Under CMO David Daniels, loyalty and marketing programs have boosted Potbelly’s traffic during a difficult time for many restaurant chains.
“I’m most proud of what this team has collectively been able to do in terms of just driving the level of growth that we’ve been able to drive in the business,” said Daniels, who started his role in 2021. “We were able to reach record AUVs. We had sustained strong traffic growth over the previous few years, when the restaurant industry really struggled with traffic. I’m just proud of the results, the growth that we’ve been able to deliver as a team.”
To achieve these results, Daniels and his team constantly monitor how customers interact with the brand and finding ways to strengthen and monetize those interactions. Take the viral phenomenon of dipping Potbelly sandwiches into the chain’s broccoli and cheddar soup.
“The team caught on to that, and we started amplifying it,” Daniels said. Today, any content Potbelly shares on social media associated with sandwich dipping gets more engagement than any other content that the chain releases, he said. “It truly has become a bit of a signature of ours.” So much so that he’s seen it imitated by other chains.
To amplify trends like this one, Potbelly tapped into customers on social media and micro-influencers with regional appeal in the areas where it has locations.
“You’ll find even on our social channels, the bulk of our content is user-generated. It’s either influencer or customer content, where they’re taking pictures of their own sandwiches, from their angle, from their view, from their point of view,” he said. “We do create some of our own as well, but it’s a combination of the two. I think it just creates a much more authentic and real voice for the brand and certainly visual appeal in the food category.”
For the sandwich dipping trend, “we took the opportunity to amplify even further in a full-scale production,” Daniels said.
The result was 15- and 30-second commercials depicting lunch at Potbelly. Naturally, the focus was on sandwich dipping.
Despite Potbelly sandwich dipping’s popularity, Daniels knows that not all his customers want to dip their sandwiches or even like sandwiches. He utilized that knowledge when he updated the chain’s loyalty app earlier this year.
“Years before I arrived, we were only rewarding free sandwiches,” he said. Today “personalization is really important in terms of just understanding that customers behavior.”
The new app rewards customers with salads, chips, and cookies, in addition to sandwiches. Customers also get rewarded more quickly than before. Customers are responding positively. The chain said digital business was about 40% of sales in the fourth quarter, an increase of about 150 basis points over last year. And loyalty program membership acquisition grew 87%.
Daniels insists that that sort of digital growth can only happen when working with the larger restaurant team.
“The one thing that we have as a competitive advantage is we still have a really inviting dining room,” he said. “It’s distinct and bespoke. And frankly, it's still a strong, distinct asset for us. And we think the balance of our in-shop dining experience, as well as the enhancements we’ve made to our digital experience, collectively create a pretty powerful proposition for our customers.”