Domino’s Pizza built its reputation by getting their product to your door in 30 minutes or less. And to accomplish that, they built systems to promote and reward that effort. In this Commercial Real Estate Mastery podcast we’re going to explore building methods to hit your goals.
Episode 15: Lessons Learned From Domino's Pizza Transcript
Back when I was in college, everyone in the dorm relied, as our fail-safe if we were hungry, to order in a Domino's Pizza. And back then, the slogan at Domino's was 30 minutes or it's free. So you'd place the order, you'd turn on a timer, and you prayed the guy would get there a little late. That he'd get there at 35 minutes or 40 minutes or 45 minutes, because then instead of paying for the pizza, it would be free. However, it never happened. That pizza always hit the dorm before 30 minutes because Domino's had a very tight control over that one option. And still to this day, you can learn a lot from Domino's regarding how to get things done in commercial real estate.
This is Frank Rolfe with the Commercial Real Estate Mastery Podcast. We're going to talk about using some of Domino's techniques to get that pizza delivered fast and how you can apply that to your property. So, I was in Domino's recently. I've been eating Domino's ever since college, so for decades now, I've been buying Domino's Pizza. And Domino's Pizza has been a tremendous resource for most Americans because it's very dependable, the quality's always the same, and you seemingly always get the pizza quickly. And I was at this Domino's Pizza one day and I saw something flash on a screen back behind where all the customers are, back where the guys are making the pizzas, back on the back wall. And I pulled out my phone and I took a picture of it so I could zoom in and say, what is that? And one of the employees saw me take a picture and they didn't like it. And they said, "Wait, why'd you take a picture?" And I said, "Well, because I'm in the real estate business and Domino's is well known for their efficiency and there's some control thing back there that's like making some kind of visual announcement." And he goes, "Well, okay, what that thing is you took a picture of, it shows every Domino's franchise in the city of St. Louis and it's tracking on every pizza that is ordered how long it takes from when the order comes in to when the pizza goes out the door." So I said, "Well, how does it track it?" And he showed me the system. When they log in the pizza in the computer and you make the pizza and you put it in there, it's all done on a coding system and it tracks through that oven.
When it comes out the other end, it starts the or it ends the clock of how long it took from order to completion. And I said, "Do y'all track anything else?" He said, "No, we just track that. That's the only thing Domino's headquarters tracks for us." So Domino's had apparently realized the most important thing in their business model was producing pizzas fast. And because of that, they focused everyone in every franchise on that one item. They made it all-important. And apparently, whatever team or whatever restaurant grouping had the shortest time every month, everyone got a bonus. So Domino's was rewarding those and actually creating competition for everyone competing for this bonus by having the fastest pizza turnaround time. So what's the lesson learned from that for commercial real estate? Well, many times on a property, you're trying to get some finite thing accomplished. Maybe you're trying to get things leased up. If it's a mobile home park, maybe you're trying to fill lots, self-storage facility trying to fill units. And you've got to pick out what that most important thing is to your business, whatever the case may be, and you've got to create some kind of metric for everyone to see how you're doing as far as driving towards that goal.
You've probably seen those things that look like a thermometer that some nonprofits do on fundraising. The very top of the little thermometer, it will say, for example, $100,000, and at the very bottom of it, it will say zero. And every time more money comes in to this nonprofit, the little line in the thermometer keeps going up and up and up like water that's getting hot. And you can visualize exactly where you are in relation to that goal. You see the same thing in car dealerships. They've got a board that has every salesman's name and how many cars they've sold this month because they all compete. They want to sell the most cars so they'll get a prize or a bonus. But of course, they don't talk about it, but whoever has the least number of cars sold is probably very likely going to get fired. But you can do the same with your property.
All you have to do is figure out what is the most important piece of data to your business and then find a way to track it and then record it every day, focus everybody on it, reward the winners for winning, but at the same time, people kind of know that there's also a punishment that comes from losing. And when you make it out there where everyone can see it, it becomes extremely motivating. Now, in a lot of the properties that we've got, one of the primary components is, of course, occupancy. So using the Domino's method, all you do is do what just the car dealers do. You put on there what the goal is and then how that person is performing per that goal. And you will be amazed at the results you will have because pretty soon, since everyone's focused just on that one item, things start turning, things start doing better. People say, "I want to win. I want to hit my goal."
But it's not just for the employees of your property because sometimes you can use this system most advantageously on yourself. Now, when I first got into real estate, I started off in the billboard industry. I had goals, I had visions, I had visions of grandeur, I had big goals. And so I bought an erasable board like anyone can buy at any office supply store. And I bought some of this little black thin tape that surveyors have, it's called surveying tape. And I put a series of lines down that white erasable board, had probably about 30 lines or so horizontally, and then I started to put some lines in vertically. And I had it where the first item that you filled in was where the billboard was, and the next one was a thing that you would put a X in if you got a ground lease signed. And the next one was the thing you would put that had labeled with a P, which was the permit had been obtained, and then the next one was that the sign had been built. And I thought, "You know what, if I can fill that board, if I can fill all of those 30 lines, then I will have a continuous number of billboards coming out the other side." I don't know exactly which will get signed up, I don't know exactly which ones will get the permit, but as long as I fill that thing up, I'll have so many things, so many irons in the fire, something will come out the other end. And that's how I propelled myself from scratch to the largest private owner of billboards in Dallas-Fort Worth was I just kept following this board. So I was basically doing the same thing car dealers do, only there were no other salesmen, there were no other people. It was a way that I structured myself so I could see how I was personally performing. And it worked really well. Everyone needs at all times to be reminded of where they stand in relation to their goals. Now, if you write it on a sheet of paper and put it in a drawer, it's not that effective.
If you put it in your computer, it's not that effective because you only see it when you click on it. But when you put it on a board on a wall, you can't not look at it. You see it every day. I had another board I developed over time at the old billboard office. I had all my billboards and all the ads and when the ads expired, and I had a little line segment and it showed 60 days before the expiration of that ad lease. And then I had a little line and I moved that line every day of the year one notch to the right, showing the progression of time. And every time that little line hit the start of one of those 60-day intervals, it meant I had to get out there and get that ad space rented. And I could look at that board at any moment and see how I was doing because whenever that little line got past the day the line the ad had expired, I had failed. So I could at a glance see how I was performing and therefore I could put a lot of pressure on myself. The bottom line is there's no greater tool if you want to succeed than having something that tracks your progress that's right there in your face for all the world to see because that will motivate you to do great things. This is Frank Rolfe with the Commercial Real Estate Mastery Podcast. Hope you enjoyed this. Talk to you again soon.