Restaurants and the trend toward anti-brand.

I read an interesting article today by Tanya Gazdik on the anti-brand. In it, she points out that many brands are going low-fi to appear less polished and salesy. She cites a brand expert using upstart brands Casper and Thinx as examples.

Media fragmentation is creating more and more informal channels for consumers. As they grow, these channels become targets for brands. Think Snapchat or the proliferation of individual YouTube channels. Polished content doesn’t look right there. Since media has splintered, brands have to find smaller niche channels to reach their audiences. And they have to be clever to stand out there. Enter the anti-brand.

Thinx and Casper sell very specific consumer products. They can afford to take a unique tact to differentiate themselves from similar competitors. What about your restaurant brand? True, differentiation is as critical as it’s ever been. But how are you presenting the brand throughout the customer journey?

We’ve seen the slowdown of casual dining megabrands. This is partially a reflection of the same trend against slick brands rolling out across the country or world that Thinx is riding. On one hand, consumers have rebelled against franchises because they want more unique experiences. On the other hand, they demand to know what to expect from a brand. This is where the anti-brand narrative falls apart for restaurant franchises.

The efficiency of a known experience powers restaurant brands. This is why for individual restaurants, critical reviews and sites like Yelp! are so important. Most people seek context before they choose a restaurant. And for most meal occasions, the cost and time commitment of a fast food, fast casual or casual dining restaurant will provide quick context. Are you in the mood for a sit down meal? Do I want to keep the check under $10?

Your brand needs to quickly reflect these desires, as well as a description of the cuisine. Going anti-brand for a restaurant brand essentially means going independent. But even independent restaurateurs like Sam Fox create strong brands for each of their concepts. These brands communicate the menu and the style of the place before guests ever step inside. The brand makes independent restaurants attractive to customers, investors and potentially buyers. Unlike most independents, larger restaurant brands have to work across multiple markets. Someone in Dallas knows the food and drink will be just like the food in Des Moines.

For this reason, going anti-brand means going anti-mass. It is a trade-off between attracting a wide audience by being understood, or playing to the trend of losing the polish. The anti-brand diminishes the ability for people to recognize your offering or to tell others about it. California Pizza Kitchen was great from the launch of its original location. But as locations we opened, they had to standardize the offering to satisfy repeat visitors and to live up to expectations. If French Laundry went national, there would be standardized elements repeated in each location.

Does this mean we will see a reduction in branded “happy birthday” songs from restaurants? Probably. This level of polish will be one of the first things to go as we explore ways to incorporate the anti-brand ethos into restaurant brands. Maybe that’s a good thing.

Dunkies’. Honoring your true customer.

Before you read this, watch this. SNL aired a pretty genius spoof of ads for Dunkin’ Donuts showing their ‘real customer.’ Quick recap to those who don’t care to watch. Casey Affleck stars as a Boston local giving the camera crew his real Dunkin’ experience.

This piece was shared with me by a dozen different people on five different media. Why? Because it gets to a core truth. The Dunkin’ ads focus on people in buttoned down shirts, designer glasses, drinking their premium drinks. But that’s not the customers the brand grew up with. Dunkin’ locations multiplied in blue-collar towns across New England and the northeast. Long-time customers or brand observers have noticed the moves Dunkin’ has made to steal share from Starbucks and other premium chains.

This week Quizno’s announced their investment in a premium sandwich concept – Zeps. This is a clear move to chip off some share from other sandwich brands, but also a signal. Quizno’s sees opportunity in the premium space. Somewhere above Subway’s mass appeal and budget friendly menu, maybe above Jersey Mike’s. Similar to the move Dunkin’ Brands has made over the past decade.

There’s a big difference. Customers of Dunkin’ in the late 90’s had a firm grip on the brand and understood it. Stores were woven into communities (like mine). Quizno’s never achieved such a position involving loyalty or foundational understanding. They flirted with it briefly but were never able to solidify it. Adding a premium menu or an entire premium brand won’t confuse any of Quizno’s hard core customers, because there really aren’t any. Sorry.

And this is the challenge for brands trying to expand, and why most fail at doing so. A young brand has a loyal core of fans. People who visit more than average and bring new people into the restaurant. These customers come to the place and recognize others like themselves. They become a tribe united around the brand. A tribe might be based on a type of cuisine, type of music or decor, or neighborhood. Strong brands have this early on, and figure out how to grow the tribe without alienating the original customer.

Authenticity doesn’t apply to everyone. For example, discount brands don’t have tribes. Subway doesn’t have a tribe. They don’t attract people based on lifestyle. Subway attracts based on features. Which works for them, because they have scale. When Subway adds menu items, they do so with mass audience in mind. And they ensure alignment between new items and sales. What they do not do, is roll out items that will turn off or confuse their core audience. Or worse, signal that the place is no longer for them.

Dunkin’ has successfully navigated the addition of premium coffee items that better align with the Starbucks audience than their original customer tribe. They did this by continuing most of the original items that won them those early fans. They maintained tribal authenticity by honoring the original customs. Order a ‘coffee regular’ today, and you’ll get what you got in 1995. Or 1975.

Towards the end of the SNL piece, Affleck’s character has a verbal exchange with one of the new Dunkin’ customers. The new customer looks down his nose at Affleck, “Go back to Starbucks,” Affleck screams back. Implied, we want our brand back.

Transcript of Food & Restaurant Marketing Podcast – Episode: The Ups and Downs of Restaurant Loyalty Programs

Transcript of Food & Restaurant Marketing Podcast – Episode: The Ups and Downs of Restaurant Loyalty Programs

[00:00:03] Adam Pierno: All right, welcome back to another episode of Food and Restaurant Marketing. I never get tired of saying that.

[00:00:11] Dan Santy: Right.

[00:00:13] Adam: So again I am Adam Pierno and I’m here again with Mr Dan Santy.
[00:00:18] Dan: Good afternoon.
[00:00:20] Adam: Today we are going to talk about something near and dear to our hearts, loyalty programs for restaurant brands.
[00:00:27] Dan: Well may be near, but not dear. We’ll see what I have to say about that later.
[00:00:34] Adam: Yeah well we’re, I think, unique educates, because we’re neither advocates or enemies of loyalty programs, we definitely are pragmatic about it.
[00:00:44] Dan: Absolutely.
[00:00:46] Adam: The key is: really when does it make sense for the brand, what stage of life the brand is in, how are sales, how are your customers, what does loyalty look like?
[00:00:53] Dan: What’s the strategic initiative that loyalty programs are designed around, but we’ll get into all that here now in a minute.
[00:01:00] Adam: Yes, we can we can jump in, so let’s talk about some of the reasons that we’ve seen brands launch loyalty programs. You know essentially what are you trying to do when you’re when you’re launching a program like that.
[00:01:13] Dan: That’s the number one problem with loyalty programs, I’m glad we’re kind of getting at that thing that irritates me the most about watching brands that jump into this field because I think a lot of times it’s a strategy that people will employ due to a short-term problem, and because it’s a short term problem they think they’re solving, they jump into it and they go and, forgive me Fishbowl but I’m gonna pick on you here. They call a service like Fishbowl and they pay them the fee and thirty days later, whatever the case may be, they’ve got a lot to program up and running, but they’ve not really thought through any of the mechanics of the program, do they really think it’s going to work, if so how and what’s the phase one, phase two, phase three of a loyalty program.
[00:02:04] Adam: Right, what’s the end game besides the short term problem.
[00:02:08] Dan: Exactly.
[00:02:09] Adam: So for everybody listening we know that you are keeping track on a daily or hourly basis of stats like traffic, sales and counts, looking at average ticket, looking at repeat traffic, so how often are people coming back and how are people kind of peeling off and losing interest in the brand. Those are the metrics that usually, that we’ve seen trigger panic from operators where they say well we better do something to create some loyalty here.
[00:02:41] Dan: Right and free — listen, I’m a big fan, I’ve got a friend of mine back east, he’s in the finance game and he says that people — number one, they like free sh*t, forgive me for saying it. And number two, they like cheap S-H-*-T, so it makes sense, right? Like OK well we’re going to reward them for coming back, but are are we really rewarding them for coming back or are we just getting the least amount out of them and then rewarding them based on whatever formula we’ve created.
[00:03:15] Adam: Yes, and that’s something that we always debate, we’re going to talk about that when we get a little further into this, but you know at the top if your goal is to solve a traffic problem, if traffic is down then what we always say when we’re — when we look at these programs, make sure you’re engineering a program that has traffic as a defining metric. I get loyalty from making multiple visits, if it’s sales then reward me for paying more or buying more things.
[00:03:43] Dan: Exactly.
[00:03:43] Adam: A lot of times Dan referenced Fishbowl, there’s a lot of “out of the box” programs-which I like turnkey-but turnkey often means one size fits all and we know that, no it doesn’t.
[00:03:56] Dan: Absolutely not.
[00:03:57] Adam: It fits awkwardly.
[00:03:59] Dan: At best. That’s right and having discipline to be strategic is hard in today’s world, I get it. You’ve got pressure from either the C-suite, depending on who you’re reporting to, if you are the C suite you’ve got pressure from private equity or the markets, whatever the case may be, so I get that. However, when you implement a program like this you’ve got to look across the entire spectrum of your marketing effort and say “Where is this going to fit in, how does it fit in and the why?”.
You referenced earlier, Adam, all the data that’s available to our clients, they have so much information as a matter of fact, a lot of the articles that (I’m going to digress here from), a lot of the articles you’re seeing lately is big data, great almost like it’s too much data now, now we’re overwhelmed by it and in some respects when we’re overwhelmed we don’t pay attention to any of it and we resort to anecdotal commentary.
So you’ve got to look at the data and say “Where are my real core problems, what’s really happened to the brand” look over a longer period of time, don’t look at the quarter, heck don’t even look at the last year, look at over a two-three year period, because you have that kind of data and say “When were things good and why, when did things start to suffer and why and how do we get that back?” That requires discipline to look at the data and be very analytical about that data and number two is, then make conclusions you’ve got to draw conclusions and make recommendations, which is risk oriented and I know everybody’s a little risk averse and they’re just looking for a solution orientation or tactical and we implement things that ultimately fail.
[00:05:52] Adam: If you just jump to a conclusion, it’s not good. There are some brands that are doing it very well so we want to talk about those and look at what we can learn from those brands so one brand that does it exceedingly well is Starbucks, they’re not exactly a restaurant, definitely atypical in everything that they do, but their loyalty program is really great-
[00:06:16] Dan: And you discovered, this was your revelation or your insight, really, about a year ago, maybe a year and a half now, when we did a study of what’s happening in the restaurant industry and we came up with this idea about — Adam came up with this idea about friction and when you create friction in any program, any marketing program and specifically, specially in loyalty, you’re reducing its opportunity to be successful. When something becomes frictionless, which is what you talk about a great deal to our consulting clients is exactly what Starbucks has done, they’ve eliminated any of the friction, it’s just really peerless in how they execute this. Now they have an enormous brand loyalty about them they have a high frequency level-
[00:07:08] Adam: and they have an advantage in their product mixes, it’s just a lot different, they have a lot more flexibility, so if they’ve got me down I figured it out this morning in preparation for this I get about one cup free for every five I buy.
[00:07:22] Dan: Interesting.
[00:07:23] Adam: And that’s the metric. I sort of watch the points they offer me and they’re very opportunistic, the way they offer me programs, I compared notes with other people here and I say “Hey, I got this thing so you get two hundred points, did you get it?” “No I didn’t get that one.” “But I was in there last week.” “Oh, I hadn’t been there in a month.” A lot of times we talk about customization of these programs, we talk about digging into the metrics and everybody talks about all the data. I can tell that Starbucks is actually using the data to provide better experience and unique offers to people based on behavior, they’re triggered by actions or they’re triggered by absence of actions and they’re unique to each person. Standing ovation for that and it actually is effective on me and I’m pretty cynical about these types of programs.
[00:08:09] Dan: Here’s the important thing to understand about — what Adam’s talking about, the number one thing they’re doing is leveraging technology, leveraging data and algorithm to understand his behavior in order to then optimize how they’re going to reward him. That’s a whole another level, you know. I’ll go — again, forgive me Fishbowl, you guys are perfectly fine people, I’m sure, but like Adam said, that’s just this basic “out of the box” solution-
[00:08:40] Adam: One size fits all.
[00:08:41] Dan: One size fits all and it’s not going to do — it’s not going to get anywhere near doing what what he’s talking about, now we’re also saying that some mid-sized brands, even smaller brands, don’t have the resources to use that technology or employ that technology. But again, back to my “phase one, phase two, phase three” comment I made earlier, think this through. Say “phase one, let’s get something launched, let’s launch it on this level with the plan”, test and optimize, that’s what we always say. Test it out, optimize it and continue to make it better, which I believe is another thing that Starbucks has done over the years is continuously improve on their program.
[00:09:26] Adam: We did a survey here to get to some brands that people really like their loyalty program, Red Robin showed up a lot and that’s a brand we just talked about in our last podcast on brand extensions. I guess the thing people like about it — and this is something Dan and I talked — we debate this endlessly, is that the biggest comment, the most common comment that came back about Red Robin was “I feel like I’m always getting a reward. Every time I go I’m getting a reward.” And the follow up questions are “Were you already loyal to the brand?” “Well, yes.”
[00:10:00] Adam: So you’re already loyal, you already like it, you’re already a regular and now we’re giving you something for free every single time you come in. Dan, do you think that’s smart?
[00:10:07] Dan: That falls under one of my favorite things. What Red Robin is doing whether it’s deliberate or not, in my opinion, is — they’re surprising and delighting you every time. If that frequency of which I’m getting rewarded is high, I’m going to not be as critical of what the reward is. If it’s an order of fries, a fat-free soda or whatever the case may be, I’m just like “Wow, great, thank you. You just gave me a reward last time” versus “I got five more visits before I get a nickel.” Surprise and delight is another — quite frankly, it could be its own loyalty program if implemented correctly. That’s a whole another subject really falls under the restaurant experience.
[00:10:55] Adam: No, and it’s interesting because they are — it’s very dissimilar to the Starbucks program. There’s no app, you just use your phone number, and it is a kind of a surprise and delight. The offers are different every time. There is a wide variety of things, sometimes it’s a free sandwich or a free soda or free dessert. It’s varied and it is surprising whereas the Starbucks one is always these points that you are going to redeem and choose. They work for different reasons and obviously two different types of customer. So I love that they’re different.
I’d be surprised if those two operators have the same program, both really good programs. The last one that came up was Chili’s. People just really like that program. They just felt like one of the most common things about it was, it was referred to as “under the radar”, pretty common, or no pressure to join which came up a lot that it’s almost got that speakeasy effect. They’re not pushing it on you and saying “Download this app today” every ten seconds, just pretty easy to get rewards and there’s not a lot of pressure around it. I think we know a thing or two about people and how much they like being sold.
[00:12:00] Dan: Oh my gosh, that example about Chili’s is the number one thing that drive me crazy about a lot of casual dining places. You can tell — now again, I’m in the consulting industry but I hate when I get my check at the end and there’s this postcard, and then the waiter puts the pitch in or the waitress, and says-
[00:12:25] Adam: “You guys are members of the app yet?”
[00:12:27] Dan: “Sign up here.”
[Crosstalk] [laughter]
[00:12:25] Dan: And you know damn well that these-
[00:12:28] Adam: Well, I like that they — when they employ training, but I don’t like when they get there.
[00:12:32] Dan: I do to, yes. I have to give him credit because I’m sure there’s some level of advocacy to it but it’s so blatant and so obvious. Then three months later I come in and they’re no longer doing it. You know it was a promotional period and they were spiffing kids to — the guy who got the most sign ups in the day got a free ice-cream cone or something like that, I don’t know. But I guess, to your point, people don’t like to be sold. As you pointed out, we’ve learned that a long time ago.
[00:13:03] Adam: Yes, we know that for sure. When we compare and contrast these three brands that they do it really well, and there will be a blog to follow up on this with a little more detail. One of the common elements of all three is there’s no pressure to join. All three of them are very hands off, their signage was POP. You go to their websites, you can see it. Especially on mobile for Starbucks, where there’s a downloadable — download button. They don’t really hit you over the head with it at any of those locations. The Red Robin one is almost hard to find.
[00:13:33] Dan: Yes, interesting. Adam, correct me if I’m wrong. McDonald’s have a loyalty program?
[00:13:40] Adam: No, sir. Even during their darkest time they did not roll out a loyalty program. {Editor’s note: Reports in the link above to Forbes suggest they are investigating a loyalty program or app}
[00:13:47] Dan: I think there’s a lot to be said about that.
[00:13:49] Adam: Why do you think that is?
[00:13:50] Dan: It’s a it’s a great question. I think they understand that they have a frequency level from their customer, and they have a price point, a value play that they’ve got going, that I don’t think they’ve got a lot of room to buy ten burgers and get a 11th one free.
[00:14:07] Adam: You think it would impact margin.
[00:14:10] Dan: I think so. When I look at Starbucks and Red Robin and Chili’s and I don’t know all their margins but you have a general idea based on our experience what the ranges are, their margins are reasonable. Starbucks is ridiculous, giving away a cup of coffee to me for buying five cups.
[00:14:27] Adam: That are marked up 500%.
[00:14:34] Dan: Yes exactly. That’s one theory I have about McDonald’s.
[00:14:38] Adam: No, that actually makes a lot of sense.
[00:14:40] Dan: The other is that it’s a frequency play, that QSR. They’re getting the most visits.
[00:14:50] Adam: McDonald’s is a good — you brought up McDonald’s but now that I’m thinking about it, there’s not a lot of QSRs is in general, true QSRs, fast food hamburgers that have a — none of them have a loyalty program.
[00:15:03] Dan: Burger King I don’t believe has one. I don’t know if Subway does or not, I probably could have done that homework. Anyway I just find it interesting that the- {Editor’s note: BK and Subway do in fact have underpublicized programs (linked above)}
[00:15:09] Adam: They have promotional periods but they do not have ongoing sub program.
[00:15:13] Dan: Which we’re going to be talking about that discounting on another podcast later.
[00:15:19] Adam: But yeah, we just brought up the punch card. I think people hate the punch card. It seems like although Dutch Brothers came up and they are the only one that does have a punch card that people really like. People don’t want to carry it around, they don’t want to remember it, they want to kind of put the onus on the brand. And I think brands would be wise to heed that advice. The more you make me work and the more friction that you add, as Dan referenced earlier, the less of a response you’re going to get. You jump through the hoops, not me.
[00:15:48] Dan: Exactly I was at CVS the other night, completely different category. My wife had already signed up for whatever their program is, and I don’t have to do anything I just give them her telephone number.
[00:15:57] Adam: Right.
[00:15:59] Dan: And her name comes up. And they’re not rigid, they don’t go “Well, who are you? You’re obviously not Liza.” [laughter] “No, I’m not. Not yet.” But man, talk about easy. Then I get this printout that says “You just earned ten bucks.” And I’m like “Oh, what the heck, ten bucks.” There’s that frictionless thing again that we are talking about-
[00:16:29] Adam: They just basically hand it to you as a coupon. That’s the way to do it. What people forget and we laugh about this, we talk a lot about hospitality on the food side and we sort of leave hospitality off at almost everything else we do in a restaurant. This is a hospitality play, even the loyalty club or the loyalty program, you have to make it easy and be a good host and say “Okay I’m going to roll this program out to build loyalty, I’m going to make it really easy for you to use it, as a good host. I’m not going to build it and put up all these gates around it and put an alarm on it, make you climb a ladder and ring a bell. I am going to make a very low barrier to entry, because I want you to do it. I want you to really feel like you’re getting something for nothing.” It’s not easy to do but it’s worth it.
[00:17:17] Dan: I couldn’t agree more. Take a page from your local bartender. You go and you take care of them night after night. Every so often, a couple of those cocktails aren’t going to be charged to you. Talk about frictionless loyalty program.
[00:17:34] Adam: Yes, and I think the other thing all three of these do in dovetailing right off that, is they make it pretty easy to rack up a reward. It can be something really small, an app or a free drink or something, but Starbucks, Red Robin and Chili’s all make it pretty easy. Although from the research we’ve done, Dunkin‘ brands — people are saying they get almost a free coffee a week from that program. I have not used that program but they say it’s very easy to get free cups.
[00:18:04] Dan: They’re finally getting some — they’re getting enough locations out here in the West. Actually, we can start becoming Dunkin’ customers again, Adam being from — both of us actually being from back East there’s a there’s a Dunkin’ on every corner.
[00:18:19] Adam: We were just down and count here a little bit but hopefully they’ll start adding more. What are some of the typical flaws with these loyalty programs? Not the three we were just talking about, but in general.
[00:18:33] Dan: Well I go back to what I was saying earlier and that is not thinking through the strategy. They get fundamentally flawed because you haven’t spent the time to say “What do I want to reward? What behavior am I trying to change or effect?” It’s the strategic side of it, it’s so easy to become tactical around loyalty that, you just go “Well, let’s do this, for every five you get one”, or whatever the formula is. That’s just some random formula that somebody came up with versus saying “Hey, here’s the behavior we need, what is going to change that behavior? What loyalty effort should we put in to get that behavior to shift?”
[00:19:18] Adam: That’s right and you’re speaking of strategy, we always relate strategy to finding the ideal customer and understanding how we want to move that customer and how to make them have a great experience. If in that “buy five, get one” model — really what you’re doing is you’re bringing in a coupon customer that’s looking for 20% off. They’re looking for one-fifth free. If you have a traffic problem, is that the solution long term to a traffic problem to bring in a thousand new guests that are all discount hunters and only come in when there’s a coupon or a program in play to give them something free?
[00:19:43] Dan: Right.
[00:19:44] Adam: Your sales are not going to increase even though your traffic is going to.
[00:19:59] Dan: The thing that you don’t know is, would I have come in five times anyway, without the sixth incentive. All you’ve done is giving it away and I would argue that I have not necessarily walked out feeling great, going “Woohoo, look at me” because what I’m thinking about is what I had to do in order to get the free.
[00:20:07] Adam: Right.
[00:20:00] Dan: You didn’t have to do anything and I was coming here anyway. Again, that’s that piece of saying is it really — are you creating loyalty, is it a true reward? When I look back on it, my experience with it is that if I had to do all the work to get the reward, I’m not giving you very much credit for it as a consumer.
[00:20:30] Adam: Right, absolutely. One thing we’ve always looked at, are we conditioning people to come in and just expect the reward. Is that smart? What we try to do in our consulting business is really understand the best customers and know these people. Are they going to come no matter what, they’re loyalist. You have this core, or you have a broken audience. Let’s do something to spiff some people and get them in the door to try it, and we think once they try it, they like it.
[00:20:59] Dan: Exactly.
[00:21:00] Adam: It’s where is your concept from an evolution standpoint. How much help do you need, what kind of guests you have, and how much can you rally those people.
[00:21:09] Dan: I would say that the question is, what’s flawed about some of these programs, “Have you looked at your competition?” People are probably getting really annoyed with me right now, because they’re like, “Jesus Christ, how much work do I have to do to put this loyalty program back,” but-
[00:21:24] Adam: Jeez, a lot.
[00:21:26] Dan: You should do a lot, because you’re giving up profit, you’re giving away a product. Make sure it’s intelligent. You got to look at your competitor and say, “What are they doing? Can we do it better? Do even need to do it at all?”
[00:21:43] Adam: Right, yes. “Are we sure this is the right answer?” The other thing about when you create a loyalty program, you’re building discounting in, you’re building in cut margins overall, over the whole product category of everything you got. Profit at that point relies heavily on upselling, training your staff to really provide a great experience so that, for someone like me that goes in, and I’m ordering just the basic thing to get the reward, I’m upsold, also adding an appetizer or a side, or extra large, or a combo. That’s got to be trained in too. When you’re rolling out the loyalty program, making sure your staff knows. The way we’re going to make money on this is by blank.
[00:22:29] Dan: Right.
[00:22:30] Adam: Right?
[00:22:30] Dan: Yes.
[00:22:30] Adam: Making sure that operations is rolling that out at the same time.
[00:22:33] Dan: It’s so, so critical. The better programs do exactly that, gets in it for that pizza, I’m just making that up, “Won’t you upgrade that pizza for a dollar more, I can give it to you”, this way or the side, as you pointed out, the drink or whatever case may be. I think they managed that customer that’s going to be, as you pointed out earlier, that coupon customer who is very rigid, and really like “No, this is what I’m getting-”
[00:23:01] Adam: “I’m spending 3.99 for my six inch sub and not a penny more.”
[00:23:04] Dan: Yes. And that’s fine. We know that that consumer’s out there, and we love them too, but if you don’t have the training in place to at least be asking, you’re not going to get the weakling like me, who goes, “Oh, I’m not spending as much money this time. Why don’t I get that side”, or whatever the case may be.
[00:23:28] Adam: Yes, and you feel like you’re getting a deal, so you don’t mind that little splurge. I think the key is to not punish people for participating. The key is to make it easy for them, to give them something so they feel like they’re getting a deal, even if they do uptake the upsell, and then really make it feel like a reward, and not feel like a punishment.
[00:23:48] Dan: I love this next topic, it’s part of this whole discussion around loyalty and you asking what have been some troubled programs. I got to tell you, I couldn’t agree more with your commentary earlier to me, before we started the podcast, about Chipotle. They roll this thing out, they make a big deal out of it, and then all of sudden, you never hear another word about it. It was a short lived thing.
[00:24:14] Adam: It was a weird LTO loyalty program, that was-
[00:24:17] Dan: Yes, it was-
[00:24:18] Adam: Confusing.
[00:24:19] Dan: Yes, it was confusing, it was weird, it felt desperate to me. I just find it so interesting that this brand that had such a shine on it for so many years is just struggling to really get back. They really are.
[00:24:38] Adam: Let’s talk about that. Obviously, the loyalty program was conceived to fight that. Traffic is down, sales are down, stock is down. The founders getting chased out of there by activists-
[00:24:50] Dan: [laughs]
[00:24:49] Adam: It’s all, nothing good’s happening. Obviously, this was a promotion they created to try to get people back in, try to reset. It was designed very deliberately with frequency in mind. You could see how they plotted it out if you have spent any time researching it. We will have a link in the show notes of the program. Obviously, it didn’t take. I think the people who used it were people that were already one foot back in, and they used it like a coupon.
[00:25:18] Dan: Exactly.
[00:25:19] Adam: Now, they’re not back.
[00:25:21] Fan: Right. Again, there’s probably strict strategy error that may have been made. We’re not inside the Chipotle, so we don’t know. We wish someone would call us and yell at us from Chipotle, we would love that.
[00:25:32] Adam: Yes, we will help, yes.
[00:25:35] Dan: I do believe if trial or retrial, in other words lapsed customer was the true strategy, is that really the answer? I just read that they’re testing television. You know me and television.
[00:25:53] Adam: You love television.
[00:25:53] Dan: Television and I are going to our grave together.
[00:25:56] Adam: [laughs]
[00:25:56] Dan: It might actually be a potential savior for them, depending on how they do the commercial. I’ll be commenting on that in another podcast, I’m sure. But again, I think your point is well taken. Why did you do that loyalty program? What you really thought that — I’m a lapsed guy from them. Now I’m a low frequency Chipotle guy. You’re probably above average to me-
[00:26:27] Adam: Even now, I’ve started going back.
[00:26:29] Dan: You went back.
[00:26:30] Adam: I ate there today.
[00:26:31] Dan: You did?
[00:26:32] Adam: There was zero- [crosstalk]
[00:26:32] Dan: You don’t look green or- [crosstalk]
[00:26:34] Adam: There was no wait. There was no line. It’s part of my favorite thing.
[00:26:37] Dan: No.
[00:26:37] Adam: The food is back to normal, and the lines are not. When there’s a wait, I probably- [crosstalk]
[00:26:42] Dan: See, that could be a reason I might go in, because there’s no lines. [laughs]
[00:26:46] Adam: Yes. You know I have seven minutes for lunch. I just go out running and get it- [crosstalk]
[00:26:50] Dan: Who allowed that much time for lunch around here?
[00:26:52] Adam: [laughs]
[00:26:53] Dan: That’s what I want to know. I feel like they did some research, and they asked the customer, “If we did this, would you come back,” and they said, “Yes, probably.” [laughs]
[00:27:06] Adam: Well, it’s that researcher, it’s that top two box at 60% in 10. It’s like “that doesn’t mean anything, you idiots.”
[00:27:13] Dan: [laughs] Yes, exactly.
[00:27:14] Adam: Of course, it’s easy for me to say, I’m fine.
[00:27:16] Dan: Okay. They’ve been a good punching bag, maybe we should-
[00:27:20] Adam: Yes, they don’t need to- [crosstalk]
[00:27:21] Dan: -move on to Dutch Brothers and their punch card.
[00:27:23] Adam: Yes, we’ve talked a little bit about the punch card, but people in our little poll that we did, which was far from scientific, people just bashed it. The comment we got was, “Love the brand, love that they have a program, but hate-

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