How do you build a word-of-mouth following for your product or service? That's one challenge most companies would love to wrestle with, but few do.
California's fast-food chain In-N-Out Burger is an exception, with a famously devoted customer base that inspires envy throughout the industry—and brand recognition well beyond its geographic reach. But instead of pouring hundreds of millions of dollars into ad campaigns like rivals Burger King (BKC) and McDonald's (MCD), In-N-Out relies mainly on its carefully located stores, billboards, bumper stickers, T-shirts, and its own rabid fans to broadcast its message.
In this excerpt from her new book, In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules BusinessWeek writer Stacy Perman shows how the chain's marketing strategy works.
This excerpt tracks how Rich Snyder, son of founders Esther and Harry Snyder, expanded the chain, focusing closely on the quality of the food—and the staff—before he was killed in a plane crash in 1993.
Rich Snyder was 24 when he became president of In-N-Out Burger after his father, Harry, died in 1976. He shared Harry's belief that running a successful fast-food business wasn't about cutting corners or using the right equipment. What it boiled down to was the people on the front lines.
Where the two differed, however, was that Harry had hoped his "associates," as he and Esther insisted on calling employees, would work hard, save money, and leave. Rich had another idea: "Why let good people move on when you can use them to help your company grow?" Rich also wanted to establish a much bigger footprint for In-N-Out Burger.
There was another difference between father and son: Rich was a born-again Christian. In the 1980s he began printing biblical references on cups and burger wrappers, and then he went further, commissioning a Christmastime radio commercial that asked listeners to let Jesus into their lives, alongside In-N-Out's jingle. Many stations refused to run the ads, and Californians showered the company with complaints. Rich essentially shrugged off the reaction. The Bible chapter-and-verse references remain to this day, and radio ads commingled with evangelism still crop up.
But on issues of quality, Rich remained his father's son. In 1984, in Baldwin Park, Calif., he set up In-N-Out University, a training facility, with the aim of filling the pipeline with qualified managers and reinforcing the company's focus on quality, cleanliness, and service. About 80% of In-N-Out's store managers started at the very bottom, picking up trash before rising through the ranks. Rich realized that if he wanted to expand, he needed to put a system in place that would professionalize management.
To attend In-N-Out University, an associate usually had to have worked full-time at a store for a year. In that time, she had to demonstrate initiative, strong decision-making ability, and impressive people skills. A cornerstone of In-N-Out's limited growth strategy was to expand only as quickly as the management roster would allow. At the university Rich came up with a number of ideas to hone the training process. For instance, a team of field specialists was deployed to motivate and instruct associates. Inspired by pro sports teams, Rich began producing a series of training films and videotaped trainees to critique their performance.
Although the work could be dreary—imagine a four-hour shift spent cleaning up spilled milk shakes—associates were made to feel part of an important enterprise and given opportunities to advance. On-the-job training was wedged in between mealtime rushes, and everyone was given large helpings of feedback. Rich wanted each associate to understand his job and how he could do it better. The result was that many part-timers came for a summer job and stayed for a career.
Despite some flickers of media attention since its founding in 1948, nothing gave press-shy In-N-Out more publicity than its own longtime customers. Staying simple and remaining focused on its core values had allowed In-N-Out to stay true to its loyal fan base. And it was precisely those customers who often did the heavy lifting, frequently boasting about their zealous affection for the chain to everybody else. Regulars engaged in an ongoing contest, trying to outdo each other on how many hamburgers they could eat at any one time. Some regulars also assumed the responsibility of bringing in a constant stream of new devotees, an act generally referred to as "the conversion."
INFURIATING ADVICE
Rich thought of his job as the point at the bottom of an inverted triangle. He was there to support everyone in the company. When talking to store managers, he was always careful to refer to the shops as "your stores," hoping this would help instill a sense of ownership.
At one point when Rich was planning the expansion drive, he sought the advice of a food industry consultant. The expert told Rich that if he slashed salaries, In-N-Out could save a "ton of money." This infuriated Rich. Recounting the story, he said it was exactly the kind of advice one would expect "from a guy who wears a suit and who thinks you don't pay a guy who cooks hamburgers that much money."
From its start, In-N-Out paid employees more than the going rate. (Associates always made at least $2 to $3 above minimum wage.) As of February 2008, In-N-Out was paying new part-time associates $10 an hour—just 51 cents less than full-time workers at Wal-Mart (WMT), whose $375 billion in annual sales is about 1,000 times greater than In-N-Out's. Store managers at In-N-Out make at least $100,000 a year and are eligible for monthly bonuses tied to store sales.
Rich also established an expansive set of benefits, including 401(k) plans, paid vacation for part-timers, and health, dental, and vision plans for full-time workers. Each year, he put on companywide picnics and a gala dinner. Managers who met their goals were sent on trips with their spouses, often to Europe in first-class seats. For a Christmas outing to a performance of The Nutcracker, Rich insisted that his managers wear tuxedos. He thought they stood shoulder to shoulder with any blue-chip manager and wanted them to feel that way, too.
The upshot of treating its employees with special care is that In-N-Out boasts one of the lowest turnover rates in the business. Industrywide, only about half of all fast-food workers stay beyond a year. And the numbers plummet to just 25% at two years and 12% at three. In In-N-Out's case, managers' typical tenure is 14 years, while part-time associates remain, on average, for two.
To this day, the corporate culture inspired by Harry and Esther and carved in stone by Rich stands in stark contrast to rivals' systems of low-paid burger flippers and cashiers who don their disposable hats for what society has deemed McJobs. And it never drove up prices or pushed down quality.
A Double-Double, Twice
At the same time, without corporate solicitation, a roster of celebrity names regularly endorsed the chain. "When I first joined the band, we must have eaten there at least three days a week," recalled rocker Sammy Hagar, who signed up as the front man for Van Halen in 1985. "We were in the studio recording 5150, and we'd send someone to go get food, and we'd talk about sushi or pizza and always end up with In-N-Out." Gordon Ramsay, the British celebrity chef with 12 Michelin stars, global fame, and profanity-laced rants, once admitted to sitting down for a Double-Double and then "minutes later I drove back 'round and got the same thing again to take away." PGA golf champ Phil Mickelson mentioned the chain so often that whenever he fell into a losing streak, sportswriters began suggesting that he cut back on the Double-Doubles.
Before long, tourists got wind of In-N-Out Burger and began making their own pilgrimages to what was considered the quintessential Southern California attraction. Fans passed the "secret menu" on to one another and described the sublime pleasures of tucking into an Animal Style cheeseburger. Vegetarians talked up the chain's off-menu Grilled Cheese. Expatriate Californians pined for their favorite burger, and In-N-Out T-shirts were the epitome of cool. Analysts spoke of In-N-Out's "uncopyable advantage," while everybody else talked about its unparalleled cult following. According to William Martin, who devised the training curriculum for In-N-Out University, the Snyders and the rest of the chain's highest echelon were definitely conscious of the mystique that had developed around In-N-Out. "They were all aware of it, and they loved it," he said. "But they had no explanation for it." That didn't mean, however, that they didn't know how use it.
Website : http://www.in-n-out.com/
28.4.09
Peugeot::: Nude |308 CC
In a cheeky bit of naked ambition, French automaker Peugeot inundated London's morning commuters today with a pool of 308 'nude' actors who appeared to only be wearing scarves. What was the reason for the au natural display? Why, to celebrate the arrival of the company's latest topless model, the 308 Coupe Cabriolet.
Upon closer inspection, it turns out that the flesh flash mob was actually outfitted in form-fitting body-colored suits, thus preventing the local authorities getting rude with the nudes.
Upon closer inspection, it turns out that the flesh flash mob was actually outfitted in form-fitting body-colored suits, thus preventing the local authorities getting rude with the nudes.
Orange:::Chabal needs your help
BRAND OWNER:France Telecom
CATEGORY:Telecoms/ Mobile
REGION:France
DATE:Nov 2008 - Dec 2007
Orange wanted to increase the number of customers watching football matches on their mobile phone on Orange TV with the launch of Orange Ligue 1, a service that made the main French football championships available on mobile.
Orange selected French iconic rugby player Sebastien Chabal to star in an interactive campaign. Visitors to a site, http://www.chabal-le-duel.com/, could sign up their friends or themselves, entering in their name, address and mobile number. The webuser then receives a phone call on his mobile when he is looking at a video of Chabal preparing to kick a football into goal. The voice at the end of the phone is Chabal himself, asking them where to kick the football. They can pick one of several locations on the goal to aim for and must press a corresponding mobile phone key to instruct Chabal to shoot. When he shoots he gets a goal and then Chabal lifts his shirt to reveal the name of the webs user written on his under shirt, saying “This goal is dedicated for X”. At the end, the person is asked whether they are a customer or not and can then apply for the offer from Orange.
In 10 days, with no advertising, Orange had 1 million unique visitors on the web site.
CATEGORY:Telecoms/ Mobile
REGION:France
DATE:Nov 2008 - Dec 2007
Orange wanted to increase the number of customers watching football matches on their mobile phone on Orange TV with the launch of Orange Ligue 1, a service that made the main French football championships available on mobile.
Orange selected French iconic rugby player Sebastien Chabal to star in an interactive campaign. Visitors to a site, http://www.chabal-le-duel.com/, could sign up their friends or themselves, entering in their name, address and mobile number. The webuser then receives a phone call on his mobile when he is looking at a video of Chabal preparing to kick a football into goal. The voice at the end of the phone is Chabal himself, asking them where to kick the football. They can pick one of several locations on the goal to aim for and must press a corresponding mobile phone key to instruct Chabal to shoot. When he shoots he gets a goal and then Chabal lifts his shirt to reveal the name of the webs user written on his under shirt, saying “This goal is dedicated for X”. At the end, the person is asked whether they are a customer or not and can then apply for the offer from Orange.
In 10 days, with no advertising, Orange had 1 million unique visitors on the web site.
27.4.09
OVK :::Let it ring
BRAND OWNER:OVK
CATEGORY:Charities
REGION:Belgium
DATE:Apr 2009 - Dec 2008
CATEGORY:Charities
REGION:Belgium
DATE:Apr 2009 - Dec 2008
Most people know that using your mobile phone while driving can cause accidents, and a large number of accidents could be avoided if people didn’t answer their mobile phones while driving. A charity for parents of child road victims, OVK, wanted to hammer home the dangers of speaking on your phone while driving in a surprising way.
OVK created a website letitring.be where people could enter their friend’s mobile number and email address. The friend would then receive an email containing a link to a Belgium’s largest video portal Garage TV video and a message saying “check out this crazy car crash I found on the web (be sure to put your sound up loud)”. When the friend clicks on the link, the Garage TV video opens in his browser.
The friend thinks they are about to see a user-generated car crash movie on a video website. The video shows a driver’s view of a car journey, with the camera looking through the windscreen at the road. While the person is watching the video, their phone will start to ring at a crucial moment in the video. As soon as they answer the phone, the car in the video loses control and crashes. Then the message appears on the screen saying: “avoid an accident. Let it ring.” They are then given the option to pass the viral prank on with the website’s details. This was supported by a separate campaign aimed at young people who listen to their MP3 players in traffic. Teaming up with popular musicians Sioen, Joshua and Sound of Stereo they created tracks that could be freely downloaded. They songs start as normal, but halfway through you hear the screeching sounds of car tyres and a crashing sound, followed by the brand message.OVK created a website letitring.be where people could enter their friend’s mobile number and email address. The friend would then receive an email containing a link to a Belgium’s largest video portal Garage TV video and a message saying “check out this crazy car crash I found on the web (be sure to put your sound up loud)”. When the friend clicks on the link, the Garage TV video opens in his browser.
Amstel ::: Truck vrachtwagen
Nothing is allowed to slow the progress of an Amstel delivery truck on its rounds. The truck is allowed an exclusive lane on the motorway, it takes precedence on a car ferry, and hundreds of marathon runners are forced to wait while it passes. Traffic cops turn a blind eye while the truck speeds past. A young man learning to drive is astonished when his instructor slams on the breaks, even though he has right of way. But nothing comes before Amstel, that Dutch national treasure.
Language: Dutch,
Length: 45"
Agency: Doom & Dickson Amsterdam
Production house: Bonkers
Language: Dutch,
Length: 45"
Agency: Doom & Dickson Amsterdam
Production house: Bonkers
Can Brand Loyalty Be Bought? - how susceptible are consumers to loyalty programs?
The classic brand loyalty program offers a combination of rewards and recognition. The bottom-line objective of the program, however, is retention—to ensure that a customer continues to purchase a product or service and remains loyal to that particular brand.
First airlines, and then hotels, used loyalty programs to offer incentives to frequent travelers, but today brand loyalty programs are just as common in financial services and retail.
One of the fastest-growing brand loyalty markets is financial services. Credit card companies in particular have adopted the rewards model with increasing frequency. In some cases a credit card will be linked with a specific airline; in other cases, the credit card rewards its “members” with miles that can be used on any airline. Some credit cards also offer merchandise, cash back or other incentives that build up with credit card use. Some even promise customers they can get preferred seating at events or restaurants.
Brand loyalty is big business. More than 1.8 billion memberships exist in US loyalty programs, averaging 14 memberships per household, according to 2009 research conducted by COLLOQUY, a leading provider of loyalty marketing, publishing education and research.
COLLOQUY estimates about 44 percent of these memberships are “active.” Among the general US population, 57 percent of respondents claim to belong to a loyalty marketing program. This compares to 86 percent of Canadian consumers who participate in loyalty programs, according to another research study conducted by COLLOQUY in late 2007.
But do these programs work? Kelly Hlavinka, partner of COLLOQUY, tells : “From the results of our clients’ programs, loyalty programs are indeed effective at 1)increasing visit frequency, 2)increasing the amount spent annually and 3)retaining customers.
The current economic environment may heighten the importance of a company’s loyalty program.
For the consumer, participating in a loyalty program can help them stretch their limited budget a little bit further. For the company, retaining your best customers that have enrolled in your loyalty program is more important than ever.”
For hotels, loyalty programs seem to be paying off. Jill Noblett, senior vice president of loyalty and direct marketing for Wyndham Hotel Group, discussed the chain’s loyalty program at a “Loyalty Leaders” session at the Direct Marketing Association Conference in October 2008. She says the chain works “to deliver the message that points earned are an enabler.
You can take that vacation or visit one of our fabulous resorts with your expenses covered by redeeming points. What guests earn during their stays also provides them benefits—like a Home Depot gift certificate to use to fix up the kitchen—long after they return home.” Noblett says, “we’ve seen a correlation between redemption and repeat stays.”
For retailers, buying brand loyalty may be more of a challenge. The research conducted by COLLOQUY “suggests that typical two-tier pricing and discount-based rewards—the model that dominates high-frequency retail environments—simply don’t engage consumers,” the company says. “The retail discount reward is now a commodity.”
Aubyn Thomas, senior vice president of marketing services for credit and loyalty for Macy’s, also spoke at the aforementioned Loyalty Leaders session. “Because consumers are very selective in what they buy, we’re relying far more heavily on our Star Rewards program today than ever before,” she says.
The economic environment makes it especially challenging for retailers to reward customers appropriately. As a result, Thomas says, “…we’re turning to less-costly experiential ways of reinforcing customer relationships. So instead of thinking only about discounts and coupons… we’re now thinking about experiences. For example, an experiential reward might be first-class travel to see the Macy’s Thanksgiving Day Parade in person.”
While brand loyalty programs are designed to reward customers with tangible benefits, there is also a “softer” side to customer engagement. “The key to sustaining positive results from loyalty programs is a blend of economic and emotional rewards,” says COLLOQUY’s Hlavinka. “Smart companies strive to move beyond simple economic incentives to incorporate meaningful recognition benefits.”
Wyndham Hotels’ “ByRequest” program is an example of this recognition. “It’s high touch and provides guests with a personalized experience on property,” Noblett says. “ByRequest members can complete an online profile and tell us, ‘I want a certain type of pillow,’ ‘I want a snack and beverage in my room when I arrive,’ ‘I want a certain number of hangers in my closet.’ A manager on property welcomes ByRequest members and ensures that their preferences are met. How nice for a business traveler… to be able to check into a Wyndham and get that kind of special treatment.”
Still, a significant percentage of consumers do not participate in loyalty programs. As reasons for their lack of participation, they cite such economic factors as the need to spend too much and not wanting to pay a program fee, according to COLLOQUY’s research.
There are other non-financial demotivators that brand marketers need to understand. Consumers cited “boring rewards” and the feeling that “all loyalty programs look alike” as reasons for not belonging to a loyalty program. Additionally, there was a high percentage of what COLLOQUY refers to as “category churners—people who had previously played the game and dropped out.” According to the company, “While dropping out of a program is a common consumer experience, the number of consumers churning from the entire category of loyalty programs should raise alarms for loyalty marketers. Clearly, we’re not doing enough to keep customers engaged.”
All audience segments offered as a primary reason for non-participation the “lack of compelling rewards.” Almost half of non-belongers said loyalty programs look too similar. A third issue is the amount of churn: it appears that, regardless of audience segment, people join and then drop out of loyalty programs in relatively high numbers.
Those disappearing high numbers represent lost brand engagement opportunities—a high price for brands to pay in such challenging economic times.
First airlines, and then hotels, used loyalty programs to offer incentives to frequent travelers, but today brand loyalty programs are just as common in financial services and retail.
One of the fastest-growing brand loyalty markets is financial services. Credit card companies in particular have adopted the rewards model with increasing frequency. In some cases a credit card will be linked with a specific airline; in other cases, the credit card rewards its “members” with miles that can be used on any airline. Some credit cards also offer merchandise, cash back or other incentives that build up with credit card use. Some even promise customers they can get preferred seating at events or restaurants.
Brand loyalty is big business. More than 1.8 billion memberships exist in US loyalty programs, averaging 14 memberships per household, according to 2009 research conducted by COLLOQUY, a leading provider of loyalty marketing, publishing education and research.
COLLOQUY estimates about 44 percent of these memberships are “active.” Among the general US population, 57 percent of respondents claim to belong to a loyalty marketing program. This compares to 86 percent of Canadian consumers who participate in loyalty programs, according to another research study conducted by COLLOQUY in late 2007.
But do these programs work? Kelly Hlavinka, partner of COLLOQUY, tells : “From the results of our clients’ programs, loyalty programs are indeed effective at 1)increasing visit frequency, 2)increasing the amount spent annually and 3)retaining customers.
The current economic environment may heighten the importance of a company’s loyalty program.
For the consumer, participating in a loyalty program can help them stretch their limited budget a little bit further. For the company, retaining your best customers that have enrolled in your loyalty program is more important than ever.”
For hotels, loyalty programs seem to be paying off. Jill Noblett, senior vice president of loyalty and direct marketing for Wyndham Hotel Group, discussed the chain’s loyalty program at a “Loyalty Leaders” session at the Direct Marketing Association Conference in October 2008. She says the chain works “to deliver the message that points earned are an enabler.
You can take that vacation or visit one of our fabulous resorts with your expenses covered by redeeming points. What guests earn during their stays also provides them benefits—like a Home Depot gift certificate to use to fix up the kitchen—long after they return home.” Noblett says, “we’ve seen a correlation between redemption and repeat stays.”
For retailers, buying brand loyalty may be more of a challenge. The research conducted by COLLOQUY “suggests that typical two-tier pricing and discount-based rewards—the model that dominates high-frequency retail environments—simply don’t engage consumers,” the company says. “The retail discount reward is now a commodity.”
Aubyn Thomas, senior vice president of marketing services for credit and loyalty for Macy’s, also spoke at the aforementioned Loyalty Leaders session. “Because consumers are very selective in what they buy, we’re relying far more heavily on our Star Rewards program today than ever before,” she says.
The economic environment makes it especially challenging for retailers to reward customers appropriately. As a result, Thomas says, “…we’re turning to less-costly experiential ways of reinforcing customer relationships. So instead of thinking only about discounts and coupons… we’re now thinking about experiences. For example, an experiential reward might be first-class travel to see the Macy’s Thanksgiving Day Parade in person.”
While brand loyalty programs are designed to reward customers with tangible benefits, there is also a “softer” side to customer engagement. “The key to sustaining positive results from loyalty programs is a blend of economic and emotional rewards,” says COLLOQUY’s Hlavinka. “Smart companies strive to move beyond simple economic incentives to incorporate meaningful recognition benefits.”
Wyndham Hotels’ “ByRequest” program is an example of this recognition. “It’s high touch and provides guests with a personalized experience on property,” Noblett says. “ByRequest members can complete an online profile and tell us, ‘I want a certain type of pillow,’ ‘I want a snack and beverage in my room when I arrive,’ ‘I want a certain number of hangers in my closet.’ A manager on property welcomes ByRequest members and ensures that their preferences are met. How nice for a business traveler… to be able to check into a Wyndham and get that kind of special treatment.”
Still, a significant percentage of consumers do not participate in loyalty programs. As reasons for their lack of participation, they cite such economic factors as the need to spend too much and not wanting to pay a program fee, according to COLLOQUY’s research.
There are other non-financial demotivators that brand marketers need to understand. Consumers cited “boring rewards” and the feeling that “all loyalty programs look alike” as reasons for not belonging to a loyalty program. Additionally, there was a high percentage of what COLLOQUY refers to as “category churners—people who had previously played the game and dropped out.” According to the company, “While dropping out of a program is a common consumer experience, the number of consumers churning from the entire category of loyalty programs should raise alarms for loyalty marketers. Clearly, we’re not doing enough to keep customers engaged.”
All audience segments offered as a primary reason for non-participation the “lack of compelling rewards.” Almost half of non-belongers said loyalty programs look too similar. A third issue is the amount of churn: it appears that, regardless of audience segment, people join and then drop out of loyalty programs in relatively high numbers.
Those disappearing high numbers represent lost brand engagement opportunities—a high price for brands to pay in such challenging economic times.
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