Crisis management by dominos 2009

This is about how Domino's manage crisis effectively

1. Mid Term: Crisis Communication & Strategies Domino’s YouTube scandal (2009 ) Crisis

2. Presented To: Osama Shakir Presented By: Rashid Aleem Ahsan Institute of Business & Management University of Engineering & Technology Lahore

3. Domino’s Overview Founded December 9, 1960; 58 years ago in  Michigan, United States Founders James Monaghan Tom Monaghan Business Food Delivery Franchising Restaurants Products Pizza Chicken wings Pasta Desert Number of Locations 13,811 (2017) 9,000 corporate and franchised store Revenue 2.47 Billion Total Assets 716.3 million Number of Employees 14,100

4. On Sunday the 12th of April 2009 , two Domino’s employees from a branch in North Carolina upload a film on YouTube. The footage is filmed while they are at work, showing disturbing images of themselves violating health codes with unsanitary actions , whilst repairing food e.g . putting cheese up his nose before putting it into sandwich etc. Crisis scenario The video becomes a viral sensation with more than a million hits on YouTube 3 days after it was Hoax has ripple effect in social media bleeding into conversations in twitter, other social media forums and mainstream media. 65 % of respondents who had visited Dominos Pizza say they would not visit Dominos Pizza after seeing video. (source Wall Street Journal, HCD research, 2009)

5. Stakeholders Firm Groups who are affected by a firm’s performance and who have claims on its performance Product Market Organizational Capital Market Stock market/Investors Debt suppliers/Banks Employees Managers Non-Managers The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders Primary Customers Franchises Suppliers

6. Effect of the Crisis The video becomes a viral sensation with more than a million hits on YouTube 3 days after it was uploaded (source NYTIMES.COM) • Hoax has ripple effect in social media bleeding into conversations in twitter, other social media forums and mainstream media

7. Effect of the Crisis Effect on stock Price - The 'Domino effect' of this incident was a 10% drop in stock value within a week of the incident.

8. Crisis Management Strategy Tell the truth Take Responsibility Make a public apology Use online platform Incident was a rogue act of two individuals T wo individuals who thought they were being funny They do not represent this brand Be honest, open and candid about the situation Be truthful and minimize the damage to organization’s reputation Collaborate and coordinate with credible sources ( the watch dog organizations and local authorities) We did not do this. We are sorry W e want to earn your trust back Track the blogs and social media Must visible on Social media ( My space, Twitter, YouTube and Facebook)

9. Crisis Communication Plan Media Release When to communicate Social Networking Clear & Truth based Don’t Justify the act Communication Impact Social Media Relation Check Positive/ Negative sentiments Affirming response Developing key Messages To whom Communication How to React Communication medium Post Crisis Clean-up Start campaign Media coverage Documentaries Promotions, A dvertising Crisis Communication Plan Show strong belief and dedication through communication Be flexible to others opinion Empathized rather than detached

10. Crisis Communication Plan Tim McIntyre, Vice President of Communications, was part of the internal team that delivered the company’s crisis communication plan through Twitter and YouTube . The company president apologized. He thanked the online community for bringing the issue to his attention. He separated the company from wrongdoers and announced their prosecution. He outlined steps that Domino’s was taking to deal with the issue to make sure it never happens again. Domino’s not only demonstrated concern for its customers, but also an understanding of the critical importance of reaching out to a target audience on its own terms and in its own preferred space. This strategy and decision also suggests that Domino’s has the ability to manage the crisis for tomorrow. This crisis happened online. It had to be dealt with online. By learning that lesson under fire Domino’s broke new ground and opened a new chapter in the ongoing evolution of crisis communications.

11. Analysis of Crisis Management Listen Interpret Prepare & React Monitor April13, 2009 Domino’s alerted to video, (Monday Morning) The vice president, corporate & communication team sooner became aware of this situation. The first reaction was anger, but they channeled into action . Proceeded to intercept the store, the authors of the video T ook away the videos, and the company pressed charges against them. Introduce the company to Facebook, Twitter and some other social media. The CEO responded through YouTube. Started campaign “Pizza Turnaround” with media coverage, documentaries , promotions , advertising, etc. Started implementing the proactive and strategic phases of establishing constant communication with customers through social media channels . Pay special attention to customer feedback . Track the blogs and social media.

12. Time Line of Domino’s Response .

13. Why Domino’s response was not fast The biggest mistake Domino’s made was that they waited to respond . There was no crisis plan in place for a situation such as this. Food tampering is a common enough occurrence, but it seems that many companies still have not grasped how much social media can affect a crisis situation. There was no social media presence before the crisis. Customers had been seen the video much more early, and were following the response. Domino’s didn’t feel need to monitor the Web before crisis, if there was a Google Alert for their name, they could aware very early. They made mistakes, that’s for sure. But they also managed to launch a communication strategy that saved their brand from potential ruins. Considering that, at the time, the results of this crisis were close to a miracle. Prove a very good crisis communications firm who knew exactly what they were doing.

14. Do Domino’s Deliver during Crisis? Delayed reaction – alert was heard late Silent when answers were needed Reacted after they were contacted by consumer affairs blog site Lack of strategy for digital crisis management Fault or lack of online surveillance Lack of social media presence Lack of employee policy on social media use and communication Lack of overview on main online influencers What was Wrong What was Right Response through traditional media and social media CEO video response on YouTube targeted core audience Changed discourse to ’how companies should deal with hoax crisis’ in mainstream media Created a twitter account to engage in dialogue with consumers and respond to negative comments I believe that Dominos did a professional job at handling this incident to the extent that even after nine years there is much to learn both from their mistakes and successes.

15. Preventive Action Act fast Not enough to proactively use internet as a communication platform Need to use your eyes and ears and listen to all the conversations not only the ones which you are engaged in A prank is a threat A false claim can become a real threat Even though the company knew the claim was false , the public perceived it as being real The video was believable Imagine your terrifying scenarios Train the employees Identify the crisis team-Top Management Imagine your nightmare scenarios Track the blogs and social media Don’t wait Respond at the flashpoint Taking commercial breaks sometimes is not required Foster a positive culture Set c lear Guidelines