First it was COVID-19, then it was labor shortages and supply chain issues. Restaurant marketers over the past couple of years have felt the need for rapid communication and agility more so than perhaps any other industry—and those who prioritize digital transformation are weathering the winds of change most successfully.
In this first episode of Vertical Reality: Restaurant, Epsilon’s Armita Ayrempour and Brian Giannone connect with Stacey Floberg, director of marketing at Which Wich Superior Sandwiches, to discuss how restaurant marketers can use digital to ensure they’re consistently putting the guest first with consistent communication around industry shifts, coordinating fluidly between franchises and getting accurate measurement around performance.
Listen to learn how restaurant marketers can up the nimbleness of their efforts in 2022 and beyond.
Transcript:
ARMITA AYREMPOUR: Welcome to the restaurant edition of Vertical Reality. This is a podcast featuring conversations that carve the path forward in restaurant marketing. Offering insights, discussions and recommendations to help all marketers better understand their verticals' reality. Today's conversation is with Stacey Floberg, Director of Marketing at Which Wich. With 25 years in restaurant marketing, Stacey has deep experience in strategizing and executing marketing initiatives at all levels of the industry. Stacey joins Epsilon's Brian Giannone and me, Armita Ayrempour, as we discuss how the pandemic led to a rapid digital shift for restaurant brands, required them to be more nimble than ever, and what learning she's bringing into 2022. We hope you enjoy the conversation, and be sure to visit epsilon.com/restaurants for more information. We have two special guests joining this episode. First, I'd like to introduce Brian Giannone, Vice President of Client Development at Epsilon. So Brian, could you tell us a little bit about yourself?
BRIAN GIANNONE: Hi, Armita, thanks so much for having me. My name is Brian Giannone. I've been at Epsilon Digital Media Solutions for a little over nine years, and over that time, I've worked with a number of different multichannel retailers in various industries. And specifically over the last several years, I've worked primarily with restaurant marketers on their digital strategy, mainly helping them try to find and acquire guests programmatically, thinking about relevant creative that we can deliver, and ultimately closing the loop on sales measurements so they can understand the effectiveness of those ad dollars. So, really looking forward to the conversation today, and, again, thanks for having me.
AYREMPOUR: Great. Thank you, Brian. We are happy to have you here with us today. We're really lucky to have Stacey Floberg, Director of Marketing at Which Wich, here with us. So, Stacey, thanks for being here. Can you share a little bit about your background?
STACEY FLOBERG: Sure. Hi, Armita. Thank you so much for inviting me to join today's discussion. My name is Stacey Floberg. I'm currently the Director of Marketing at Which Wich Superior Sandwiches. I have been in the restaurant industry marketing for brands from QSR all the way up to fine dine for a little over 28 years now. I've also spent some time on the food manufacture and technology side, all serving restaurants or food service accounts.
AYREMPOUR: Great. Thank you, Stacey. So, now that we have both of you here with us, why don't we get started? We've had an interesting industry journey over the past couple of years, the pandemic, shifts to digital and delivery models, supply chain and labor issues, and not to mention a long road to recovery. Can you share how you've been able to adapt through some of these challenges?
FLOBERG: Sure. I think calling it an "interesting journey" makes me laugh because it absolutely has been an interesting journey. The beauty of the restaurant industry and having marketed in this industry is that we are constantly being nimble, but this impact from COVID has really put us to the test of really how nimble can you be with the way that it impacted consumers. Both personally and professionally, we had to stop, drop and roll and pivot and shift like never before. So, you saw a lot of industry brands do a rapid shift to digital, whether they were in that space already or not; you saw that they were dipping their toes much bigger into it than in traditional marketing means. You couldn't go out and do grassroots marketing; being on TV and radio wasn't enough anymore. You had to be where the guests were at that time and where their trends were taking them, when it be streaming, whether it be Spotify, you know, online through all your social channels, et cetera.
Then you throw in the whole supply chain and labor issues as we start ebbing and flowing through the COVID time. And that, again, will shift and pivot and change. But the beauty of digital is that it allows you to move a little bit quicker than you can through some traditional channels. You know, that path can take many different forms. We saw delivery, as you mentioned, be a big cornerstone at the very beginning of COVID. That was the only way for consumers to get food from a restaurant at that time. We had a lot of restaurants that weren't in the third-party delivery space for various reasons. You also had a lot of consumers who didn't have trust in third-party delivery.
If you think about third-party delivery, I go in through a drive-through as a consumer, that food is with me every step of the journey until I get to whatever destination I'm going to to eat that food. With delivery, you personally aren't with your food that entire time. So, not all consumers embraced third-party delivery in a pre-COVID environment. In a post-COVID environment, you saw those spikes, we all saw it on the news. Those spikes happened, and owner-operators had to embrace those, as well. But then, "how does that impact their cost of goods, how does that impact their profitability" were continuing to be challenges for any restaurant company out there, whether they were all corporately owned or franchised.
AYREMPOUR: That's a great point, Stacey. Going back to the digital model really quickly, we recently did an Epsilon research report that showed the behaviors across delivery, takeout, in- in-store dining and outdoor patio dining. And it was interesting that the majority of respondents are actually relying on takeout, so they're going to the restaurant to pick up their food instead of relying on delivery to the level that we thought. And then people are starting to also shift from outdoor patio dining to indoor again. So it's looking like that recovery model is shifting quite a bit depending on where someone is.
FLOBERG: Absolutely. And I think it will continue to shift. I think what I'm seeing out there from a lot of restaurant brands and consumer trends is that delivery will still have a place here. Whether it has the spike that it had in the beginning of COVID is yet to be seen, but again, as marketers, we're hoping that, "OK, now that you trust us for delivery and you can come back into the restaurant, maybe that will grab me an incremental visit. Maybe that will grab me, instead of coming once every two weeks, now you're coming once a week." So again, making sure that that path for the consumer in the digital space when ordering from your restaurant as well as in store are really running in tandem with each other.
So, with all the disruptions in the supply chain, it absolutely makes an impact with our ability with limited-time offers. It makes it a little bit trickier due to these issues, whether or not the entire system can offer specific unique products at that time or others can't. So, we continue to have to challenge ourselves to have backups to each one of our proprietary products and backups to those backups, so that if there are interruptions unforeseen or last minute, you know, we can fully be able to execute those LTOs, whether they're regionally, nationally or locally. But the beauty is, is that digital will allow us--and looking at a digital footprint, whether that be print lists and digital menu boards--that will allow us to make faster updates to menus, to the process, training, et cetera, to get those to market sooner rather than later.
GIANNONE: That probably also helps with some of the test-and-learn stuff, even when you're thinking about menu, right? It's not only just the items that you may be having a challenge getting, but new items that you want to test, not having to reprint new menus, not having to roll things out across the board; you can actually test and learn quickly, it feels, based on some of those digital advantages that have come out in the last, you know, 18 months or so. So, I'm just sort of curious how you guys have thought about that as maybe a productive opportunity in the midst of all this?
FLOBERG: Well, you saw a lot of brands in the past 12, even 18, months do digital-only limited-time offerings where you could only get it through the app or only could get it online, and you can go in-store and get it. So you saw that, and that, again, that's the ability to pivot and shift quickly. But also, you know, as supply chain issues could come up that potentially impacted whatever that LTO was, if that LTO needed to go away, you didn't have to worry at all about making that adjustment on the fly.
GIANNONE: Do you feel like the response rates on some of those from existing guests, loyal guests, to new guests... I know we talked about retention and acquisition a little bit; do you feel like you've seen new types of customers come in because of these offers throughout the last, you know, many months?
FLOBERG: I think you're going to end up, like you said, impacting all three. Your loyal guests are going to be the guests who will without any type of risk, they'll buy it. There's where your loyal guests are. It takes it a little bit longer with acquisition, unless it's a unique product offering that is specific to them, or something that, you know, maybe whether it's vegan or plant-based, or is, you know, a steak promotion, et cetera, something that's one of their favorite things I've got it, at least they'll try that. It takes a little bit longer with acquisition, but again, the whole goal of doing a limited-time only offering for any restaurant brand is, again, to drive that frequency as well as trial. And then that's where the marketing strategy comes into how to best do that.
GIANNONE: You know, Stacey, one of the interesting things as I sat back and kind of listened to all the different challenges that you've had to deal with, and I have so much empathy for restaurants and restaurant marketers over the last, you know, couple of years. One of the things I hear is just, it's impacted all facets of the business. And so, you've got marketing, you've got operations, you've got IT, you've got finance, et cetera. And so, I'm sort of interested in how you have evolved the communication internally to tackle each of those issues, 'cause some of those are foreseen and some unforeseen, and so, I'm sure it's forced you guys to think about the ways that you work together. And so, I'm interested to see what you guys have learned throughout the last couple of years, and how that's influencing how do you guys go forward as a more cohesive unit?
STACEY: Yeah, the great question. It's, really about reviewing your tech stack. And "tech stack" wasn't even a term that I was familiar with, you know, five years ago. You knew what, all your technology players are to run your business both, you know, from a corporate office standpoint with, you know, your business intelligence tools, CRM data, et cetera, but then, when you look at it at store level, they're POS versus online ordering, versus kiosk, et cetera. It's really reviewing that tech stack, and this has become much more important today than ever because of the shifts, and the ability to be nimble is much more at the forefront.
All these technology partners have to work together, have to be integrated, have to be seamless for the guest, for the franchisee or owner operator, and for, you know, the support staff at the corporate office. Everything has to work in tandem and not only prepare you for what you need short-term, but long-term. So, there is a little bit of predicting that plays into that tech stack review. But I don't think there's any... one of my cohorts in the industry today that hasn't talked about reviewing the tech stack to make sure it is the right mix to lead them into the future, to help them optimize, grow, innovate, et cetera.
GIANNONE: Yeah, it's interesting because I think consumers have grown into behaviors that are going to stick around, and so, it's not just a short-term play. There are probably some short-term things I know we've heard from clients across the board we need to fix right now, but with the idea of knowing that there's gonna be, you know, this is gonna be part of the, uh, process and part of the relationship with the guest going forward. So, it's interesting to understand and hear from you how you kinda make those choices, or those bets, or, or those priorities as you're going through that strategy in tech stack planning.
FLOBERG: Absolutely. And especially in a franchise system, you know, this is something that you have to be very cognizant when making decisions, that, "How will this impact every single unit out there?" And not every single unit out there looks the same, it doesn't have the same market, it doesn't have have the same trade area. So how is this gonna impact them, not only financially, but gonna impact that experience that they're able to give to their guests?
AYREMPOUR: Based on some of those challenges that you addressed, what does good communication with franchisees look like right now?
FLOBERG: Good communication is pivotal in a franchise system, and it includes being transparent relaying facts, looking at the calculated risk, and having it be consistent and very well thought out with their needs being the forefront of decision making. So that, whether that be weekly communications, whether that be daily, it will all depend upon the topic. But the more transparent you are with "Here's where we are today, here's where we're looking to go," the better off you are gonna be.
GIANNONE: You know, one of the things that we hear a lot especially in franchise systems, as you mentioned before, it's not a one-size-fits-all strategy. You've got different geography, you've got different store layouts, you might have different menus across across the board. So, as these technology and behavioral shifts change, how do you guys think about that? Is it on a one-to-one level, and having that trust and communication with each franchisor, and them having the trust and open dialogue with you that they can embrace some of these changes even though they may not be ready for it right now?
FLOBERG: Yeah. That's a great question because, like you said, it's not a one-size-fits-all, and it's not just about the franchisee, it's also about their trade areas. So, you know, typically a lot of organizations will have an advisory committee of franchisees that they talk through, and some test stores to roll things out, but it's, you know, not talking to one franchisee and then they represent the majority. You have to make sure that you're talking to franchisees in different markets across different levels of locations so that you can understand, if we look at doing this, how is this gonna impact you? Because how it impacts him may not be how it impacts the guy on the East Coast versus the guy on the West Coast, et cetera. So, it becomes a lot of dialogue, a lot of, "Here's what we know, but here's where we see the benefit to the brand, the system, and ultimately to you, Mr. Operator."
GIANNONE: One of the things we talked about was different tools and messages that you have and conversations with the local franchisees. Could you have any examples of ways that that was successful for you?
FLOBERG: Absolutely. So, one of the first things that we did once COVID hit was we made sure that there were plenty of marketing materials for in-store usage for the franchisees to download and print locally. Not every store had the same state and federal guidelines at that time, everybody was in a different place with lockdowns, or mask wearing, et cetera, so we mean, immediately went to work, created tools for those stores to download and print locally for whatever applied to them. And then we took it a step further where we added marketing messaging to that, whether it be about delivery, or curbside pickup, or catering or any other topic that was relevant at that time that wasn't necessarily for national promotional messages, but could be for a store by store basis.
And then that franchisee, that operator owner could print whatever was a message they needed at that point in time. Additionally, we were very fortunate that prior to the start of COVID we had tested one of our biggest initiatives, which was looking for an ownable day of the week with a value message. Our Wicked sandwich happens to be our most unique identifier as a brand. So we had tested in late 2019 running a $5 Wicked Wednesday, and we tested this in several locations; we looked at the metrics, we looked at impact on profitability, looked at impact on supply chain, we tested it through various marketing channels, whether it be in-store, email, social, digital, et cetera, saw the results, saw that, "Hey, look, this is, this is something that we need to roll out system-wide." And we were very fortunate that we rolled it out in the second week of January of 2020. And as you know, COVID hit in March.
So we had some good momentum going into it because we plugged in a lot of advertising dollars. A lot of marketing initiatives went into the rollout in January, and extended really for those three months. So, that was a really unique way that we had an ownable day of the week, and the timing of it couldn't have been more perfect. We were lucky because that's why we didn't have some of the major impacts that a lot of other brands did as we have very loyal guests, and we had that value play in a time where, where value was something was really being sought after by consumers.
GIANNONE: And from a digital perspective, you know, as we think about taking that, like a level down from a marketing point of view, you know, you mentioned earlier being nimble being quick to change. And so, I'm interested in how, you know, that relationship with the franchisee, the relationship with I'm sure, you know, board or whatever it might be, then plays into what we do to communicate with our guests, right? On a day-in-and-day-out basis. And so, I'm curious how that nimble mentality has kind of influenced the way you think about creative, or the way you think about planning when you're putting a marketing plan together?
FLOBERG: Yeah. Well, I think, you know, as long as I have been doing this, I can't tell you that I've ever had a marketing calendar that when it was developed, you know, three months before the beginning of the year that it was solid and nothing changed. It constantly changed, it ebbed and flowed. Not to the level that we saw during COVID where it was changing on a minute-by-minute basis (laughs), but it definitely ebbed and flowed. And because a lot of marketing that we're doing is being done in the digital space, it has allowed us with geo-targeting to be nimble with those dollars, but also rely on the technology to help us understand what's the impact on sales. At the end of the day, that's what matters to franchisees: how are you helping them drive revenue.
There's three ways to drive sales: get new customers in, get your customers that come in today to come in more often, and get 'em to more while they're there. That's it. Not rocket science, it's pretty easy. So, being able to say, "We're doing this specific promotion or this specific digital execution, and here is what we estimate or anticipate the impact on revenue to be," will constantly keep their ears perked and saying, "OK, I get it. I see what you're trying to do." Because we're trying to drive sales, we're trying to drive traffic, I'm getting butts into seats, which is one of my favorite industry terms. But that is what is going to keep them engaged, because we can come up with all these great ideas, but they have to execute 'em store level. So we have to make sure that they understand the why so that they can execute.
GIANNONE: Has there been more pressure on those types of conversations in the last 18 months than it was prior, or has it just become more of a focus? 'Cause we know that, you know, things are changing quickly and this is the lifeblood of our organization, our franchisees and our guests that come into these locations. So I'm curious, kind of like on the evolution scale over the last, you know, couple of years, has it always kind of been like this, you know, before, and now there's just added focus? Or has this forced more focus in a positive way?
FLOBERG: Yeah. I think this has always happened in this industry, but during this time, I think the conversations became much more frequent and became much more centered around my specific store, and thinking outside the box of what they could do in their specific trade areas to make an impact, and not just relying on national advertising, or national emails, or national local store marketing activities. It became much more about what do I need to do locally because local store marketing was impacted the biggest. There weren't people to go out and talk to; you couldn't go and hand out samples, or hand out to-go menus, or some of those, you know, guerilla marketing marketing tactics that always tend to work, or going to colleges and, you know, working on catering orders, et cetera. You had to think completely differently and meet guests where they were in that moment locally, let the national do what it needs to do. So, I think the conversations, the frequency was probably about the same, but it was the intensity of the conversations and the shift in the topic, I would say, would be the biggest change.
AYREMPOUR: So, Stacey, I think we've, we've definitely heard a lot about all the pivots, and the ability to be nimble through all these changes and navigating the unknown. As we start to look ahead to this upcoming year for 2022, how are you approaching and navigating all these challenges?
FLOBERG: Yeah. I think, again, that focus on the tech stack. I think the focus on optimizing and innovating in the digital space with a heavy emphasis and focus on impact on revenue of every dollar that I spend. When I first started out in the industry very long ago, it was "make every dollar work like two"; I think it's now "make every dollar work like five." And in a franchise system, I think that there's an expectation to do that. So again, discussing what we're doing, why we're doing it that way, so that we can better achieve our efficiencies and measurement tactics. Considering that, you know, there are some obstacles out there with privacy laws that, you know, Apple, it's not as easy to track that guest orders here, here's how we know it happened; we have to constantly look for how can we have brand awareness, and retention, and acquisition, and be able to measure it and show that ROI.
So, digital allows us to do that. It is an area where you have a lot of ability to test and learn, and test and learn market by market. What's working, what's engaging your guests, where are they really picking up more engagement with you as a brand, and then that actually turning into transactions. So, how can we replicate that in-store experience for those that will still continue on their digital path with you?
GIANNONE: Yeah, I think a lot of what you said there is, you know, "our DNA," um, you know, here as well. I mean, I think we focus a lot on guest interaction, personalized communication, closing that loop on that transaction so that we can help marketers understand what is being effective. You said one dollar could be five, well, every dollar is really important (laughs). Uh, so it's really critical that we make good decisions with those dollars so that they drive the returns and outcomes that you're looking for.
You mentioned testing, and I was just sort of curious, like, with all the different options out there, like, how do you evaluate, you know, success in digital marketing or marketing overall, or the test-and-learn strategies that you put out there so that you can effectively communicate back internally, but also say, "I wanna make a bet on this going forward." How do you kind of prioritize those outcomes in your decision-making process?
FLOBERG: Yeah. Obviously the very first things that we're gonna consider is where the measurement could be revenue, and in proving out that revenue, whether it be through the POS, or credit card transactions, or through online ordering captures, in-store visits, et cetera. So, that will always be priority: how will this initiative, how will this advertising tactic be able to measure that? If it can't, it goes to the lower priority at this point in time, because that is ultimately our goal with the responsibility that we have to be good stewards of our advertising dollars. So that would be first and foremost in continuing to understand, again, from a CRM standpoint of, "If this guest engages with me as a brand through online ordering, do they also come in store? Do they also buy my gift cards?" It's that age-old question of, what's more important to you as a brand: engagement or loyalty? The two are very different things and can have different revenue impacts from a consumer standpoint on a brand. So, how do we continue to drive that engagement with my brand in a more frequent way, as well as capturing the right fish?
GIANNONE: Right. And when you think about that communication, 'cause the guest journey right now is sort of all over the place, you mentioned online, there's in-store, there are gift cards, there's engagements for those people that come in all the time. And so, there's all these different touch points that guests might have with your brand. And so, as you think about that outbound communication, how are you guys thinking about, or how do you make those decisions on what do you communicate? Or, how often do you communicate, or what's the differentiation in our messaging to try to connect all the cool things you guys are doing in the in-store experience and know that they can take advantage of that online?
FLOBERG: Yeah. Well, I think it's, it's constantly looking at metrics. It's constantly looking at impact on sales. So, if we're doing something that is, you know, done once a week, we've done some testing and learning if we advertise it every single week: is it still working, or does it have a negative impact of some weeks we don't advertise it? Then we take a look at, you know, the metrics being sales and guests counts and check average and, you know, in an email world unsubscribes; in a social world, does it have an impact on your engagement rate through your social metrics? So it's, again, taking a look at what is that impact. 'Cause if the guest is sick of hearing from me every week, those metrics are gonna tell me that. So it's constantly looking at the results of your efforts to see if it's overcommunication or undercommunication. Again, that's the beauty of what we do in a digital space is we can know every single week what's working and what's not based on some key metrics.
GIANNONE: You know, one of the things that we talk to a lot of our restaurant clients about is, is data. Some have good customer data, some don't have good customer data. Over the last, you know, two years, it's definitely been a central part of the conversation that we've had. And it's not just having the data, but it's knowing what to do with it. So, how have you sort of seen the industry deal with this, and, and how do you think that they're gonna be dealing with it going forward?
FLOBERG: Everybody's in a different path of their journey when it comes to data. I think still a lot of restaurants have a ton of data, but they don't know what to do with it, and what are the actionable insights coming out of it. Because at the end of the day, data's great, but data for data's sake doesn't do anything for you; you have to have actionable insights coming out of it, and a way to be able to pull those actionable insights is really, in my personal opinion, something that the industry still struggles with. And then, how do you activate or execute based on those actionable insights?
AYREMPOUR: You've both shared a lot of great nuggets of advice across all of these key topics. So, as a marketer, I'm kind of sitting here and thinking, you know, what are some additional pieces of advice for similar brands? If you had to give your top three pieces of wisdom to that audience, what would they be?
FLOBERG: I would say my top three would be: number one, that nimbleness in all of your efforts and consider how you can continue to not only optimize what you're doing today, what's working, what's not working, but also that pivot and shift mentality in cases of unforeseen items. You know, supply chain issues are gonna continue to be at the forefront throughout '22, as well as labor issues, and how as a marketer can you help provide the sales that the stores need to help overcome those issues.
Secondly, I would really spend a lot of time evaluating and innovating on your digital footprint. Does it currently make sense for your guests? Is it the right experience you want them to have? I mean, not only for your current guests, but as you're driving acquisition, what is that experience going to be like for 'em? Will it be the same as what they get in-store? In-store I have music in the background, and I have a vibe, and I have this feeling, and the goal is that that guest walks out feeling much better than they did when they walked in. How do you do that in a digital space where you don't have that human interaction or that one-to-one contact?
And then, lastly, remember it's always about the guest first, and the guest having a seat at the table in all of your strategic decisions. The brand comes second. Think about what's best for that guest, how they can engage with the brand, and how they want to engage with the brand, and how you can meet that guest where that guest is in their journey.
GIANNONE: To elaborate on that a little, and thinking about it from the different side, which is you had, you've talked about the tech stack, you've talked about partners, you've talked about your relationships with your franchisees... in general, are there certain inputs that you could recommend for folks to help you make those decisions and help you have those conversations internally that you value, and you could give some advice for someone like myself sitting here talking to you? (laughs).
FLOBERG: Yeah. Well, again, I think it goes back to the measurement; it goes back to the impact on profitability, and it goes back to the impact on the brand as a whole in the consumer's eyes. Those are the areas that, you know, those discussions that we're having with our vendor partners are happening on a daily basis, and will continue to happen, and continue to, how are we gonna optimize and grow? Where's the innovation? What ultimately are we trying to achieve, and how can we best do it in a very cost effective and efficient manner?
AYREMPOUR: Absolutely. Well, Stacey and Brian, thank you both for the great conversation today on the future of the restaurant industry. It was so great to hear how you've been able to pivot, how you're thinking ahead, and all the innovative ideas that you were able to share with us. So, thank you for joining, and hope you have a great rest of the day.
FLOBERG: Thank you.
GIANNONE: Thank you so much for having us.
For more information on Epsilon's work in the Restaurant sphere, check out our website.