🧠 How Dominos used psychology to save the company

Hi there - Jen here :)

In 2009, a series of 5 employee-made videos almost destroyed Domino's Pizza.

Known as “Disgusting Domino’s People”, they showed employees doing unspeakable things to customers’ pizza.

[You can click here if you really want to read graphic descriptions of the videos’ content, or look them up on YouTube… but it’s a pretty nasty.]

It was one of the biggest brand PR disasters ever, and it came close to destroying the Domino’s brand.

According to a Zeta Interactive survey, negative customer sentiment - so people who hated the brand -  increased 234% almost overnight. 

And in the town where the videos were filmed, sales fell 50% and 600 Dominos workers were laid off.

But these viral videos were the last straw for a brand that had suffered from poor perception for a while.

So how did they turn it all around?

With a bit of behavioral science and psychology - applied consciously or not - to its marketing and advertising.

Today you’ll learn:

• The psychological principle Dominos used to kickstart one of the biggest turnaround success stories in business history

• How Dominos CEO J. Patrick Doyle avoided two of the cognitive biases that leaders fall for (and that kill brand turnarounds)

• How you and your brand can create massive growth using psychology - just like Dominos.

The psychological principle Dominos used to kickstart one of the biggest turnaround success stories in business history

Dominos took full advantage - knowingly or not - of the Pratfall Effect. 

It says that our mistakes can actually make us seem more likeable, not less. 

But it only works if you’re already seen as competent or an above-average performer.

To address the poor quality of Domino’s products, the CEO starred in a marketing campaign called “Pizza Turnaround.”

These commercials shone a light on the brand’s critics and vowed to fix their product.  

“Pizza Turnaround” not only documented the journey to create better pizza it also showed Dominos executives and chefs reading (and responding to) extremely tough critics of their product. 

In many ways, for many years, Domino’s had been innovators in quick service restaurants and delivery. 

In fact, they basically invented pizza delivery because their first shop was too small to even seat customers. 

And that’s why the “Pizza Turnaround” campaign worked so well .

The commercials reminded folks how much they had loved Dominos in the past, then apologized for the brand’s current mistakes and shared a plan for how they were going to fix them. 

Without that long history of quality and innovation to fall back on, Domino’s use of the Pratfall Effect wouldn’t have been as successful as it was.

How Dominos CEO J. Patrick Doyle avoided two cognitive biases that leaders fall for (and that kill brand turnarounds)

As a behavioral science practitioner myself, I love the insight it can give us - not only into marketing - but into how leaders can manage change and make better decisions. 

Clearly CEO J. Patrick is a fan, too. 

When he was interviewed for a Harvard Business Review article in 2016, he identified two key behavioral science principles that he felt organizations had to be wary of to make a big change. 

The first thing Doyle wanted to avoid was something called Omission Bias. 

🧠 What is Omission Bias?

This describes our tendency to do nothing instead of doing something, because nobody sees the costs and damages of NOT making a move. 

They only see what happens when a BAD move is made, so people end up not doing anything at all. 

In a brand crisis like the one Dominos faced, inaction was a recipe for disaster. 

The second behavioral principle Doyle wanted to avoid was Loss Aversion.

🧠 What is Loss Aversion?

This describes peoples’ desire to avoid loss at almost any cost. 

In fact, the psychological pain of loss is more than twice the happiness of gaining the same thing. 

So for example, if someone steals 20 dollars from you, your sadness might be a 6 on an emotional intensity scale of 10. 

But if you found 20 bucks, your happiness would only rate about a 3. 

Doyle knew that people tend to be cautious, especially in situations with a lot of uncertainty about the future.

They want to any avoid risk and therefore any potential loss.

Even in crisis situations that demand out of the pizza box thinking (sorry, I couldn’t resist). 

He knew that to succeed, a leader needed to communicate that failure was an option.

And throughout the Pizza Turnaround process, that’s exactly what J. Patrick Doyle did. 

And that willingness to fail was ultimately, what caused Dominos to succeed.

🧠 How to Grow Your Brand Like Dominos

To use behavioral science and marketing psychology like Dominos did (no matter the size of your brand), start by asking yourself a few questions:

• If we make a mistake, will we own it? Here’s a quick video case study about how Apple, KFC, and Barack Obama made big mistakes… and how they used the Pratfall Effect to recover.

• Are we falling for any of the common cognitive biases that undermine innovation and change in organizations? We’ve talked about Loss Aversion and Omission Bias here, but there are lots of thinking traps organizations can fall into in times of change.

Read, Watch, Listen

• Wendy’s fast food restaurant to trial Uber-like surge pricing [Read]

• Talking Email Marketing and CRM with Chad S White, the Head of Oracle’s Digital Experience Agency [Listen]

• Check out the latest episode of the Choice Hacking podcast, all about how Duolingo uses psychology to make its app a habit [Listen]

Until next time,
Jen

Want to use behavioral science, psychology, and AI to grow your business?

👉 When you’re ready, Choice Hacking can help:

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