The restaurants industry is experiencing a dramatic change in the formula for winning customers where selling good food at competitive prices is growing sales and profits. For example, Chipotle is growing sales at over a 20% annual rate with a same store sales growth rate of 8% that is remarkable in our current slow growth economy. McDonald’s, the company most associated with Super Size Me marketing promotions, has made quantum leaps in moving their menu toward good food. McDonald’s is now the single largest purchaser of apples in the United States. They have re-engineered their food recipes to reduce salt content by over 11%. Today over 80% of McDonald’s menu items are under 400 calories and they are now listing calories for all their menu items.
Chipotle’s Secret Sauce For Winning Customers
Ultimately people want to eat food that tastes good sold at a competitive price from a convenient and enjoyable location. That is Chipotle’s strategy. The following are some of their key best practices that every restaurant can use to win customers:
Win A “Sticky” Green Customers. Chipotle has a very clear understanding that the core customer they want to win is the health conscious consumer. Whether they are labeled LOHAS consumers (Life Style Of The Healthy And Sustainable) or Super Greenies these consumers are know in economics as “sticky” because they are loyal to a business even in the face of competing price promotions. In fact, these sticky customers will often pay more for products that align with their values. Market research by Catalina found that only 1.5% of consumers account for 80% of new product purchases. Capturing the health consensus, values-driven consumer looking for affordable good food was how Chipotle won their sticky customers. This same opportunity is available to all restaurants and is a proven path for protecting your revenues from competitor’s promoting $1 menu items.
Align Value With Values Price Strategy. Price is the number one food concern among American consumers. But health is the number two American food concern finishing a close second to price. What Chipotle figured out was there is a huge business growth opportunity for offering good food at affordable prices. They don’t compete against $1 menu promotions. But their prices are very competitive for the quality of food they sell. They are winning double-digit revenue growth by mass merchandising what only a few years ago was considered specialty health foods sold at premium restaurants and grocers. Their pricing and products align with the customer’s search for value and values.
Enable Customers To Sell For You. Mass advertising and brand messaging is being displaced by consumers posting their experiences with a product and business. Chipotle does comparatively little advertising. They do a lot of messaging through in store postings and on their restaurant bags. They have won awards for video that was truly outside the marketing box for the food industry but that went viral with their customers and potential customers. Chipotle is making it easy for their customers to share the Chipotle message about food and environmental health to potential new customers by equipping them with a clear and genuine message on who they are and what they sell.
Hire Great People Focused Upon Satisfying The Customer. My first experience at Chipotle exemplifies their success. I was taken there by my Millennial Generation son. The very fact this was my path to my first Chipotle experience represents their success in winning market share with the Millennial Generation by aligning with the Millennials’ search for value and values. But what cemented my positive impression of Chipotel were the people serving the food. I asked for guacamole. I was told it cost extra. That was disappointing because I thought it would come with my burrito. But the Chipotle work associate never missed a beat. She immediately gave me the guacamole as a first time customer courtesy offering. Imagine getting that type of response from the typical fast food work associate. From my experience in working with companies that are adopting sustainable best practices I can confirm that empowering people to think and do is very green and profitable.
Exclusive Video Interview On Chipotle’s Green Business Best Practices
In this exclusive video interview conducted at Sustainable Brands 2012 of Chris Arnold Chipotle Communications Director profiles their best business practices for delivering quality food at competitive prices that are achieving double digit revenue growth results:
Bill Roth is the Founder of Earth 2017 He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.