Mar 7, 2018

MOD Pizza looks to take LeBron James to the hoop

See how MOD Pizza is delivering with distinction as they compete against the incumbents (including LeBron James) in everything they do.

I am all in on LeBron James. Let me start with that.

He’s been to the NBA Finals eight times (including the last seven in a row), and he’s won three championships. He’s been named the NBA MVP four times. I don’t know if he’s the greatest basketball player of all time (though he’s certainly in the conversation); I do know that on a basketball court I would not get in his way.

Beyond the basketball court (since Numerator won’t allow me to write exclusively basketball-themed articles, much to my personal chagrin), Mr. James has been equally successful, with an estimated net worth of $400 million. And in 2015, when he discontinued his sponsorship with McDonald’s (and the guaranteed $15 million dollars it offered) to invest in Blaze Pizza – a build-your-own-pizza franchise – you had to figure he knew what he was doing. With a great product and a huge marketing push directly from Mr. James himself, Forbes described the restaurant as the fastest-growing chain ever. This makes me also pretty sure I don’t want to get in his way in the business world either.

But that’s exactly what MOD Pizza has done. Playing in almost exactly the same space as Blaze Pizza (and let’s not forget also challenging non-basketball-playing behemoths like Domino’s, Pizza Hut and Papa John’s), they’ve recently raised another $73 million, bringing the total equity capital raised to $180 million. As of early this year they’d opened 302 stores.

So how do you play LeBron James to at least a draw, something not many can say they’ve done? The answer is not “become a better version of LeBron James.” The answer is “do something different.” And that’s what MOD Pizza has done.

Here are three lessons, drawn from personal experience with the chain, their website, and recent press coverage

  • It starts with the employees: When you walk into the restaurant, you are cheerfully greeted by multiple workers eager to help. They aim to give employees a living wage and benefits. And the employee satisfaction is staggering, with over 90% of employees saying it’s a great place to work.
  • Feel, don’t think: MOD Pizza could tout the quality of its ingredients (I’m guessing given the selection and taste they’re pretty good, though I can’t say for certain), or the restaurant speed (it’s fast and fresh-tasting, take my word for it). But instead they go right to emotional engagement. Simple food for complex times; eclectic music (they offer their playlist from their website); a post-modern yet retro vibe. Being there just makes you feel good.
  • Be courageous: MOD hires multiple-time felons, people with learning disabilities, and those recently released from drug or alcohol rehabilitation. Walk in and you’re greeted by an army of heavily tattooed employees (not to stereotype, or sound really old, even though I just did both, and not that having tattoos makes you a felon and I’ll just stop typing now). But here’s my favorite quote, from co-founder and serial entrepreneur Scott Svenson, who says they didn't have the courage to take these kinds of risks previously, but “…[i]f we give them an opportunity and treat them well, we can make them feel trusted and empowered." Amen.

At Numerator, we spend a lot of our time rooting around in media (new and old) to help companies deliver with distinction. MOD delivers a great example of how to compete against the incumbents in everything they do. So, how do the legacy chain restaurants fight back? Beyond the obvious of following the playbook above (imitation is the sincerest form of flattery, after all, and these are all good ideas), some opportunities emerge from adjacent categories:

  • Think locally: As companies grow, it’s easy to lose authenticity, to corporatize civic involvement. For those that keep it local – Starbucks, Whole Foods, Aldi and Moe’s Southwest Grill spring to mind, from personal experiences – authenticity can be part of your DNA, even if you don’t give away a free product for every one you sell or hire convicted felons.
  • Be your best self: Though it sometimes feels uncool, there’s nothing wrong with being a mass brand. But then you’ve got to embrace what it means to market like a mass brand while still creating emotional connectivity. To paraphrase Byron Sharp of How Brands Grow fame, broad reach can be more productive than surgical targeting.
  • Generate excitement: I recognize this is more difficult when you’ve got 3,000 locations as opposed to 300, but if you aren’t generating fans lining up outside of each new location when it opens, or anxiously awaiting your new product offer, maybe you’re doing something wrong.

The small brands can take on the larger brands and win sometimes, but it requires doing things differently and taking chances (and even a little luck). And you have to know the legacy brands are going to counter you in some way. But you can win, and smaller brands are winning all the time – whether you’re MOD going up against Blaze and the other pizza chains, or…Stephen Curry battling LeBron James on the court.