Case Study: Domino’s Reputation Attack

In April 2009, two Domino’s employees published four short videos to YouTube that showed them mistreating food about to be delivered to customers.¹ Overnight, the videos spread virally through social media channels and the company was thrown into a public relations crisis as widely read blogs like The Consumerist relayed the story, which was quickly picked up by mainstream news media. In one day, the videos had about 1,000,000 hits on YouTube. Domino’s reputation came under the magnifying glass, with people attacking the quality of the company’s food and service. Domino’s had to act quickly to restore consumer confidence and to repair their lost brand equity. According to Domino’s Earnings Call for the Second Quarter of 2009, the company experienced a short-term hit to sales in the weeks following the incident, estimated to cost between 1 and 2 percent in domestic same-store sales for the quarter.

¹ David Kiley, Domino’s Pizza YouTube Video Lesson: Focus on Standards and Pack Your Own Lunch, Bloomberg BusinessWeek (April 15, 2009), http://www.businessweek.com/the_thread/brandnewday/archives/2009/04/dominos_pizza_youtube_video_lesson_focus_on_standards_and_pack_your_own_lunch.html; and Taly Weiss, Crisis Management: Domino’s Case Study Research, TrendsSpotting (April 22, 2009), http://www.trendsspotting.com/blog/?p=1061.

What Went Wrong?

Domino’s had little control over what employees could do on social media sites. The first thing Domino’s should have done was come out with a stronger response. Their initial communication said that the employees were tracked down, fired, and had warrants for their arrest sworn out. Even though they tried to have the video taken down, once material is out on the Internet, it is pretty much there to stay. The firm Ad Age reported a hit to the “buzz” ratings of Domino’s as measured by BrandIndex. Buzz fell from 22.5 points to 13.6. Domino’s quality ratings fell from 5 to minus 2.8 temporarily.

The second key problem was the timing of Domino’s response. More than a day went by before the company started to respond. In the social media world, that’s a day of over 1,000,000 bad impressions of your company on YouTube and probably more on Twitter. Where was their social media monitoring to report immediately on any mention of the brand? Monitoring should have been in place to immediately notify the company of what was happening.

The third problem was due to internal controls. Could training regarding the proper use of social media have influenced the employees to not post the videos? We can’t answer this question, but the underlying problem of poor behavior might have been avoided, in theory, with better internal training and communication. We do not know if the video was posted onsite or offsite. If it was posted from a mobile phone, the company couldn’t have done much to block outgoing videos to sites such as YouTube. If the posting was from a corporate computer (in this case, probably unlikely), they could have potentially blocked access to sites such as YouTube.

What Did They Do Right?

Eventually, Domino’s did do several things correctly in responding to this reputation attack. First, the company launched a Twitter account to start positive coverage—dpzinfo—and to get their messages re-tweeted. Second, it did make an aggressive attempt to get the video taken down from YouTube. The postings were quickly found by the company and the crisis management team got to work defending the company and addressing the problem. Third, Domino’s did not try to hide from the problem. It tackled the issue head on and worked through social media channels to engage with customers and make customers aware of what it was doing to address the problem. The president of the company came out with his own video addressing the issue. And fourth, Domino’s put together mitigation tactics to rebuild its reputation. The company launched a new feedback campaign discussing the quality of its product and ingredients and addressing customer concerns about food safety, demonstrating that they were listening to customers.