Three Steps for an Applebee’s Turnaround

Applebee’s recorded a 7.2% drop in Same-Store Sales (Fortune) in the 4th quarter of 2016. With the end of Q1 of 2017 looming, my assumption is that it’ll be their 7th consecutive sales decline. With the recent resignation of DineEquity’s CEO and the hiring of iconic ad agency Grey, Applebee’s is no doubt gearing up for its attempt at a turnaround. Yet without three essential steps, Applebee’s will continue their downward trajectory.

Develop a tighter, more defined brand.

I’m not talking about a tagline like Neighborhood Grill and Bar. I mean actually define why you exist and your largest point of difference from your competition. When thinking about some of the brands in the casual dining category some have done a fairly decent job at differentiating to the consumer. Think Buffalo Wild Wings, Red Robin, Outback Steakhouse. Each brand has a theme.

What does Applebee’s specialize in? It’s not clear.

I’m not here to say that these brands are thriving and setting the pace for the restaurant industry, but remember that casual dining as a whole has had a rough two to three years and you have to give me a better reason than value alone for me to choose to dine at your restaurant. The brands above do that. This leads me to my next point.

Focus on your differentiator.

The brands mentioned above will always be on my shortlist if I’m thinking about or craving wings, burgers, or steaks. They deliver on what I’m craving and are established as specialized and innovators in what they specialize in. I can’t think of one thing Applebee’s specializes in. Nothing stands out for me. Even competitor TGI Friday’s while not specializing in a specific dish, is differentiating with its endless apps, which the company announced will be a permanent part of the menu.

Applebee’s is “famously” known as a grill and bar. So I was surprised when looking at their menu and there were stir-frys, pasta, tacos, and something called a fajita rollup. Hey, at least there wasn’t any Kale on the menu!. The menu read more like a Cheesecake Factory menu than Applebee’s. You’re a bar and grill. Give me fun, straight forward bar food. In today’s restaurant landscape, this would differentiate. I don’t want a caprese mozzarella burger from you, ever. Or a burger with an egg on it for that matter. Master the basic things that people love about bar food. You don’t even have onion rings as an appetizer!

Put the website to work.

Applebee’s website looks like it’s from 2006. There’s very little food imagery so there’s no craveability being created. The homepage isn’t responsive so it’s difficult to navigate to other pages on the website and the menu is filled with images of dishes shot at a distance, so it’s hard to see what a dish actually looks like. A website isn’t the most important channel for a restaurant brand but they need to improve the basics to get on the same level as their competition.

If Applebee’s takes these simple steps and give their audience a reason to come back and try them again, they have a chance to turn their slump around. It’s time for their people to listen to customers and vendors.

 

 

Family matters

Some concepts are designed around kids. A brand like Chuck E. Cheese’s will always have an uphill climb trying to convince adults it is a place they’ll enjoy after decades of marketing kids parties. Winning with the family is no easy task. For every day occasions, people with kids have a simple concern that most brands can address, but few do well.

Kids are little people. People have opinions. This causes stress during family dinners. Not the opinions themselves, but the way those opinions differ from the adults. And the “conversations” that come from those disagreements.

Restaurant brands that make a family comfortable during their visits will win the next one. This is critical to sustaining sales growth because obviously, a family visit accounts for more seats and a higher average check. So winning with the family is becoming less and less optional. Here are three ways to ensure the next family visit is a good one from beginning to end.

The challenge is to give a family a chance to enjoy a meal together, without creating a separate experience in each seat at the table.

1. Menu planning

The first thing a parent does when they’re seated with their kids is to look at the kid’s menu. The best ones have some familiar items and one or two ‘experimental’ dishes. Most kids have a wheelhouse of a few items they love. When a parent doesn’t see anything, they fear the whole family will suffer.

Reading this, the basic items should be clear: chicken fingers, mac and cheese, pizza. The basics. The other side of the coin is finding a way to tie those basic items into your concept and make them your own. Red Robin does a great job of offering a variety of kids dishes with a spin on them. The kids are happy and the adults feel like they are giving them a treat.

2. Balance the kids and the adults

As always, the trickiest part comes with operations. Having a solid kids menu is important, but executing is more important. Train staff to read the table. If the parents appear to be anxious, chances are it is about the kids. There are simple ways to address this. For example, the server might offer to take the kids’ orders early, as with an appetizer course. Getting the kids fed tends to take some stress off of the parents. This simple practice is surprisingly rare.

Skewing too far towards making the kids happy is another way to lose the adults. Don’t forget that the kids aren’t paying the check. A little focus on easing the family into their meal is great, but too much can make a restaurant feel like a carnival, something adults want to avoid. Brands don’t have to ignore the grown-ups to provide an experience kids will enjoy.

3. Let us entertain you

The main idea is to provide some distraction for the kids. Places like Chevys Fresh Mex give kids fresh tortilla dough and crayons to entertain them. This pleases the kids AND reinforces the promise of freshly prepared food. Red Robin has added interesting games and activities that a family can bring back to the table to enjoy separately or together.

Buffalo Wild Wings takes the concept a step further by offering game tablets for the kids. It’s only fair since the adults are provided with dozens of televisions. The balance with entertainment is to give a family a chance to enjoy a meal together, without creating a separate experience in each seat at the table.

Do these steps solve every challenge in pleasing the family guest? Admittedly, no. But surprisingly, many restaurant brands underserve the family and surrender their share of higher count table occasions.

Define your competitor.

Today’s competitor is essentially everyone. But brands have to solve a specific problem that attacks the vulnerability of just one key foe. Casual Dining brands have a tremendous challenge on their hands. They are facing erosion in sales and traffic erosion from all directions. Fast Casual concepts continue to grow (albeit a bit more slowly). The common response from legacy brands in the Casual Dining space is flawed.

Red Robin attempted to fight off the category by launching its own FC burger sub-brand, which they recently folded. From a review of the concept it’s not clear which competitor it was designed to beat. And this is the most likely reason for its failure. Identifying a specific competitor is critical in today’s chaotic environment. Here are three reasons why.

1. Clarify your brand

Naming the competitor helps set up the comparisons that separate the two brands. Imagine Ruby Tuesday’s, currently in a quagmire choosing one competitor to go head to head with. In that case, an honest assessment of their own brand and the chosen competitor would show them their competitive advantage. Instead, the brand is wavering as it attempts to rebuild its offering around a salad bar to fight off all of Fast Casual and Casual Dining.

If we all believe in the adage ‘you can’t be all things to all people’ surely we see the folly in engaging all other brands as competition.

It’s clear that Ruby Tuesday’s suffers from consumers not knowing how to use the brand. It’s pretty clear that the brand also doesn’t understand itself. Taking on the entirety of two categories at once, is a dangerous move. Especially with so much on the line. The brand isn’t able to focus on its strengths and discard anything. This course of action prevents the brand from being honest with itself in order to ‘defend’ against multiple brand positions. If we all believe in the adage ‘you can’t be all things to all people’ surely we see the folly in engaging all other brands as competition.

By choosing a singular competitor, they would be able to clearly define their own brand and rebuild their operation around the strengths.

2. Take better odds

Even ignoring the obvious need to focus on your own brand, there’s something else. Just choosing one initial competitor dramatically brings down the odds in your battle. Taking on 50 other brands is a huge challenge, focusing on one makes the competition achievable and plots a course for actionable steps. Better to choose one competitor – one that represents a major trend – and focus on stealing share from that single source.

A focused opponent puts a name to the challenge and presents something achievable. While a bet on our brand versus the field is overwhelming. This doesn’t mean the competitor of focus cannot change over time. Growing brands should focus on other brands of their size and with success that will change over time to reflect increase in number of locations, customers and sales. Taco John’s focus is on super regional brands today, but took on local competitors and smaller scale brands earlier in its history.

3. Efficiency

Finally, preparing your brand to steal from one challenging competitor allows you to shape your operation more efficiently. For example, the competitor has an advantage with a particular specialty dish such as a fish appetizer. Your team can understand that dish in relation to your customers, operations, and service and plan accordingly for a competitive product.

This can also be tested in locations where results can be observed head-to-head. Any variable will be more simply edited and tested against that single rival.

All of this logic may sound simple. Especially from the outside. It’s easy to point out brands that may be framing too wide a competitive set. But the brands that are truly engaging in focused competition are equally easy to spot. They’re typically the brands that are growing.