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RPM PIZZA RACES FOR DOMINATION!
By Lucas Leigh - PMQ Staff
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They say innovation distinguishes between leaders and followers. One pizza corporation, based in Gulfport, Mississippi, has established itself as the leader of the largest franchise organization in the entire Domino’s Pizza system, innovating some of the most popular gadgets in the Domino’s Toolbox, including the Heat Wave hot bag, three-sided car toppers, and locations with drive-thru. Brothers Richard and Glenn Mueller revved up their pizza engines in 1981 when they purchased three locations in Mississippi—Hattiesburg, Biloxi, and Gulfport—and signed with Domino’s founder Tom Monaghan to become the authorized franchise group in charge of developing Mississippi and Louisiana. With more than 130 stores in operation today, several of which were lost and rebuilt after Hurricane Katrina in 2005, RPM Pizza has weathered through every situation imaginable in the pizza business.
Braving the Stormy Waters
RPM’s co-founder and CEO Glenn Mueller explains, by referencing his most recent disaster, how building a healthy organization lies in quality people. “The day after Hurricane Katrina hit, the mayor of Waveland, Mississippi, said, ‘Yesterday, we had 10,000 homes. Today, we have eight.’” Glenn continues,“How do you help a community like that? We had 86 stores close because of the storm.” They were able to pass out more than 30,000 pizzas to emergency workers and survivors thanks to help from other Domino’s people throughout the country. RPM Pizza had endured 13 major storms prior to Katrina, and as Glenn put it, “We’ve been through a lot of stuff.” Glenn pointed out one thing he’s learned over the years: “You have to have a good support system, and for us, Domino’s Pizza has been incredible.”
How It All Began
As a college student at the University of Michigan in Ann Arbor, Richard P. Mueller (RPM) watched a pizza chain that was founded in his town grow from a small chain to one with more than 150 units. In 1969 he jumped on board and became a driver at the original Domino’s location in Ann Arbor. Soon enough he was promoted to manager and then bought his own store, became vice president of operations for Domino’s, and received 10% ownership in Domino’s Pizza Corp. After seeing the company rise to 500 stores in only a few years, Richard saw an opportunity in developing the southern states of Mississippi, Alabama, and Louisiana.
Glenn explained one lesson they learned at the beginning due to rapid development. “We wanted to open a lot of stores, so we had all our managers sign agreements stating they would go out and franchise eventually. It was sort of suicide because every time we got a manager trained, they would leave us to go open their own store. It was a good thing because we were growing so fast, but some of our best people had to leave.” Glenn said in the late 80s they developed a different idea to keep them from leaving. “Since the 1990s, all general managers earn 30% of the profits from their store.” This has also helped RPM rack up some awards from the Domino’s corporation. Just last year (2006) RPM Pizza had National Supervisor of the year, Rookie Manager of the year, and Manager of the year, as well as one fastest pizza maker who won fourth place out of 100,000 pizza makers in the Domino’s system. Glenn accredits some of the success to the pizza college they’ve created to help train their managers, supervisors, and pizza makers in the southern states, which he said also helps with employee retention and commitment. “Our average manager is making more than $55,000, and two are making more than $100,000,” Glenn said.
How to SELL Pizza
Glenn said all of RPM Pizza’s restaurants do printed pieces such as direct mail, box toppers, doorhangers, menus, and also radio and television. “Domino’s Pizza has a history of doing a lot of door hanging. We use employees from the stores to do the door hanging. Some people contract it out, but then you can’t really supervise it and be sure it gets done,” he explained. “Usually for the doorhangers, we’ll advertise specials, new products, and of course coupons are very popular in the pizza business, so we try to meet the variety of customers’ needs. [PMQ Publisher] Steve Green used to work for us and one thing he taught us many years ago was that having multiple layers of advertising was very important because there is no one thing that fits every customer,” Glenn said.
One promotion RPM Pizza used was for their support, along with the U.S. Marines, of Toys for Tots. “For the past four years we have partnered with the Marine Corps along the Coast by putting on our boxes a flyer offering our customers a free side if they donate a new, unwrapped toy. This year we were able to collect over 200 toys between our Gulf Coast stores and our home office,” he said. “We have three pools of advertising with Domino’s: National, which we have no control over, regional, which we have some control over, based on the other operators in the area, and local, which we control 100%.” Glenn said their average store’s budget is around 10% for advertising.
With crime on the rise and ever-changing in the coastal areas of Mississippi and Louisiana cities, Glenn said one step they’ve taken is in standing out against crime. “One of the things we’re doing is getting involved with safety organizations and sponsoring neighborhood watch groups. Most people stand behind the charities, but crime seems to never go away. We want to keep our drivers and communities safe, so we’re giving them free food and trying to bring the community together.” One organization Glenn said they’ve really gotten behind is called National Night Out Against Crime. “Every year in August this event takes place. We’ve been a part of it for six years now,” he said. “It’s a national program, but every town does it different.” In Gulfport, Glenn said, the police will normally fill the whole parking lot of the mall full of booths and tents offering the community everything from fire and safety training to police services and child identification to protect against child abuse or abduction.
Innovation and Marketing
“These days with the Internet and YouTube and everything, it’s like a new frontier for advertising.” Domino’s nationals have produced some commercials that have been released on YouTube.com before they even hit television. RPM Pizza has also come up with several innovative products Domino’s uses today including drive-thru windows and three-sided car toppers. “We introduced the three-sided car topper in ’83 or ‘84. It’s become pretty standard in the industry now. The first car top signs were metal framed, two-sided. From behind the vehicle, all you see is a metal frame. My brother noticed the taxis in Denver had these huge three-sided signs, triangular shaped. So we converted all our signs so you can see them from every angle.” For RPM Pizza, Glenn confirmed the fact that their drive-thru units, which are available at about half their stores, have been a great convenience for customers. “They can pick their pizza up in 15 minutes and not have to worry about getting out of their car,” he said. Domino’s also has a new innovation that will hit the stores this fall: their proprietary point of sale system, Pulse. “We’re investing about $4 million into our POS system within the next four months. It’s going to offer a whole new round of services for our customers and our team members.” Although he couldn’t comment on the nature of the services available, some other point of sale companies are introducing such services as automated call-back with survey functions and more POS marketing capabilities such as targeting ‘lazy’ or ‘lost’ customers after 30 to 90 days.
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One way that RPM Pizza gives back to the community is by partnering with the U.S. Marine Corps to collect donations for the Toys for Tots charity program. According to Glenn Mueller, over 200 toys were collected by their Gulf Coast stores in 2006. |
Countdown to Domination
Glenn said one thing he loves about the pizza business is the competition. “It’s always going to be there, but it keeps us on our toes. You have to have great products and great pizza. We’ve been through good times, and bad times, but the resiliency of our brand is great,” he attested. Glenn said to survive in the pizza business, you need a lot of ‘sauce’ in your blood. “We don’t work on very big margins. People think we’re making a lot of money off the pizzas, but there’s so many variable costs from cheese prices and minimum wage hikes…but, if you have a passion for the business, great people, and a great product, then you can be successful.”
In order to get back to full strength after the 2005 storms, RPM Pizza has to get 16 stores reopened in New Orleans and several Mississippi towns, including Gulfport, where pizza is still being served from a trailer.