Transcript of Food & Restaurant Marketing Podcast – Episode: Why Does Restaurant Traffic Die?
[00:00:05] Adam Pierno: Welcome back to another edition of food restaurant podcast. I am your host Adam Pierno, and with me today again is Mister Daniel T Santy.
[00:00:15] Daniel Santy: Hello.
[00:00:17] Adam: Great to be back today on this beautiful rainy day.
[00:00:20] Dan: Yes, we love the rain in Arizona.
[00:00:23] Adam: Yes, here in the desert where actually happy when it rains. So sorry rest of the country we get 380 days of sun a year, something like that. That’s not may not be a good — exact. So today we have an exciting, very exciting topic. We did an article about this a couple weeks ago and we’ve been talking about it around the office a lot. As we see concepts grow and mature and we see kind of the phases of the concept cycle for different restaurant brands, we had a very, very important question that we’ve been debating.
Why does traffic die? Really, what makes a brand that’s extremely strong one day suddenly have a drop-off and have a lack of traffic? It doesn’t mean it has to happen overnight but what causes that change? What are some of those things? And then obviously the question would be what can I do to stop some of those things?
[00:01:19] Dan: The first thing that has come in mind for me and this is just forever and ever and that is, the oversaturation of restaurants and I mean globally speaking. So it doesn’t matter if you’re a QSR, a fast casual, casual dining. There are just more and more restaurants opening each and every day. New concepts coming on, concepts that are growing because they’re getting investment money from private equity.
So the competition just continues to grow and grow. And quite frankly the demand is not necessarily come back from the Great Recession so we’re all still battling for that share of stomach as I like to say and if you’re a QSR and a fast casual opens up down the road, there’s a good chance that it could have impact your traffic. Your competition is not just the other Sam. If you’re saying what shop the other Sam which shop around the corner.
[00:02:19] Adam: That’s a great point. I think of that as the better mousetrap. So it’s not necessarily–Dan you’re dead-on. It’s not when we talked about share stomach you’re not — if you’re Quiznos you’re not just competing against Jimmy John’s and Subway and the other huge sandwich shops that are crushing you right now. Anybody that serves the same need which for Quiznos is lunchtime, get in and get out for 30 minutes and probably under $12.
That’s your competition and that could be, we’ve talked a lot about prepared food at grocery even stealing share there and getting people’s attention, getting people’s dollar. So whoever invents a way to get that 30-minute occasion, the population is not growing that fast that we can support all of these concepts. We’re going to see a shakeout eventually.
[00:03:10] Dan: Yes, there’s got to be and I think that the older your brand, the more mature, rather I guess I should say, that your brand is, the more I believe you’re at risk because people like new. People want something different and so when that new chain comes to town or opens up in your area, curiosity is going to drive you in there and right there, there’s one traffic visit that you lose just for people checking out the new brand.
[00:03:40] Adam: That’s right. But we also know that there’s a, usually after there’s trial, there’s a trough period where you get a spike of new traffic when a new concept shows up in town and then it dips down when people have tried it and they’re still figuring out whether they liked it or not. That’s your chance to re-entrant yourself either by adding a menu item or changing your value prop or whatever you can do to counter that concept and what their appeal is to people.
[00:04:08] Dan: It’s never been more important to make sure your marketing is really fine-tuned and honed in and if you’re having sales problems and I know the first thing to do is to cut the ad budget, cut the marketing budget and all that does is further perpetuate the problem. You’ve got it. We know ’cause we’ve done all the research. Share of voice so if I’m in your head, my brand’s in your head, I have an opportunity to get your dollars. Doesn’t mean guarantee it but it certainly if I don’t have you in my head then there’s zero opportunity and that’s where traffic can go to die.
[00:04:54] Adam: Yes, I can’t try what I don’t know. The highest awareness gets the most trial and a lot of times the most favorite rankings. Think a bit – everybody listening to this and Dan, you tell me if this is true, have you in the last 60 days, let’s say, talking about where to go for food, have you uttered the phrase, “Oh yes, I always forget that place.”? Did someone made a suggestion?
[00:05:17] Dan: Yes, all the time, the other way I do is right drive by it go “You know, I keep meaning to go in there.” But you never do. So that’s a great point because I think that just shows was you how hard it is to get people to change their behavior that isn’t, again, going after the “Let’s go check this place out because it’s new.” And you read about her about it but that day-in and day-out behavior, it’s very difficult to change behavior.
[00:05:44] Adam: Absolutely and that’s when we talk about top-of-mind awareness which is a bit of a buzz word cliché from days of yore. It’s really about getting people to not forget you. It’s about people knowing that you’re on the list and you’re always kind of floating around in their mind as an option. When we think about really strong brands today that have a lot of traffic like Raising Cane’s is a great example.
They don’t do a lot of mass advertising. They do a lot of community partnership but some things that they do to really maintain that dominance and make sure they stay where they are. They’re simple. It is so simple. You walk in there and just a handful of menu options. It’s really hard to mess up from the experience curve, you know what you’re going to get and they deliver it. Good if they do a great job every time so you get what you came in craving and there’s not too much movement there.
[00:06:40] Dan: Agree, and the problem with lost traffic and – we could pick on Chipotle again seems like we have, having in a podcast or two or maybe we’ve picked on them and everybody gasp, one of the two; someone will have to tell me.
[00:06:55] Adam: It’s topical.
[00:06:56] Dan: But the catastrophe is obviously also a way for traffic to get killed and obviously that happened to Chipotle. I know they’re making strides. They’re making inroads. I heard they’re going to be running more advertising and so forth and so. But boy getting it back, again, because once I stopped going, the behavior shift occurred. Behavior change I was talking about earlier, stuff that create both held on for so define yourself, right? But if you do, you’ve got to be even that much more creative in how to get those customers back.
[00:07:33] Adam: And when you talk about the catastrophe, so everybody knows what happened there and we’re going to rehash that but what’s funny about what happens in the wake of the catastrophe? So Chipotle was always lauded for being this super operator, efficient, great training, great personnel. Experience was amazing, right? And they were just always getting high fives. Well now you know the CEO now, we’re down to one CEO, comes down and says “My audit shows that customer experience is a C across the system.” Well that doesn’t happen, the catastrophe caused this ripple effect that caused that.
So it’s one thing that builds on another thing that builds on another thing and that’s where I think brands get in really big troubles. Even sometimes a small catastrophe can happen, and then what do we do? Recover and everything goes to hell while you’re trying to fix the big problem with the perceived big problem.
[00:08:26] Dan: But it’s not exactly the same but I love of the Domino’s’ kind of success story that’s happened over the last several years. They didn’t necessarily have a catastrophe but they certainly did come out and say “You know what? Our pizza really stinks.” They owned it which was huge and then, not only did they upgraded and then they started creating a better customer experience through technology. I can’t tell you enough how important technology can play a role in the customer experience. Just take online ordering for example, people find it so fascinating to watch their pizza.
[00:09:14] Adam: They do.
[00:09:15] Dan: Where is it in the assembling.
[00:09:16] Adam: Isn’t it weird?
[00:09:17] Dan: Yes, it is weird but you know what? It’s working in a big way and they are owning tech in a really big way and I think restaurants need to pay very close attention to their web assets, to their online ordering if they have it. Even if it’s their menus online got to create a great customer experience there as well not just in store.
[00:09:39] Adam: And what you’re saying, that’s a real reason why traffic. Based on behavior changes outside of your four walls so technology is profoundly changing how we think about food; how we order food, how we interact with restaurant brands and Domino’s is innovating way ahead of the field and thank God they are. They’re testing a lot of things for a lot of us that — it won’t work for a lot of brands but for the brands that scaled, a lot of them can employ some of these things that are working.
But as consumers change those behaviors, what happens is that people get left, the brands get left behind if they’re not at least up to speed on some of those things.
The challenge for brands is, are you – how do you invest? Where do you put your chips? If there’s new media, there’s new social channels, there’s new tools, do I need an app? You can’t possibly do everything if you’re a small brand. Domino’s has the luxury of having that market cap to be able to make those investments.
[00:10:40] Dan: Yes. You’re absolutely right, but the beauty of the web, the inter-webs is that even small brands can take advantage of the technology.
It’s understanding how your customer uses technology. Once you understand that and what’s important to them then whatever budgets you do have, and again limited compared to something like a Domino’s, go all in on two or three things.
Test, optimize, test, optimize and see what resonates with your audience. Believe me, I think you can win a lot of hearts and minds; you’re reaching out to audiences in the right way with the most relevant messages. By the way, you can intercept them at a variety of times a day with that.
[00:11:30] Adam: Absolutely, the most important two words you said in that last paragraph was, “Your customer.” Here’s another way that brands kill traffic at their own places.
They want to go broad and they forget who their core customer is and they don’t stay loyal to that core customer or build on that core customer.
What you said is so smart. “What is your customer doing online? Would they use an app? I don’t know.” That’s not true for everybody, right? Just because you’re a big brand — Outback has an app; do I want it on my phone? I don’t know, I don’t think so. That’s precious data. I don’t know if I want to give it up.
[00:12:10] Dan: Agree, the app world’s it’s own complexity. When I think of, especially for a smaller brand, when I think of how to leverage the web up.
Paid social is a powerful thing, where they intercept people that are in your area, geo-fencing and so forth. Obviously, any kind of geo-fencing with a mobile device is really powerful and again you can test it. It’s not like a television campaign where there’s a big upfront cost to develop the asset, then you have to commit to weeks of advertising in the digital realm that hold what my mantra is test and optimize, test and optimize.
[00:12:59] Adam: Yes. I think you’re making a really good point as it relates to marketing and just getting in there and doing small tests. Then you don’t have to bet the farm on any particular channel or solution.
[00:13:11] Dan: I think the other — you brought up something or a conversation we’re having a few days ago about trends and the changing palates of many consumers.
I think, and you might want to weigh in on this because I know you’ve done a lot of research around this, is how important making sure the flavor profiles, the ingredients you’re using, are that which just can drive traffic, can really attract people to say, “I got to try that, that sounds interesting.”
[00:13:44] Adam: Right. Which one of those things drives trial or drives a single occasion versus a lasting customer that came in and was convinced that you really got it, so in 2016, going back into 2015, we saw an investment in fish brands that are selling poke. Poke – I don’t know how to say it, I think it’s poke – and really, having these dishes that are really kind of new ones for QSR or fast casual, not your usual, if I’m going out to lunch and getting Quizno’s or Roy Rogers as listed here in your notes.
That’s a different animal. How does a brand – the reason traffic dies is that becomes a trend and a brand like Arby’s can’t add that, a brand like most QSRs just can’t add something that new ones to their menu. That concept is built around that and there’s five or 10 of those, those that’s with the new hamburger trend.
[00:14:44] Dan: Right. Agreed but what brands, mature brands can do? Like in Arby’s like you mentioned before, is start experimenting with ingredients, building on there, so they — we all know what their platform is, we all know it’s the roast beef so, what can you do that roast beef sandwich to get that consumer to say, “That sounds interesting, I want to get in there.”?
I can’t remember the last time I was at an Arby’s but that’s me.
But you’re seeing a lot of that today and I think it’s smart because it’s A) It gives people a reason to come in, B) It’s probably on trend and I’m not talking about Sriracha.
[00:15:30] Adam: Right. Let’s just add something from Sriracha. I think it’s everywhere, it’s overexposed.
[00:15:34] Dan: It’s done and unfortunately.
[00:15:36] Adam: It’s the Deflategate of condiments.
[00:15:39] Dan: Exactly.
[00:15:40] Adam: I’m tired of hearing about.
When we talk about that kind of innovation, that kind of menu innovation, of figuring out what’s the ingredient or what’s the flavor profile of poke that makes sense at Arby’s or — Arby’s is a tough example for that, but for Subway, how would Subway integrate some kind of a pacific fish in to their menu without throwing out their customers?
Strong brands that stay dominant figure out how to intelligently take baby steps towards that and say our customer is X, this is the trend, we can do something with soy sauce and some kind of a fish product and make a collection of pacific sauces. That is made up, I have not seen that yet but that’s probably along the lines of how they would go to that trend to make it work for their process and make it work for their customers.
[00:16:30] Dan: Yes and they — and again your size matters. You know for sure that Subway and other brands are testing products. That they are indeed going on then they are testing them on limited a number of stores to see the receptivity to it and then they can roll it out.
You talk about the Asian flavor profile, probably something you would want to start in the west coast and test and you wouldn’t probably go straight to Tuscaloosa with that.
[00:17:03] Adam: You may never, you may never bring it to Tuscaloosa.
[00:17:06] Dan: Yes. Again, that you can test and optimize in flavor profiles as well with your customers and offer a small bite of that item as they come in, maybe they order the same thing every time but say, “Hey would you like to try this?” It’s a good way to test. Use your customer base to test new flavor profiles, new ingredients to your point and let them tell you if they think it’s something worth carrying.
[00:17:36] Adam: Right and see if it makes sense with the rest of your menu and your concept so that they’re not confused. I don’t think Wendy’s or McDonald’s will ever sell anything that does not taste good with French fries. That’s got to be the gold standard for their menu test.
[00:17:50] Dan: Right, good point.
[00:17:52] Adam: Another way that brands can continue to keep traffic up, marketing is definitely important, staying top of mind and keep from being forgotten is one thing but keeping experience is really tight and having that strong service, so focus on service and focus on changing and adapting service to keep it strong across these changing behaviors.
As we change as consumers, our expectations are different as fast causal has swept in across the country with hundreds of new concepts. That’s changed what I think when I go to a QSR and it’s also changed as the numbers show what we expect when we go to a casual dining restaurant. So how do you adapt there?
[00:18:34] Dan: I think that the service mindset has been lost to a certain degree. I think it’s because there’s just — again proliferation, you’re fighting for staff, fighting for quality staff, experienced staff, if you’re QSR you’re employing younger people with not, maybe that committed to the brand.
I think there’s a huge oversight in how were training and really reminding them what a great experience is and that can kill traffic in a heartbeat. I went there, the sandwich was fine but the experience, the service experience was terrible. That’s a reason not to go back, I don’t want to be treated that way again, I don’t want to wait that that long again. There’s so much damage a poor service experience can do to traffic.
[00:19:34] Adam: A lot of times it’s not even something that went wrong during the visit.
You get marked off if the person at the counter just doesn’t have the light of life, I call it. Their sort of look — they give you the dead eyes when you’re saying something like, “Hey is there any way I can get this table wiped off?” and they’re like “I don’t know.” It’s not necessarily doing anything wrong but they don’t hop to you and say “Yes, let me get that for you.” The table being dirty is not a problem until it becomes a problem.
[00:20:06] Dan: Right.
[00:20:07] Adam: That comes down into service and operations and training I think; that kills traffic. I don’t want to go back and deal with that and have to clean the table myself or ask somebody who’s going to be obstinate about it. I don’t want to deal with that.
[00:20:20] Dan: Don’t forget cleanliness man. These things sound so fundamental but I dine out a lot obviously, not obviously but I dine out a lot and I’m pretty fastidious about the cleanliness thing. I hate going somewhere and sitting down and there’s food on a chair or they just haven’t wiped the table so you’re sitting there getting a napkin and wiping and so you can sit down and have a cup of coffee and a bagel at a bakery. That’s just a bad experience right from the get-go.
[00:20:56] Adam: Right. That’s not good.
[00:20:58] Dan: One of the reasons I’m actually at the restaurant is so I don’t have to clean up. [laughs] If I’m cleaning up your place, it’s a stinger man. I think we underestimate the damage it can do.
[00:21:10] Adam: I am — let’s see here. I actually did a poll about cleanliness just last week.
[00:21:19] Dan: It’s next to–
[00:21:20] Adam: And I’m looking at it’s next to godliness exactly. I’m trying to find results here and I’m not going to be able to find them in real time because I’m a bit of a stiff. But the question was: which one of these pieces of the restaurant experience sticks with you the longest? Kind of impacts your next visit. It was service, cleanliness, speed, environment. I threw in environment just to see it if will trick people. Cleanliness actually finished third.
[00:21:49] Dan: Interesting.
[00:21:50] Adam: I was testing for — That was my real — what I wanted to see if that lever turned. I pinged a couple people said — you don’t care if the place is clean? That’s not important to you? They said, “Well, it’s kind of table stakes and so yes, I guess it is important.” But it’s not top of mind to say it until someone says the place can be dirty. Well, it’s either we talk about a sticky table or a filthy bathroom.
[00:22:13] Dan: Either one.
[00:22:15] Adam: Yes. You tell me.
[00:22:16] Dan: I hate a filthy bathroom. Yikes.
[00:22:19] Adam: I also hate sticky tables.
[00:22:19] Dan: [laughs] True that.
[00:22:21] Adam: I don’t want to my shirtsleeves sticking down to the table.
[00:22:26] Dan: Exactly.
[00:22:27] Adam: All right. Well, I think we have gotten through this topic. Why does traffic die at restaurant brands? Please, if you have more questions, you want to keep the conversation going, please you can find us on Twitter @FandRM. You can also email either one of us email@example.com or firstname.lastname@example.org. Please leave notes and reviews in your podcasting app if you’re if you’re listening and you can tell us you hate it. But just leave a note. We love it.
[00:22:56] Dan: I love when people tell me they hate me.
[00:22:59] Adam: I’m getting used to it.
[00:23:00] Dan: I can only get better.
[00:23:02] Adam: Yes. There you go. All right. Well, thanks for listening.
[00:23:05] [END OF AUDIO]
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