Domino's wants you to eat more pizza. It doesn't even care if you eat Domino's pizza.

In an effort to get you to download the Domino's mobile app and sign up for its Piece of the Pie Rewards loyalty program, Domino's says it will give you points every time you eat pizza, even if you order it from a competitor -- or even if you make your own at home.

So, just to recap:

  • Order pizza from Domino's? You can get Domino's points.
  • Order pizza from Papa John's? You can get Domino's points.
  • Order pizza from Pizza Hut? You can get Domino's points.
  • Order pizza from your local pizzeria that's way better than Domino's? You can get Domino's points.
  • Spend a romantic date night at home in the kitchen making a homemade pizza with your sweetie and pairing it with a nice bottle of red? You can get Domino's points.
  • Make your own pathetic excuse for a pizza by spreading marinara sauce from a jar on an English muffin and adding a little shredded cheese? You can get Domino's points.

You get the idea.

Easier than a Super Bowl ad

The company says it launched the new app and promotion instead of running a Super Bowl ad this year because it figured it could get more word-of-mouth this way.

You get 10 points for each pizza pic you upload. Hit 60 points, and you get a free, single medium two-topping pizza.

"We decided to invest in a breakthrough program that rewards everyone who loves pizza as much as we do," Art D'Elia, Domino's chief brand officer, said. "We know everyone is asking themselves, 'Did Domino's just say they will award points for eating any pizza? Even from a competitor?'"

Let's do the math

Of course, I have no skin in the game. I don't care if you order from Domino's or download and use their app. I doubt I've eaten Domino's pizza in 20 years.

But let's be clear that the downloads and enrollments are the goal here.

Regular readers will know that I love these kinds of stories, where we try to dig apart a big brand's marketing scheme and costs, and try to figure out what it's paying for every new customer as a result.

Previous case studies: McDonald's, Starbucks, and Burger King. (The Burger King one was genius.)

So, let's consider just how much it costs Domino's to get one person to join its program via this promotion, especially compared with the cost of a Super Bowl ad.

A single ad this year went for about $5 million, according to Bloomberg. Across the United States, about 98.2 million people watched. Let's be super-generous and assume that if you ran an ad, every single person watched it. That works out to about 5 cents per viewer.

Now let's keep up with the super-generous assumptions, and say that 1 in 500 people who saw the ad would take the time to download the Domino's app and enroll in the program. We're now at a $25 per app enrollee cost.

I doubt Domino's will  get anywhere near a 1 in 500 download rate, but we're being generous.

Paying you to eat the competition

Now, let's go the other way. Domino's doesn't really give up anything by inspiring you to download the app and join its program when you eat someone else's pizza. You were going to do that anyway; only now it has attached its brand to its competitors' products. 

And the wholesale cost of the medium pizzas that Domino's will give you for scanning six other pizzas?  

Well, the retail in my area comes to $13.99. Interestingly, I find that estimates of Domino's margins are all over the place, so let's go with a conservative 15 percent. Heck, even at no margin -- meaning if it costs Domino's $14 to make a $14 pizza -- it would still come out far ahead on a cost-per-download basis than where it would be with a Super Bowl ad.

In fact, since 60 percent of Domino's orders are now digital, I'd almost suggest it should have done both the promotion and a Super Bowl ad -- simply because I'm sure it would jumpstart the scale at which it could run this whole thing. 

I might not know if I like Domino's food, but I think its marketing is pretty smart.

Published on: Feb 6, 2019
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