papa johns nps

What Papa John’s and Domino’s Can Show Us About The Dangers of Negative Customer Sentiment

Unless you’ve been sitting under a rock for the past week, you’ve likely seen a headline or two about Papa John’s latest debacle.

After their quarterly earnings report came out recently, investors reacted negatively causing the stock to drop significantly in a single day.

But that wasn’t the big news.

The notable frontman, Founder and CEO, John Schnatter, stated on a call that the company’s downturn was due in large part to the NFL and the ongoing national anthem protests.

Many people disagreed with his theory, instead blaming the quality of their product (or rather, lack thereof) as the reason for their decline.

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As one of the biggest sponsors of the NFL, the company clearly has the data to determine the impact their marketing efforts have had on their sales, so we’re not here to dispute their claim.

It’s seems odd however, that if they had been listening to the voice of their customers, they could’ve been prepared for the backlash they are now experiencing.

Based on a quick search, there is some evidence to suggest that Papa John’s has been measuring their NPS score. Even if that’s true, it seems likely that they haven’t been actually listening to the feedback from their customers.

When executed correctly, NPS should serve as a preemptive measure in addressing AND predicting negative word-of-mouth before it occurs.

The value of this benefit cannot be overlooked, especially in negative PR situations, such as the one that Papa John’s currently finds themselves in.

Of course, NPS alone could not have completely prevented the negative messages from occurring (every brand has some level of detractors), but it absolutely would have made the company aware of the potential dangers (i.e negative customer sentiment) ahead of a disaster.

How Domino’s Recovered From Negative Customer Perception

Papa John’s certainly isn’t the first to suffer from negative customer criticism online. In fact, in 2009, their close competitor, Domino’s was surprised by a prank video that had gone viral.

The video, posted on YouTube and amassing over 1 million views within the first day, featured two employees performing unsanitary acts, such as sticking cheese up their nose and spitting on food.

The prank led to an onslaught of negative social publicity from customers, including those critiquing their product as “edible cardboard”.

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Unfortunately for Domino’s, the attention came as a surprise and at a time when they were actively revamping their recipe based on earlier critical customer feedback they had gathered.

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However, since they were already aware of their customer’s sentiment, Domino’s had the ability to respond accordingly.

They started by quickly addressing the video in a carefully crafted response, targeted at the specific issues they were hearing.

Knowing who their loyal customers were allowed the company to reach out and leverage them for support. This included asking them to help share/spread their response.

Ultimately, Domino’s took their customer feedback to an extreme level.

In late 2009, the company launched a massive nation-wide advertising campaign acknowledging the negative customer sentiment and admitting that their product was terrible.

The (brilliant) campaign was designed to not only recognize the voice of their customer but also to introduce a completely revamped recipe, which had required 18 months and millions of dollars to perfect.

As a result of both listening and responding to their customers, Domino’s was able to take a potentially company-crippling viral disaster and turn it into a massive win.

In 2008, the company’s stock was worth just $4 per share. In 2017, Domino’s became one of the fastest growing stocks on the market, trading at over $215 at their high point.

More importantly though, they’ve been able to get even the staunchest of pizza critics, and former Domino’s detractors (AKA New Yorkers) to become promoters once again.

Only time will tell if Papa John’s will have the ability to recover from this most recent crisis, but if they can learn anything from their competition, it’s to strategically embrace the voice of their customer.

Negative Word-of-Mouth Can Impact Any Company

These two examples help illustrate the importance of understanding, responding to, and leveraging customer sentiment at ANY and EVERY point in time.

While these two scenarios feature massive consumer brands with hundreds of thousands (or perhaps millions) of customers, negative word-of-mouth can impact a company in any industry and at any stage of growth.

A TARP study revealed that while positive experiences are only shared with a few people on average, negative experiences get shared with an average of 12 people by comparison.

What’s more, they found that each of those 12 people tends to mention the occurrence with 6 others.

Ultimately, that leads to negative word-of-mouth experiences spreading 30 – 35 times greater than positive ones.

Negative word-of-mouth experiences are spread 30 - 35 times greater than positive ones. Click To Tweet

To makes matters even worse, it’s been proven that negative experiences spread twice as fast as positive ones, as well as have an average of 2.4% greater impact on your financials.

That’s all to say that regardless of your industry, customer type, stage of growth, etc, you need to understand the true sentiment of your customers, the drivers of that sentiment and what your customer personas are before any potential crisis destroys your business.

With word-of-mouth marketing (both positive and negative) impacting the majority of all purchases made today, you need to have a constant pulse on the customers that are driving it. Net Promoter is the most proven and effective way to do that if used correctly.

So, what are you waiting for? Sign up for a free trial of Promoter today!

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Dana Severson

Dana Severson is the Director of Marketing at Promoter.io and cofounder of Startups Anonymous. Former founder & CEO of Chasm.io/Wahooly and AngelPad Alum. In addition to focusing on growth at Promoter, Dana is a weekly columnist for Inc.com

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