By Hope S. Philbrick
Fast-forward another 34 years, and Arby’s is still making heads turn. The company was recently ranked one of the top quick-serve restaurants in the U.S. to provide an overall excellent guest experience and menu offering in a recent mystery shopper campaign conducted by Service Intelligence, a data-collection company based in Charlotte, N.C. (Arby’s tied Chipotle for the top overall score.)
“We’re very pleased to see that our dedication to the guest experience, in combination with our commitment to providing an innovative menu, is receiving such tremendous feedback,” ays Paul Brown, CEO of Arby’s Restaurant Group, Inc. (ARG). “Our goal is to serve, refresh and delight our guests with every interaction.” Brown held key roles at Hilton Worldwide, InterContinental Hotels & Resorts, Expedia and McKinsey & Co. before joining Arby’s as CEO in April 2013.
For the survey, mystery shoppers visited quick-serve and fast- casual restaurants around the country and were asked to share candid feedback about their experiences. Arby’s topped the list in several categories: It ranked No. 1 in overall performance and interior cleanliness and placed among the top three in exterior appearance and customer service. More than two-thirds of mystery shoppers indicated that they also had a better experience at Arby’s than they normally have at a fast-food restaurant.
Arby’s currently has more than 3,400 restaurants worldwide; approximately 1,000 of which are company-owned and operated. In 2011, when it split off from Wendy’s, the Arby’s brand was acquired by Roark Capital Group. Business is strong. “We don’t release sales figures, but December 2013 was one of the most positive quarters in the history of the brand,” says Brown. “We’ve seen accelerating business for 13 consecutive quarters (through fourth quarter 2013).”
What’s driving this upward momentum? Brown credits product innovation like the new Smokehouse Brisket sandwich – a “phenomenal success” since it was introduced in October 2013, says Brown, that has been earning accolades as the “best-tasting sandwich in QSR”– and King’s Hawaiian® Roast Beef sandwiches. The French Dip sandwich was re-launched last September, with 33 percent more meat and double the cheese than the former recipe. Additional new products are in the works.
“We’ve also focused on improving operation of stores themselves,” says Brown. “Not just the bottom line but focusing on speed and quality of guest service. We’re trying to improve the quality of experience in our restaurants, beyond the food, and I’m very pleased by that progress. We’re happy with the results of the mystery shopper survey, and I see it as a combination of great product and labor improvements.”
To ensure quality is consistent across the brand, Arby’s employs an operational inspection process. “We visit every location twice a year, unannounced, to make sure every unit is adhering to our standards,” says Brown. Best practices are shared across the brand. “We also monitor guest feedback,” on various channels including social media. Any issues are addressed immediately.
Refocusing and Growing
In October 2012, Arby’s rebranded with the “Slicing Up Freshness” tagline. More marketing changes are forthcoming. “We’ll be announcing a new ad agency soon,” says Brown. “We intend to be operating under a new campaign by May of this year. I’m extremely excited about it – it’s very different than anything you’ve seen from an Arby’s, period. It’s very innovative and different than anything in the QSR space and will definitely get attention and get people talking about Arby’s.”
That’s not the only change coming: “We have a big initiative on remodeling and improving the actual buildings,” says Brown. The first location of the new prototype will open in Huntsville, Ala., in March.
When changing a brand, “it all starts with a clear long-term vision,” says Brown. The thought driver was: “What, ideally, should Arby’s look, feel and sound like as a whole experience five to seven years from now?” The new advertising campaign will communicate that vision.
“It’s important to have a clear sense of purpose as a brand – that everyone can rally around for a very long period of time,” says Brown. Arby’s brand purpose, “inspiring smiles through delicious experiences,” is at the center of a wheel graphic that outlines Arby’s business strategy and core values (the six values are along the outside edge). “That’s what we’re all aligned to do. It’s not a tagline or an ad campaign,” says Brown. “It’s the purpose for both the company and the brand.”
Growth is a goal for 2014. “We haven’t been on a big development push for several years,” says Brown, “But we’re looking to expand the number of units again.” Expansion is expected in several areas, including standalone units, end- caps and non-traditional units. Arby’s will also ramp up recruitment of new franchisees throughout 2014.
By any metrics, Georgia is a growth opportunity. “We have 86 restaurants in the Atlanta area now,” says Brown. “We have a lot of opportunity for more, including the outward-lying areas of metro Atlanta and roadside locations throughout the state. The Georgia market is a very friendly market for doing business.” He says that with confidence, noting that the company does business in every state in the country except for two (Vermont and Rhode Island).
When determining new locations, the company weighs a number of factors including demographics, market penetration, size of population and cost of media. But ultimately, it comes down to street level, factoring in details like traffic flow and whether or not a drive-through window would fit into that flow. Drive through is 60 percent of Arby’s business, so it’s a big factor.
Arby’s has a “super loyal core” customer base, notes Brown, citing the fact that the restaurant serves “products you can’t get anywhere else.” Demographically, that core group averages 30 to 40 years of age. To expand its market, Arby’s aims to close the perception/reality gap. As underscored by the mystery shopper campaign, “When people do come into our restaurants and try our food, they do like us,” he says. “We need to tell the story of our brand to a broader group. It’s a marketer’s dream, really: We have a great product and need to do a better job of getting the message out.”
Helping End Childhood Hunger with the Arby’s Foundation
Arby’s Foundation was launched in 1986 as a way for Arby’s Restaurant Group, Inc., to give back to the communities it serves. For more than 25 years, it has donated more than $57 million to child-related charities across the U.S. In 2011, the Arby’s Foundation changed its charitable focus to ending childhood hunger in America.
Arby’s Foundation has a strong relationship with Share Our Strength, because it “shares the same mission that we do, and we feel that partnering with them is a way of amplifying our efforts,” says Arby’s CEO Paul Brown. (Arby’s Foundation also works with other organizations targeting childhood hunger.)
“Childhood hunger is a much bigger issue in this country than most people believe,” Brown says. “It’s particularly an issue during summer periods when children don’t have access to school meals.”
Last year, Arby’s Foundation raised more than $3 million. “It’s a significant effort, and that number goes up dramatically each year.”
In 2012, Arby’s Foundation launched the Hungry for Happiness mobile tour, which visits cities across the U.S. with the dual goals to deliver wholesome, fresh meals to children in need and inspire others to join the fight to end childhood hunger. So far, the 30,000-mile tour has visited 45 cities, fed 11,000 kids and donated more than $250,000 in local grants to hunger-fighting organizations. This fall and winter, the Hungry for Happiness truck will visit charities in its corporate hometown of Atlanta.
Does charity impact the bottom line? “I believe it does,” says Brown. “I don’t know if I’ll ever be able to show you the metric, but consumers really like to do business with a company that stands for something they can identify with. In our highly competitive, extremely crowded marketplace, it sets our brand apart and shows that we are doing things other than trying to make money.
“I really do believe that if there’s ever a tie in a consumer’s mind between one brand and another, people like to give their business to a company that is broader. There is a feel-good factor for consumers and also for team members – when they feel good about the company they work for, that makes it to the customer. We have 71,000 team members working with guests 610 million times a year, so if you think about projecting the brand, it helps having motivated, excited and committed team members. One of the most important things you can do as a business is align values around a particular way to make a difference.”