Running Head: DOMINO’S PIZZA 1

Domino’s Pizza:

A Direct/Interactive Marketing Proposal

Ashley N. Peterson

West Virginia University

IMC 616

May 18, 2015

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Domino’s Pizza:

A Direct/Interactive Marketing Proposal

Domino’s Pizza, the number one pizza delivery chain in the United States based in Ann

Arbor, Michigan, has grown to over 9,000 corporate-owned and franchise locations in all 50

states and 62 international markets since its humble beginnings as a local pizzeria in 1960.

Operating in the Quick Service Restaurant (QSR) industry, Domino’s competitors include large

chains Pizza Hut and Papa John’s, as well as the countless regional and local pizzerias across its

footprint. With a strong brand identity, convenient locations, and affordable menu offerings,

Domino’s has the opportunity to enjoy continued growth, building off a large boost experienced

in the past few years (Sauber, Marold, & Anderson, 2011).

Domino’s Marketing Today

To increase domestic sales, Domino’s Pizza is focused on driving growth in two main

areas, their menu and technology, which is supported by their robust marketing strategy. Over

time, Domino’s has built their reputation as being innovative in terms of technology by being an

early adapter of online channels. This included the early development of their website, ability to

order through interactive television, and ordering via SMS (Sauber, Marold, & Anderson, 2011).

As an effort to turn around the not-so-great reputation of the taste of their pizza,

Domino’s launched a new recipe in 2010 with multiple integrated campaigns that promoted the

chain’s dedication to listening to consumers and transparency. Since 2008, Domino’s has also

focused on expanding their menu to include sandwiches, pastas, and specialty pizzas along with

their sides and desserts. Today, Domino’s is focused on new and emerging media to reach its

international customer base by using email marketing, search marketing, a mobile application

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and website, interactive ordering, and social media presence via Facebook, Google +, and

YouTube (Sauber, Marold, & Anderson, 2011).

Direct/Interactive Marketing Tests

Domino’s Pizza would like to expand their direct/interactive marketing strategy to

achieve two objectives: (1) Increase their carryout business without decreasing their delivery

business and (2) Drive customers to place more orders through the Domino’s mobile application.

Because the chain has already set expectations for international sales to grow and exceed

domestic sales, these tests will focus on the latter (Sauber, Marold, & Anderson, 2011). The

following tests focus on ways in which Domino’s can improve carryout penetration among the

18-24 population, penetration among households with children, mobile application sales among

young professionals, as well as embark on daily deals again through Groupon. With a budget of

$300,000, as outlined in Appendix A, each of these tests will be executed across a three-month

period to be analyzed and presented in the fourth month.

Improving Carryout Penetration For Ages 18-24

The 18-24 age group contains individuals who are experiencing a wide range of life

changes, from graduating high school, starting college, making their way through their

undergraduate years, to getting their first “real world” job or moving on to graduate school. Most

importantly, this group is a part of the unique Millennial generation. What is most important to

marketers when it comes to this group is that they are more than likely out on their own, making

their own decisions for the first time, and it is up to companies to tap into their decision-making

processes to put their brand top of mind.

To be able to focus on increasing carryout penetration among this group, Domino’s

should target college towns where there is a definite concentration of 18-24 year olds. For the

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purpose of the three following tests, Domino’s should leverage the following five top college

towns identified by the American Institute of Economic Research (AIER) as their test markets:

Ithaca, NY, Ames, IA, Corvallis, OR, Charlottesville, VA, and College Station, TX (Jacobs &

Stone, 2014). These college towns provide Domino’s with demographic and geographic diversity

to launch the following tests to drive carryout orders. Domino’s can use the age, graduation year,

and zip code selects of the “College Students Mailing List” to create their test lists and reach the

college student demographic by email and phone (NextMark, 2013).

Test #1: Weekend Carryout Coupons (Text To Landing Page)

A Ball State University study found that text messaging far exceeds email and instant

messaging as the main form of communication between college students. According to the study,

97% of students send and receive text messages, while about a quarter use the other forms

(Associated Press, 2010). With such a large amount of this group using text messaging

throughout the day, it is important for marketers to see how they can positively disrupt this form

of personal communication with added brand value.

This text campaign will run from September to November, with targeted college students

being contacted once per month on the third Friday of each month in the afternoon. Because text

messaging is perceived as a form of personal communication, marketers must be sure not

overuse coupons when marketing via text (Spiller & Baier, 2012). For this reason, the text will

be used to drive recipients to a game-like coupon reveal landing page, revealing carryout-only

coupons that must be shown upon pickup. Each offer will contain a coupon redeemable for a

pizza and another subsequent menu item, such as a sandwich, pasta, or dessert, providing

students to get discounts on multiple meals for themselves or to share with friends. Domino’s

will be able to track this campaign using coupon redemption to link the test to actual sales, while

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also understanding engagement through using open rate, click-through rate, and opt-outs. The

text copy will be similar to the following:

Craving pizza? Get your weekend carryout coupon for your [insert nearest location] Domino’s

today! [insert bit.ly] Reply STOP to cancel future messages.

Test #2: Carryout Coupons via Email

While college students may be more apt to use text messaging on a daily basis when

communicating with peers, 21% of US college students prefer brands send information via email

(eMarketer, 2015). Similar to the text message campaign, emails will be sent to this population

every second Saturday late morning from September to November directing them to the same

game-like coupon reveal landing page. By running this concurrently with the text campaign,

Domino’s can understand what channel drives more sales during the semester. Domino’s will be

able to track the success of this test in the same fashion as the text message campaign, focusing

most on coupon redemption to understand the test’s affect on sales.

Test #3: College Newspaper Inserts

As college students shift their overall news-reading habits from print to digital, the

college newspaper is still a channel in which marketers can reach the 18-24 age group given the

unique and highly relevant nature of its content. As some campuses continue to use print and

others are experimenting with digital, Domino’s still has the ability to reach these students where

they are. For testing purposes, Domino’s will want to place inserts in the campus newspapers of

the colleges in each of the test markets. The insert will be placed in one weekly issue in

February, March, and April, and contain a carryout offer for students to bring into their local

Domino’s store. To track the success of this test, Domino’s will be able to measure redemption

of the coupons from each newspaper placement.

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With each of these tests, it is very important for Domino’s to incorporate links to or

badges of their social media channels. Given this population’s high social media use, making

them more aware of the sites can ultimately extend the company’s engagement with this group

beyond just ordering with their special carryout coupons.

Improving Penetration For Households with Children

With 20% of households with children purchasing pizza more than three times per month,

this segment is very promising for Domino’s in terms of sales. The test market for the following

three tests will be the top city for families identified by Parenting Magazine (n.d.): Boston, MA,

which also provides a highly diverse population according to a recent diversity index

(Priceonomics, 2014). Domino’s can leverage the Zip Code select of the “Households with

Children (by ethnicity)” mailing list to develop their target list in Boston (NextMark, 2013).

Test #1: Postcard

Based on a 2012 study, postcards are the highest read mail pieces received by

households, with a 55% read rate. Specific to restaurants, 50.9% of households read pieces

immediately and 25.6% households will respond (Direct Marketing Association, 2014).

Consequently, Domino’s must craft offers that are relevant to families to not only catch their

attention, but also drive a response. Because of this, it is recommended that this piece include

special “Family” offers that range from multiple pizzas, to pizzas with dessert, to pizza with a

side and a drink, which will be enough to feed multiple people. Domino’s can track the success

of this mailer by coupon redemption rates during the three-month test period of June to August.

Test #2: #MyDominosFamily Campaign

In 2010, Domino’s ran the integrated “Show Us Your Pizza” campaign, where customers

shared photos of the pizzas that they ordered for a chance to win $500 (Maloney, 2015).

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Similarly, the #MyDominosFamily campaign will be a three-month campaign, from October to

December, supported by a microsite (www.dominos.com/mydominosfamily) giving families the

ability to take and share fun and creative pictures with their Domino’s orders. To keep the

momentum going, there will be monthly smaller prizes, such as small electronics, to be awarded

at the end of each month and a grand prize of $1,055 to commemorate the close of the 55th

anniversary of the chain. Each prize will be determined by a random drawing of submissions.

The campaign will launch with announcements via social media and TV ads. While the

overall campaign will be national, families within the test markets will be incentivized with

special coupons via email and direct mail (for those that Domino’s does not have an email)

during the test period that will share special redemption codes that will reveal a coupon code

upon photo submission. When submitting a photo, families will have to upload their photo,

provide their family name, and answer appropriately to “Did you receive mail (electronic or

physical) with information about this contest?” By having families answer this question,

Domino’s has the ability to track whether or not the coupons drove increased submissions and

sales in the test markets in comparison to the rest of the nation.

Test #3: Direct Response TV Ad

To attract the family segment, Domino’s can leverage primetime hours when families are

watching television to place a 30-second, short-form direct response TV ad. When ordering

online from Domino’s, customers have the option to place future orders, and this direct response

ad will leverage this option to promote convenience for family meals. The commercial will

feature a family trying to decide what to eat for dinner and they, of course, decide on Domino’s.

The ad will feature messaging similar to “Make dinner easy for your family. Place your future

order today!” followed by a 1-800 number for viewers to call. The phone number will direct

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customers to an automated interactive voice response system that will allow them to input their

zip code to be routed to their nearest store to place their future order. By placing it during

primetime, Domino’s is reaching customers more than likely after they have eaten dinner that

night, and give them the ability to plan ahead for the next night or upcoming weekend’s dinner.

The 1-800 number paired with the input of zip codes will allow Domino’s to track orders that

were placed as a result of the ad as well as where the orders came from geographically.

Increasing Mobile Sales To Young Professionals

The young professional generally refers to the group of white-collar employees who are

in their 20s and 30s with a college degree. While this group is success-driven, entrepreneurial,

and trying to seek the perfect work-life balance, they are also inundated with technology. As

today’s on-the-go, technology-driven population, the young professional makes a great target for

Domino’s to focus on to increase their mobile sales. Domino’s can leverage the top cities for

young adults to create their test markets, which, for the following tests, will include Des Moines,

IA, Raleigh, NC, Madison, WI, and Salt Lake, City, UT (Brennan, 2011). Domino’s can leverage

the Zip Code selects of the “Students and Young Professionals” mailing list to determine their

target list (NextMark, 2013).

Test #1: Emails Including Mobile Application Links

Domino’s has the opportunity to leverage Bitly’s Deep Linking tool to drive mobile

application installs and re-engagement through the app. This tool helps marketers by doing the

following: “App users who click on your Bitlinks will be taken to the right location in your app,

invited to install your app or taken to the mobile web experience” (Bitly, 2015).

In the case of Domino’s, when sending emails to their opted-in customers, they can

include the Bitly deep link to: (1) Send customers who already have the app to the order page on

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the app (2) Invite customers who have not yet downloaded the app to do so; or (3) Direct

customers who do not have phones on which the app is available to the mobile website. This test

would allow Domino’s to measure success by utilizing Bitly’s metrics to understand click-

through rates to the various destinations and the increase of all mobile orders during that testing

period. This test will run August through October, with the email providing mobile-only coupon

codes.

Test #2: Self-Mailer with QR Code

While the value of QR codes is often questioned in today’s marketing, companies who

use them correctly are the ones that see the true success with this medium. Out of marketers who

promote mobile applications through QR codes and print advertising, 41% and 31%,

respectively, report their efforts to be effective (Direct Marketing Association, 2014). When

placed on a self-mailer, for example, a QR code bridges the gap between an offline and online

channel and, in this case, between a print Domino’s ad and their mobile application. The success

of QR codes is highly dependent on the user experience that marketers create and, by sharing this

code on a piece of mail that the user would be reviewing in their home, Domino’s is decreasing

the potential inconvenience of the action (Meunier, 2013). The self-mailer, delivered once to a

third of a population each month between December and February, will include a mobile-only

coupon code. The QR Code will be embedded with a unique Bitly, allowing Dominos to

distinguish the test from others, driving users to the application or location to download the app

and redeem their coupon.

While Domino’s can simply direct users to “Scan The Barcode”, they need to ensure that

users follow through to be properly directed, whether or not they currently have a scanner

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downloaded on their device. To do this, a directive near the QR code should provide readers with

the next steps to complete the call to action:

Use Your QR Code Scanner to activate your coupon! Don’t have one? Follow these steps:

(1) Open Your App Store (2) Search “QR Code Reader”

(3) Download a scanner app (4) Scan away!

Test #3: Location-Based Pop-Up On Mobile Website

From May to June, Domino’s can incorporate a pop-up when customers go directly to the

mobile website from their browsers. The pop-up, which will allow Domino’s to again use a

unique Bitly deep link, will remind users that the app is available, while also sharing a coupon

code to be used on the application. The audience for this test goes beyond current opted-in

customers and essentially anyone in these markets who lands on the mobile website. While

header ads on the iPhone, for example, drive users to download or view an available app when

accessing a website, if applicable, a full pop-up that delivers an offer will allow Domino’s to

politely disrupt the mobile experience to remind users of the app while providing a special offer

to incent them to move their order from the browser to the app. This test gives Domino’s the

ability to track through the click-through rates and coupon code redemption.

Domino’s Data Collection Practices & Recommendations

As Domino’s interacts with their millions of customers on a daily basis, they are

collecting some kind of customer information to be able to properly complete the order process,

which can be initiated online, with the mobile application, over the phone, or through walk-in.

Online

Domino’s has the ability to collect a slightly different data set from customers ordering

online depending on whether or not they have created a Pizza Profile. Customers with Pizza

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Profiles have provided Domino’s with their name, address, phone number, email, and payment

information. Orders made through Pizza Profiles allow customers to view their order history as

tracked by Domino’s as well as locations at which they have ordered. For customers without a

Pizza Profile, Domino’s collects name, address, phone number, email for use for that specific

order. In both cases, customers have the choice to opt-in to e-mail offers from the chain.

Mobile

Similar to customers who visit the website to order, those that utilize the Domino’s

mobile application provide information depending on whether or not they have created a Pizza

Profile. In addition to the data that was listed in the above section, Domino’s also receives

insight around what customers leverage their voice-ordering system “Dom”. With this data,

Domino’s can come to understand how successful Dom is as a part of their mobile application.

Also, due to the required collection of emails for all orders, Domino’s has the opportunity for

disseminating surveys and other email based communications about the service. Lastly,

Domino’s can gain insight on the time, types of orders, and geographic areas for which Dom is

being used given the basic information that is collected with each order.

Phone

If a customer calls in to a Domino’s location, they can be placing an order for either

delivery or carryout. For delivery orders, associates are required to request the name, phone

number, and address of that customer. For carryout orders, associates are required to request just

the customer’s name and phone number. A local store manager confirmed that locations are

required to collect name and number with each order as a way to keep tabs on a customer’s order

history to help create a positive customer experience in the future. This way, Domino’s can

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remind customers of what they have ordered in the past as well as have a way to contact the

customer throughout the order process (personal communication, May 14, 2015).

Walk-In/Carryout

When a customer walks into a Domino’s location for a carryout order, associates, as

explained above, must collect the customer’s name and phone number to be able to attach their

current order to their order history (Domino’s Store Manager, personal communication, May 14,

2015).

Additional Recommendations

One recommendation for phone and walk-in/carryout orders is to ask customers if they

would like to share their email address with Domino’s, allowing them to opt-in as if they were

ordering online. By asking for email addresses in the locations, Domino’s automatically has a

50% chance of interacting with these customers beyond their current order.

Also, for customers with Pizza Profiles who have opted-in to receive emails, which is

done through online and mobile, Domino’s can explore collecting birthdays as a part of the

customer profile. “Sending a birthday offer is an excellent way to not only let your recipients

know you’re thinking of them on their special day, but it also drives revenue, because who

doesn’t want to treat themselves on their birthday?” (Stiglitz, 2014). For Domino’s, this is a great

way to engage their customers who have already shown that they are interested in receiving deals

with an additional personal touch.

Ways To Increase Sales

Five ways in which Domino’s can increase sales using customer data include: (1)

Identifying their top customers through purchase history and driving repeat sales through a “VIP

Customer” strategy; (2) Identifying cross-selling opportunities by understanding what specific

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products customers seem to prefer to order together; (3) Understanding their most effective

offers; (4) Identifying what message strategies (i.e. subject lines, social media posts, email copy,

etc.) drive the most sales; and (5) Get customer feedback through surveys and other interactive

feedback loops to continuously improve products and services.

Revisiting Groupon

In the attempt to ensure that customers taking advantage of Groupon Daily Deals offered

by Domino’s do not become one-time visitors, the pizza chain should test offering Groupon

users a multi-coupon deal. The deal would require that the coupons purchased must be used one

at a time, during different visits. To ensure that local stores do not go over their delivery

capacity, these will be redeemable Mondays through Wednesdays with blackout dates being key

pizza delivery days, which include Super Bowl Sunday, Halloween, the day before

Thanksgiving, New Year’s Eve, and New Year’s Day (Locke, 2011).

Conclusion

With a corporate push to gain an unprecedented level of customer understanding, focus

on customers being the true “owners” of the brand, and keeping up with the digital revolution,

Domino’s has shown that they can stand the test of time. Domino’s has already succeeded to

reach customers where they are as they have achieved about 50% of their sales being digital, for

a total of about $2 billion annually (Maloney, 2015). Since the new recipe launch in 2010,

Domino’s has been fortunate to experience great brand momentum that requires proper

marketing and execution to be sustained (Sauber, Marold, & Anderson, 2011). By testing the

proposed tactics across some of their top and constantly growing customer segments, Domino’s

is providing themselves with the opportunity to understand how they can most effectively

continue to come out on top domestically as they revel in growth internationally.

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Appendix A: Budget Allocation

1. Improving Carryout Penetration For Ages 18-24

2. Improving Penetration For Households with Children

3. Increasing Mobile Sales Among Young Professionals

4. Re-Testing Groupon

With no upfront costs for businesses, there is no cost to allocate towards the overall budget

for Domino’s to execute another Groupon test (Groupon, 2015).

5. Total Campaign

The total cost for the campaign as proposed above is $295,481.08.

References

18-24CarryoutTestCampaigns UnitCost Population/Reach CampaignCount TotalCost

TextToLandingPage 0.015$ 29,110 3 1,309.95$

EmailCampaign 0.025$ 43,665 3 3,274.88$CollegeNewspaperInserts(7Colleges,CPM) 91.00$ 50 21 95,550.00$

TOTAL 100,134.83$

1.TotalTestMarketPopulation=58,220(Assmuption:50%oftotalopt-intext,75%opt-inemail)Basedonestimatedstudentpopulations:Ithaca=8,800;Ames=18,500;Corvallis=12,700;Charlottesville=6,000;CollegeStation=12,220

2.SMSCampaignCostSource:http://www.mailup.com/disruptive-pricing/sms.htm

3.EmailCampaignDesign&ExecutionCostSource:http://www.cypra.com/en/email_services/professional-pricing.php(TotalPerMonth=$1095)

4.CollegeAdvertisingCostSource:http://www.nationwideadvertising.com/new30daydail.html(AvgCostof$85)5.FSIEstimateCPM=$6

HouseholdsWithChildrenTestCampaigns UnitCost Population/Reach CampaignCount TotalCost

Self-Mailer 0.400$ 161,000 1 64,400.00$#MyDominosFamilyEmail(80%) 0.025$ 128,800 3 9,660.00$#MyDominosFamilyPostcard(20%) 0.400$ 32,200 1 12,880.00$DRTVRemnantAd 35.00$ 161 3 16,905.00$

TOTAL 103,845.00$

1.EstimatedTestMarketHouseholdPopulation(BostonCensusData)=161,0002.EmailCampaignDesign&ExecutionCostSource:http://www.cypra.com/en/email_services/professional-pricing.php(TotalPerMonth=$1095)

3.DRTVCostSource=https://drtvinfomercial.wordpress.com/tag/drtv-media-costs/

MobileTestCampaigns UnitCost Population/Reach CampaignCount TotalCostEmailCampaign 0.025$ 195,250 1 4,881.25$

Self-Mailer 0.400$ 213,000 1 85,200.00$

LocationBasedPop-Up(CPM) 4.00$ 355 1 1,420.00$TOTAL 91,501.25$

1.TotalTestMarketPopulation=355,000(Assmuption:55%opted-in;60%addressesavailable)

Basedonestimatedyoungprofessionalpopulation(Census):DesMoines=70,000;Raleigh=115,000;Madison=95,000;SaltLakeCity=75,0002.EmailCampaignDesign&ExecutionCostSource:http://www.cypra.com/en/email_services/professional-pricing.php(TotalPerMonth=$1095)

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