THE BLOG

What Papa John's CEO Should Be Saying (If He Cares About Sales)

11/20/2012 11:38 am ET | Updated Jan 20, 2013

To: John Schnatter, CEO Papa John's
From: Lisa Earle McLeod
Subject: How to stop killing your business

Dear John,

How can I say this tactfully?

You're blowing it!

You're eroding your brand, you're destroying employee morale and you've enraged half your customer base.

I am neither agreeing nor disagreeing with your political position. I'm speaking to you as a businessperson. You are squandering what it has taken you 28 years to build, and it's making me nuts.

I'm a sales leadership consultant. Companies like Apple, Kimberly-Clark and Pfizer hire me to help them create passionate, purpose-driven teams. I help CEOs and executives motivate their employees to sell more and their customers to buy more.

Right now you are doing the opposite of that.

You are decreasing customer and employee passion. Your stock is falling and you're being vilified on the Internet. This is not a formula for success.

You can continue to argue with reality, or you can create a new, more positive sales narrative. This situation is not unrecoverable. If you were my client, here's what I would tell you to do right now:

Stop talking. Go home. Spend Thanksgiving weekend with your family.

First thing Monday morning, come into the office, and record a video press release. Square your shoulders, look straight into the camera and say these words:

"I spent Thanksgiving thinking about how grateful I am. I'm grateful to be living in this country, and I'm grateful to the employees and customers who helped me build my business for the past 28 years.

I've decided that I'm not going to wait until 2014 to provide my employees with health insurance. I'm going to start right now. Papa John's is going to implement the government regulations one year early. As of January 1, 2013 every Papa John's employee will have access to health insurance.

Furthermore, I'm going to cover half of the cost myself, out of my own pocket. The increase to customers will only be two cents per pizza.

Here's what our customers will gain:

When a Papa John's delivery person shows up at your door, you'll be looking at a man or woman who has health insurance, a hard-working person who no longer has to worry about what will happen if they get sick or their kid needs to go to the doctor.

I've made some missteps on this. I don't believe in excess regulations or government interference. But I do believe in our employees, and I want them to know, you work for a company that cares.

I'm proud to be the founder of Papa John's. I want our employees to be proud to work here, and I want our customers to be proud to do business with us."

Then stop talking.

In less than 250 words you will have gone from villain to hero. If you take my advice, here's what will likely happen next:

1. You will improve employee morale overnight.

Your current public narrative makes you seem like a skinflint, a Scrooge who would deny Tiny Tim a visit to the doctor. With the bar this low, it's going take a grand gesture to reinvent your image. Paying for health insurance is the equivalent of Scrooge buying the Crachet family the big goose in the window for Christmas dinner.

This is not caving in. This is you being a smart businessman who knows that his employees make or break his business.

2. You will increase sales.

If Facebook is any barometer, right now, half the country hates you. But here's the bigger problem, even the people who agree with you are not enthused about your pizza! They either feel sorry for you or they're outraged alongside you. It might feel like support, but pity and self-righteous indignation are not brand builders.

Providing insurance (a year early) will enable you to reclaim the customers who are angry. Customers who agree with you will see you as a resourceful businessman who prevails no matter what.

3. You will ultimately make more money.

Think this through. What happens when a company improves employee morale, increases customer engagement, and gets positive press? They drive more revenue.

This is not just a feel good thing; solid business research bears this out. Companies that focus on improving the lives of employees and customers outperform the market by almost 400%. This scenario is either going to apply to you, or it's going to apply to your competitors.
Forbes estimates providing health insurance to your employees will cost you approximately 4 cents per pizza.

If I had come to you a year ago, and told you that for less than a nickel a pizza I could show you a way to improve morale, increase sales and get great PR in every media outlet in America, you would have done it in a heartbeat.

It's not too late; do it now.

You might be asking why I'm trying to help you even though you're not my client. Two reasons:

Reason # 1 - It pains me to watch someone lose sales.
It's like a lifeguard watching someone drown. It doesn't matter if I'm off duty. As a sales leadership expert I cannot sit on the beach and watch you go under for the third time.

Reason # 2 - I believe you are a decent person.
The public is calling you, and I quote directly from several websites, "the stingiest man alive." This is not the legacy you want to leave for yourself. I believe that buried beneath your anger and frustration is a decent smart guy who cares about his people.

Every situation calls for a hero. In this situation, the hero can be you.

Very truly yours,

Lisa Earle McLeod


Lisa Earle McLeod is the President of McLeod & More, Inc. a sales leadership consultancy. A best-selling author and keynote speaker, her new book is Selling with Noble Purpose: How to Drive Revenue and Do Work That Makes You Proud.
Companies like Apple, Deloitte, and Kimberly-Clark hire her to help them create passionate, purpose-driven sales forces.