DOMINO’S PIZZA REIGNS SUPREME
When I was in college almost 40 years ago, Domino’s Pizza was a lifesaver b/c poor college kids could get large pizzas delivered for only $6!!
What is truly amazing though is that Domino’s is still going strong with the same model, and pizzas only cost $2 more than they did 40 years ago!
Domino’s was discussed at length in fact in this recent Invest Like The Best Podcast.
Domino’s success is fascinating b/c it is thriving in one of the most competitive and low-margin industries (fast food).
They achieved their success with relentless and very aggressive innovations.
Here are a few interesting factoids.
Domino’s has 17,000 stores worldwide (6,000 in the U.S) and sells $15 billion worth of pizzas and wings every year (almost 4 million pizzas per day).
In the U.S., 95% of franchisees are former employees (proving, as always, that trench experience is everything).
They are a “tech company” as much as a pizza company, employing tech to improve the customer experience (ordering online from anywhere, getting deliveries anywhere, pizza tracking, etc.) and to cut costs (inventory management, delivery management, metrics monitoring, etc.).
SO WHY BLOG ABOUT DOMINO’S?
Domino’s was forced to continually cut costs, improve efficiencies and improve customer experiences to survive in an extraordinarily competitive space.
And this is something that nobody in real estate or the mortgage industry has had to do b/c we all have been riding a 40-year-long wave of continually decreasing rates and increasing housing prices.
Yes, there have been bumps, but the overall trend has been continually down for rates and continually up for housing prices.
As a result, we’ve all grown a bit fat and happy, and not nearly focused enough on efficiencies to survive in a world where rates and housing prices are no longer moving in the right direction.
And that day will come.
INMAN: WHEN AGENTS SHOULD OFFER REDUCED COMMISSIONS
I thought of this yesterday when I read this Inman column about when agents should offer reduced commissions.
The author offered the usual reasons: 1) easy jobs/seller’s market; 2) loyal clients; 3) dual agency; 4) off-season deals.
I of course am not advocating reducing commissions for anyone – especially in this market.
But, I am suggesting that the day will come when we ALL have to reduce commissions and operate on far lower margins in general.
In other words, we will have to be as innovative, tech-centric and as efficiency-obsessed as Domino’s if we want to survive.
At JVM, our plan is to employ far more tech (particularly artificial intelligence) and overseas virtual assistants to replace as much stateside labor as possible, to increase our speed, and to improve client experiences.
And so far, things are going amazingly well too as our tech solutions continue to improve at a very fast pace and our 34 virtual assistants are enabling us to improve service across the board.
Anyway – this blog is a reminder that we all need to think like Domino’s; if we don’t, we might all end up working for Domino’s. 😊
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