Waning brand loyalty means the experience curve matters

Facebook, brand loyalty, experience, QSR, fast casual, experience curve

Dozens of new restaurant chains launched this year, each changing the expectation of consumers just a bit more. With more competition, it should come as no surprise that loyalty is down, or at least that brand loyalty does not mean what it once did. People take advantage of choice and offers as their budgets continue to be tight. Understanding the experience curve can help brands stem the waning tide of brand loyalty.

Is brand loyalty down? In some categories worse than others. Facebook shared a study they conducted to identify the differences between “Brand Loyalists” and “Repeat Purchasers.” Interestingly, they were able to divide up the two groups by the descriptive words they used about their favorite brands. Loyalists, it seems, use experiential words. Words like fun, friendly, clean, innovative.

New is better than known.

What is causing the change in loyalty? In a recent article in Forbes, the author ties it back to macro shifts in culture itself. Loyalty has dissolved across many parts of life, and now brands suffer as a result. An interesting read for sure. The most relevant driver listed there is “‘New’ is better than ‘Known’.” It isn’t backed by any statistics, but is inherently understandable.

For each new restaurant concept, there is a trial. People want an experience they recognize or can quickly grasp, but they do not want the same old experience. This is a shift in the experience paradigm. Quick service operations came to dominance in the 70’s and especially the 80’s by standardizing everything about their experience. Fast casuals have exploited some of those standards for better or worse. Guests are familiar with waiting in line for a hamburger at Five Guys from QSR experiences. But the true open kitchen and communication style of the staff tells guests immediately that this is going to be different.

Facebook, brand loyalty, experience, QSR, fast casual, experience curve
Brand loyalists use more experiential terms to describe their favorite brands (in orange), according to Facebook.

McDonald’s has been tinkering with their experience, to find ways to align with Fast Casuals. And some new ways to stand out. Make no mistake, McDonald’s understands they will never identify a new permanent model for experience. What they are testing is more likely how much change consumers need to feel in each experience? How similar does each visit need to be to feel familiar in a positive way? How different does each visit need to be to feel new?

There are typically three phases to the crest and fall of brands in this space. At Food & Restaurant Marketing, we call this the ‘experience curve.’

Trial phase

A guests first visits are critical to building repeat traffic and word of mouth. To survive this initial phase the restaurant has to fall in the middle of the experience curve outlined above. Some things should be familiar, some things new, zero things bad. Of course, this all presumes delicious food, well prepared.

For fast casual pizza concepts like Pie Five or Fired Pie, this is the layout of a traditional pizza restaurant. A walk-up counter that feels familiar, and visible toppings as people have become accustomed to at Subway or Chipotle. But the idea of choosing those toppings for a pizza is the twist; something new.

Comfort and exploration

In this phase, guests get more bold as they understand the concept. They have their ‘usual’ favorite items. They explore the menu and try to find new ways to enjoy the restaurant. New ways to make it their own. This might come as soon as a third visit. The guests begin to look for variations of the standard menu, or perhaps for ‘secret’ items a few more visits in.

Guest will begin probing the staff and often online for tips during this phase. This behavior is the maturation of the brand experience. But also, can lead to the next phase.

Cresting popularity

This phase may not begin for a long time. It is dependent on the ways people are able to experience and change the concept to their whims. When guests run out of new items to try, or ways to mix them up, frequency of visits begins to decline. Word of mouth slows.

The key is in extending the comfort and exploration phase by mixing up the menu and tweaking the experience. Add in new elements and take out tired ones to keep the experience fresh. Guests will reward brands who understand the experience curve.

Author: Adam Pierno

Adam Pierno has a one-of-a-kind perspective on restaurant and CPGs. He investigates the connections between strategy, media, digital and business goals employing social media listening, analysis and traditional consumer research to find meaningful insights for brands thinking about their futures.