We like Domino’s – from the story of its beginnings to the brand itself. We’re sure you’ve heard about their new pizza. Or at least, you’ve heard about the interesting campaign they’re running to market it.
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Hear George & Mary-Lynn talk pizza on The Bigg Success Show! Click the player to listen while you read [7:24m]: Play Now | Play in Popup | Download
Hear George & Mary-Lynn talk pizza on The Bigg Success Show! Click the player to listen while you read [7:24m]: Play Now | Play in Popup | Download___
They’re basically saying that their old pizza sucked, but this new one is good. The problem is that they’ve run ads in recent years talking about how good their pizza was. So what are we supposed to believe?
Domino’s built their business on fast delivery. They delivered, literally, an affordable product more quickly than any of their competitors.
It was a simple promise – you get your pizza in 30 minutes or it’s free.
Their business grew as fast as the pizzas were delivered. At one time, they were the fastest growing franchise chain – in number of units added – in the U.S.
But Domino’s had safety issues with drivers trying to beat the guarantee. So they backed off on fast. They had to find a new groove.
The competition
Papa John’s came along. They didn’t talk about fast. They built their business on good pizza that was still affordable.
In the meantime, Little Caesar’s came out with Hot-n-Ready pizzas. You stop in (they don’t deliver), pay $5 and walk out seconds later with your pizza. It’s about the fastest fast food around!
It’s definitely not the best pizza in the world. They don’t claim to be. They live up to their promise.
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The problem with “good, fast or cheap”
Good, fast or cheap … you only get to pick two. It’s a simplifying statement that we’ve heard over and over again.
In your customer’s mind: Value = (Service x Quality)/ Price
Let’s compare Good, Fast and Cheap to this equation.
Cheap = Price
Cheap, of course, relates to Price in that equation. In general, the cheaper your product or service, the higher the perceived value to customers. (This is not always true but that’s beyond the scope of today’s post.) Small businesses usually do best when they don’t try to compete on price.
Good = Quality
Good is the same as the Quality in this equation. (Good may not be good enough but we won’t go that deep here today.) This is a great way for small businesses to compete.
If we want a high quality pizza in our area, we go to one of two local places – Papa Del’s if we want a deep dish pizza or Monical’s if we want a thin one.
That’s a perfect example of how you can often niche your way around your competitors, even in a crowded market like pizza places and even competing on the same component.
Fast is mislabeled
Fast has been substituted for Service. That’s the problem with thinking good, fast or cheap. Speed is one way to serve your customers better but it certainly isn’t the only one.
It’s obvious that Domino’s wants to move past the fast image upon which they built their business. But they may have found more success sticking to a Service focus instead of jumping to a different component.
And that’s the lesson for us as small business owners:
Do what you love to do, but choose how you’ll compete. Stick with your strength – be it Price, Quality or Service – and you’ll be a bigg success.
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(Image in today's post by Egilshay)
Mary-Lynn & George,
Thank you for bringing the idea of triple constraints to the business owner. As a long time project manager the idea of Cost, Quality and Time is always on the minds of project team. It is true that this idea can be over simplified but it works. What I liked best about this podcast is that you keyed in on customer service (Quality). In the project management world it is rare you to hear a project team discuss customer service. Typically quality equates to how good the product/service will work, look, feel, etc. that is being created by the project team.
I think project teams need to invert this simple concept a bit. Meaning that they need to think about the quality that they are providing to their customer and focus on the idea of customer service they provide to the sponsor/s of the project they are working on. I am going to go forth and talk about this more about this idea of customer service in my PM seminars and classes I teach. So thank you for teaching the idea of triple constraints and thank you for putting a new twist on it.
I would also like to say thank you for helping a regular guy like me out and using the idea of pizza as an example. Na my co-host, on that entertainment show I do on the side, says there is no good Chicago style pizza here in CO (he is a traditional thin crust guy). But he did find a place where we live. This family owned pizza joint is great and pricey. But, that is okay as they serve a really great pizza similar to what Na would find in Chicago. Plus the family that runs the joint is from Chicago…. so I think that helps! Thanks again for using your passion for entertainment and food to express such a great concept.
Cheers,
‘Q’
Q -
We love how you extended this concept into the PM world. Too often we only think of our external customers and forget our internal ones. Yet the internal ones are just as important to the success of the organization – whether it be the project sponsor or the next person in the process.
BTW: Congratulations on one year at Entertainment for the Rest of Us. We recommend you to all of our readers: http://eftrou.com/ent/