee or risk reversal policy are other key ways to stand out in a highly commoditized market.
4. Model the successful innovation in other industries, markets and/or countries that can be duplicated in, or applied to, your business. No need to reinvent the wheel.
5. Get curious and become more conscious about creating and innovating instead of competing.
“The best way to predict the future is to create it.”
- Peter Drucker
Wishing you success in creating business that makes more meaning!
Scott deMoulin - Founder, Destiny Training Systems
Over the past 30 years Destiny Training Systems has facilitated consulting and training for over 480 companies and thousands of Entrepreneurs from around the world.