10 Lessons Chipotle Must Learn From Jack In The Box and Taco Bell
To recover, troubled fast-food chain Chipotle might want to learn some of the lessons of its competitors.
Photo by Kurt McKee via Flickr Creative Commons (cropped)
Last week, Chipotle revealed its marketing plan to regain consumer loyalty after hundreds of diners across 15 states became ill from E. coli and norovirus contaminations in late 2015. According to a report at the Restaurant Business website, the recovery strategy is as follows:
In addition to direct mail pieces, newspaper ads and television commercials intended to reassure the public the brand is safe again, the effort calls for doubling the amount of food that stores can give away to spur trial, the officials noted.
Wow, that sounds really boring. Hopefully the actual marketing will be more interesting. Ironically, it may have been Chipotle’s commitment to fresh produce that got it into trouble in the first place, as described in an Associated Press report by industry writer Candice Choi:
Chipotle Mexican Grill Inc. may be suffering from traits that helped define it. In its annual report in February, the Denver company noted it may be at a higher risk for foodborne illnesses because of its use of "fresh produce and meats rather than frozen," and its traditional cooking methods," rather than "automation."
Chipotle is not the first fast-food chain needing to right the ship after finding itself in dire straights. Fortunately for Chipotle, there are big, existing case studies thanks to the fact that both Taco Bell and Jack In The Box have already been there — and they've not only survived, but have thrived.
Taco Bell was implicated in hundreds of salmonella and E. coli cases over the past decade. Most occurred in 2006 and 2010. Some of the victims even had kidney failure as a result. In 1993, four children died from E. coli poisoning traced back to undercooked Jack In The Box beef patties. A total of 623 people were sickened.
Here's what Chipotle's competitors had to do to get out of trouble and find favor with customers again — some of which Chipotle has already started.
10. Settle the Lawsuits
Jack In The Box spent millions of dollars settling lawsuits, and that pushed parent company Foodmaker to the brink of bankruptcy. Regardless, it’s a necessary step, the right thing to do, and Chipotle had better do it sooner rather than later to allow the chain to leave its bad publicity behind. For that matter, having a bunch of victims around saying the company didn't try to make things right will continue to generate negative publicity and refresh the public's memory of the scandal.
9. Talk About the Problems — But Not for Too Long
In 2011, a class action lawsuit was filed against Taco Bell by Alabama law firm Beasley Allen that alleged the ground beef blend used by the chain contained only 35 percent beef. The suit was later dropped after Taco Bell went public with its ground beef ingredients, showing its blend was 88 percent beef. Not content to leave good enough alone, Taco Bell took a pointless public victory lap by running an ad in major newspapers across the country that said, “Would it kill you to say you’re sorry?”
That was a bad move, according to Atlanta marketer Laura Ries, who was quoted in an AP report as saying it did nothing more than to revive “memories of a suit that the majority of the public had forgotten after the initial burst of publicity.”
Chipotle’s co-CEO Steve Ells spent a lot of December 2015 on an “apology tour,” but assuming there are no more food poisoning outbreaks, it’s time for him to get out of the public eye and down to business.
8. Figure Out What’s Wrong and Fix It
That leads us to the next step, and there are two problems Chipotle will need to attack. The first, of course, is addressing what caused the food poisoning and making sure it doesn’t happen again. According to an Associated Press article, these are the specific steps Chipotle is taking:
- Cheese will now arrive in restaurants shredded.
- Ingredients such as onions will be macerated with lemon or lime juice to kill germs.
- Sixty samples of every 2,000 pounds of steak will be tested before it's sent to stores. A similar testing program will be implemented for chicken in coming weeks. Pork and barbacoa beef are already delivered cooked in sealed bags.
- Tomatoes, cilantro and other ingredients will be chopped in centralized locations, rather than in stores, so they can be tested. Onions will still be chopped in restaurants, along with lemons, limes and jalapeños. All will now be blanched to kill germs.
Chipotle is in fact shutting down all its stores for three hours on February 8 for a system-wide food safety training session. On one side, pundits think this is a good idea to demonstrate how serious the company is about fixing the problem. On the other, some believe that while it's laudable, it will extend the problem in the public's memory even longer. (See item No. 9, above.)
There’s another issue that Chipotle will need to address, and it's the fact that the chain's concept hasn’t been exciting since it opened. In October 2015, before the food poisoning scare was all over the media, Chipotle reported the worst sales growth in two years. The fast Mexican food chain is going to need to do something to pique consumer interest.
Jack In The Box found itself in a similar situation and has had to reinvent itself not once but twice since being founded in San Diego in 1951. By 1980, the company had lost its luster. Its cute, toy-like mascot wasn’t attracting customers anymore — especially when compared to the much cooler Ronald McDonald and his friends, who included a purple, blob-like but friendly monster and a clumsy, burger-loving criminal.
To solve the situation, the company ran an ad in which it literally blew up its mascot.
The slogan became “The Food Is Better at The Box,” and the chain started focusing on food that didn’t compete directly with McDonald’s, including “upper-scale” sandwiches and salads. Unfortunately for Jack In The Box, its troubles got worse before they got better.
7. Rebrand, But Don’t Get Too Crazy With It
The year after Jack In The Box “blew up the clown,” horse meat was discovered at its San Diego processing facility. It had been shipped by Profreeze, an Australian supplier. Jack In The Box claimed it was sure the horse meat never actually made it into its burgers or tacos and says the error was caught at the processing plant. Consumers weren’t necessarily convinced.
Just before that discovery, Australian government inspectors found kangaroo meat labeled for shipping to the United States. The two incidents led to an urban myth that persists to this day that Jack In The Box sells kangaroo meat.
That, coupled with the food poisoning disaster of 1993, meant Jack In The Box desperately needed to reinvent itself yet again.
The company rebranded with something familiar: the Jack mascot, reimagined as a walking, talking, bitter corporate version wearing a suit and tie and with vengeance on his mind.
The introductory commercial that showed Jack blowing up Jack In The Box boardroom was decried as "tone deaf" in the wake of recent bombing incidents both at home and abroad.
Still, Jack In The Box stuck with its guns — or bombs. Corporate Leader Jack is still around to this day.
6. Get Your Fans to Do Your Advertising for You
In a stroke of genius, Jack In The Box started giving antenna balls in the shape of Jack’s head to customers. To date, the company estimates, it has given out 22 million antenna balls. There were even seasonal, sports and holiday-themed ones, many of which are now considered collectors’ items.
This, kids, was pre-Internet viral marketing. For a time, you couldn't park your car without seeing a bunch of Jack heads waving around on antennas. Among advertising strategies, customer dissemination of information about your company is the most valuable. It's why companies give away free, branded items in the first place.
5. Introduce New, Interesting Products
As noted earlier, Chipotle never changes its menu and that’s become boring. Jack In The Box and Taco Bell both constantly introduce new food specials. Right now, for example, Jack In The Box is promoting a "Buttery Jack" burger with herb butter, a "Chipotle Chicken Club" sandwich and a jalapeño bacon breakfast burrito. Taco Bell's new hot item, the Quesalupa, is such a big deal that it's expected to be announced during this year's Super Bowl. It's a quesadilla/chalupa hybrid with a cheese-stuffed shell.
4. Stick With Your Concept
Both Jack In The Box and Taco Bell have stayed true to who they say they are — or, at least, who their customers now think they are. To this day, Jack In The Box sells burgers, but that's not its only focus. It also still promotes salads, breakfast sandwiches and hot appetizers. When the chain does promote burgers, it markets them as higher-quality than those at other burger joints — a move that's occasionally put the fast-food giant in hot water with its competitors.
3. Latch Your Cart Onto Someone Else’s Star
Taco Bell is owned by Yum! Brands, the fast-food division spun off into its own entity by PepsiCo. (That’s why it, along with Kentucky Fried Chicken, Pizza Hut and other companies owned by Yum! Brands, serve only Pepsi, not Coke. Yum Brands! has a lifetime contract with PepsiCo. to sell only that company's sodas.)
It’s been hugely advantageous for cross-branded products that bring in a broader consumer base. The custom Baja Blast variety of Mountain Dew is only available at Taco Bell and one of their most popular food items is the Doritos tacos. It was the merger of Frito-Lay and Pepsi back in 1965 that created PepsiCo. in the first place.
Because they own so many brands, it’s easy for the corporation to use one popular brand (Doritos) to bolster another’s sales and reputation. (Taco Bell). Chipotle, though, might be be able to do something similar. For example, one of the most popular condiments is TABASCO brand Chipotle Pepper Sauce and that seems like a logical cross-branding opportunity.
2. Pick Two: Price, Quality or Speed
As the saying goes, you can have price, quality or speed, but not all three at the same time. Jack In The Box has long sold its food more on the basis of quality and inventive ingredient combinations than price. Conversely, Taco Bell’s food is cheap and fast. Most of it, too, reuses the same ingredients over and over again but in different form factors. Ground beef, chicken, tortillas, lettuce, onions, tomatoes and sour cream are used repeatedly.
Chipotle’s selling point to date has been on quality. Now it will likely need to focus on speed to get customers back in the door. It’s unlikely the chain will be able to sell on price if it is to stick with its concept of using hormone-free, humanely raised meat and quality produce.
1. Understand Who Customers Are and Figure Out How to Reach Them
Taco Bell understands that its primary customer base is young adults. Keeping an easily bored audience engaged is why the company continually works on new product inventions. The Doritos taco was one. The Crunchwrap line, which includes crunchy tortillas or Fritos (conveniently, another PepsiCo product) in a soft tortilla folded into a hexagon, is another.
Conversely, a large group of Chipotle’s customers are young people — a.k.a. “millennials” — who care about authenticity and aren’t going to fall for something too convenient or gimmicky. This is an interesting corner that Chipotle has painted itself into and the one that will require the most creativity to get out of. Traditional advertising is perceived by millennials as gimmicky, so how will the company reach them?
Solving that issue, as well as all the others, is key to Chipotle’s recovery.
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