June 25, 2019

Thin Crust Chaos vs. Deep Dish Data

A grand spectacle of sideline sniping, ruptured relationships, racial slurs and dramatic C-level destabilization has dominated the social media “buzz” about Papa John’s over the last 18 months. While the “buzz” may be saucy, it’s not the whole meal.

In November of 2017, Papa John’s founder John Schnatter publicly blamed the NFL for weakened sales, accusing them of poor leadership with respect to the national anthem protests. The ensuing months saw their eight-year partnership foreclose, a reference to racist language in a conference call, and his eventual departure as Chairman. As Schnatter walked out the door, he left his company’s reputation—and its revenue—in shambles.

Schnatter’s finger-pointing may have made sense on the surface, but a deeper, more critical analysis of consumer conversations on social media suggests there were additional forces negatively affecting revenue. It appears Schnatter wasn’t painting a complete picture when he blamed the NFL and, in turn, he was unfairly held culpable by the media and his own Board. The incident ultimately masked a problem the company didn’t want to face (or didn’t know they needed to), which was hidden within the social media chatter: The bad taste was in the pizza long before it was in Schnatter’s choice of words.

Quantifind was able to get to the root of the problem by employing proprietary data science modeling in analyzing consumer conversations about Papa John's over the past several years. This method connects the dots between social conversations and Papa John’s sales data and uncovers what we define as “buyers” or probable customers. By doing this, we uncovered issues that were causing their customers to leave before Colin Kaepernick ever took a knee—issues that have been allowing the competition to gain ground on them in many of the areas that drive sales.

Regaining a Larger Share of the Pie

In recent months Papa John’s has taken decisive action to repair the damage and revive the brand. It has secured a cash infusion from a new investor, new leadership at the top, and a fresh endorsement / franchise deal with NBA Hall-of-Famer Shaquille O’Neal. Meanwhile, they continue to lose ground against the competition in key measures:

Going back to the Beginning: Papa John’s Loses its #1 Seat at the Value Table

The graph below displays the top drivers of purchase in the pizza category, with Delivery, Sides, and Value being the primary ones.

In 2016, among the leading pizza companies, Papa John’s was clearly the biggest player in the Value category. They were a strong contender in Delivery among the brands that offer it, and dead last for Sides. This is how buyer conversations looked before things began their downhill slide:

Beginning in early 2017, Papa John’s saw a decline in all three of the primary drivers. Buyer conversations often act as a bellwether of bad things to come, and by Q3 of 2017 Papa John’s reported just 1% North American comparable-store sales increase, falling short of analysts’ expectations of 2-4%.

The Perfect Storm

Schnatter blamed the NFL protests for the decline in revenue, but the data shows value perception already declining (along with sales) before he made those claims. Not only was Papa John’s losing their differentiation as the best value in the category, they were also dipping in the other key areas.

When Schnatter said poor NFL leadership negatively impacted his pizza sales, the social media switchboard lit up, creating the perfect storm: an already shrinking market share colliding with a public relations nightmare. Quantifind dug deeper by correlating relevant buyer conversations to the decline in Papa John’s revenue and found convincing evidence that people who used to eat at Papa John’s were no longer choosing to because, quite simply, their pizza was worse than the competition.  

Nearly half of those who mentioned Papa John’s and the NFL also talked negatively about their pizza, further painting the picture that Papa John’s didn’t have a partnership problem; they had a pizza problem. 

Moving Forward 

Quantifind’s proprietary data analysis indicates that Papa John’s needs more than grand, visible gestures to regain market share. They need to get back to the basics of “better ingredients, better pizza,” by  improving value perception, delivery and their selections of sides in order to measurably move their sales needle in a positive direction.

Listening to what people are saying in social media is an important aspect of brand management, but the only way to truly understand what is moving your customers—either towards you or away from you—is to look below that social media surface and link consumer conversations to business results. Quantifind is connecting what people say to what people do in a way that uncovers the hidden signals, reveals the true reality, and provides a more comprehensive and dimensional understanding of relevant market dynamics.

Want to know more? Email us at insights@quantifind.com

Banner image: SavePapaJohns.com