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.

 

 

NPS scores don’t lie: nobody loves your brand.

Tucked in an innocuous Pollfish survey about consumer attitudes on Valentine’s Day was something a bit sinister. You’ll have to scroll a bit to find it. An NPS (Net Promoter Score) question about top casual dining brands added to the survey shows lukewarm reception to all of the options.

The top performing result was Red Lobster, receiving a just barely positive NPS score of 1. To be fair, the question was highly specific “How likely are you to recommend eating at this national chain restaurant for Valentine’s Day to a friend or colleague?” But for the most common and accessible (and highly branded) chains, scores this low are troubling.

Ok, this question is flawed, making true conclusion on NPS for these brands a stretch. For the purpose of argument, tell me if anyone is surprised that these brands scored so low. People don’t love these brands. People don’t love most brands. Brands exist to meet a customer need. But rare brands transcend that moment of need to become something uniquely desired or loved.

The NPS of a brand is a simple (albeit imperfect) way to measure this love. Low scores, even above average scores indicate some level of shame in using the brand. Low scores indicate a lack of willingness to tell others about a visited to the brand. This also indicates brands with declining traffic. Only top scores indicate the kind of love your advertising agency predicts their latest idea will generate: brand evangelism. But it won’t.

Here’s what does. Distinctive elements of service combined with unique food and drink – delivered in a way that indicates to a customer that your brand understands them. Fast casual brands quickly earned favorability by addressing an insight into casual dining customers. That is, faster but not worse. Cheaper, but not microwaved. They earned love (recommendation level love) by caring about customers. But not all fast casual brands achieved it. Only the best ones.

Most brands lack the brand awareness, favorability and resources of the brands included on the poll.

Arguably, the poll in question is a who’s who of the best in casual dining. Red Lobster, Olive Garden, Outback Steakhouse, The Cheesecake Factory, TGI Friday’s. Most surprising here is the poor NPS performance of The Cheesecake Factory, always a top performer in food quality and service. But have they or the others met changing expectations and demands of dining customers?

They’re mostly innovating inside what they consider their moat. They consider the table side experience and length of the meal to be a strength or at least a differentiator. To build on that, they’ve added offers like all-you-can-eat appetizers or even buy one, get one to go entrees. If the food is considered average, how will more of it make them above average? They’ve added kiosks or other touches to make their experience feel more digital.

They may have missed. The moat for casual dining is service. Making guests feel special, demonstrating appreciation for their business. All of the brands mentioned here have extensive recruiting and training programs, to be certain. But if the new wave of competition (fast casuals) is focused on speed and food innovation, casual dining can immediately differentiate with person-to-person interaction at the table. For casual dining brands, the space to win is hospitality. Technology can work only if it improves hospitality.

Most brands lack the brand awareness, favorability and resources of the brands included on the poll. With this collection scoring as it did, how would the rest of the casual dining field fare?