During the same time period McDonalds stumbled and still cannot find footing to frame a recovery, Denny’s has become a brand sensation – among Millennials.
As a result, Denny’s is doing phenomenally well financially. In their latest financial report (second quarter, July 1st 2015), U.S. system-wide same-store sales growth was 7.3 percent. That is more than double same-store industry sales growth of 3.2 percent for the same period.
How did this happen? Drumroll for the secret sauce:
1) LOTS of research: Like most companies, Denny’s knew very little about Millennials, their needs and wants relative to Denny’s brand or industry,
2) Bend your brand to the new customer (as the next story in this newsletter shows, being “brand rigid” can kill your company),
3) Apply what you know in a creative manner,
4) Track results (financial AND experiential) and iterate on successes!
There it is. THE secret sauce for success with today’s customer.
I know, I know, we all wish the “secret” was something, anything else. Something easy that you can buy off some online marketing guru for $199 + tax. His or her latest marketing success formula, plug in and it just works.
Yet, the fundamentals for business success remain and are even MORE effective than they used to be. You still have to do the research and then act creatively on what you know. And then, you have to keep changing to make what works, work even better!
All lessons McDonald’s may eventually learn.
In the decade ending with 2010, Denny’s was watching a decline in sales among its targeted consumer: the Baby Boomers and mature generations. They were seeing the exact same thing McDonald’s saw during the same time period.
However, rather than fighting to hang on to what they had, Denny’s studied the marketplace extensively, retrenched in response to their newfound knowledge, and re-emerged with new focus and brand image.
Actions that Drove Results:
In 2010, Denny’s ran a Super Bowl ad offering free breakfast for everyone in America and introduced a value menu to clearly state their price strategy. That was just the beginning though.
Leadership realized the brand needed more emotion and relevance to really turn the corner for the future. They HAD to get the elusive Millennial to show up and then return consistently to their restaurants.
Denny’s leadership implemented the following based on their newfound knowledge (again, from extensive research) and drove market success:
1) Focus on food “value.”
Through improved and enhanced sourcing and menu item configuration, food product quality increased while remaining very competitive pricewise.
2) Employee delivery of meaningful service.
Once the “I will get to you when I can because you are one of 20 to 30 other tables I am serving at the same time” restaurant. A moniker Denny’s wore with pride through the past decades. Now, with scheduling and service management structure changes, employees deliver significantly better service to diners.
3) Ambiance and atmosphere changes rolled out slowly initially, but now fully completed in over 25% of the entire restaurant system.
4) Aggressive, irreverent and continuous social media blitz targeted specifically at Millennials.
Denny’s continuously utilizes multiple social media channels, and jumps on current pop culture trends to deliver a brand flavor that has become a thing of notoriety – among Millennials. When reviewing their efforts you clearly see HOW they embrace the fact Millennials respond to more liberal, positive tones rather than orderly and opinionated tones produced by many other brands.
5) Web series creation resulting in “engaging brand moments.”
Again targeted specifically at Millennials and distributed in a manner to which only they respond. In a riff off the “Always Open” campaign, which through traditional channels is edgy but remains inoffensive, the web series pushes the envelope to reflect Millennials responsiveness to more provocative messaging. This series contains entertaining and relevant content (to Millennials) while only briefly mentioning the restaurant product.
6) Targeted story dissemination.
Rather than blasting away at everyone in hope to reach Millennials, Denny’s targeted their story. They focused on an oft overlooked Millennial component through their Latino Facebook page and changed the messaging to fit that persona. Again, driven by research.
The web series became a Millennial culture movement because of targeting. This was accomplished by releasing it through collegehumor.com and relying on celebrities to raise awareness through tweets to, in some cases, millions of fans. Again, playing on the importance of Millennial celebrities to build a product story and because of the extensive new knowledge base they had from research.
7) Continuous satisfaction scoring and research keeps the entire engine moving forward.
Millennials are more influenced by others opinions than any generation in history. Just a fact. Denny’s watches results from numerous methods of diner satisfaction evaluations, as do many other companies.
However, rather than just being a number (i.e. Net Promoter Score) reviewed by a bunch of old white guys sitting around a board room table, Denny’s uses results of its feedback programs in what I call “living” ways. Meaningful criticisms are organized and prioritized for evaluation as potential product, service or ambiance enhancements. Pertinent quotes about products, experiences or people are repurposed within the social media story telling machine.
Feedback is continuous, multi-method, and engaging. Results from it fuels messaging, communications and product and service delivery enhancements.
Question: Where do you see similarities between Denny’s approach and your company? What are some areas you see could be improved?