With menu development as a driving force behind its marketing strategy, Arby’s Restaurant Group Inc. its focusing its efforts on its core demographic group.
The company filters all of its menu development choices through a group it calls “modern day traditionalists,” said Arby’s chief marketing officer Russ Klein.
Customers in that core group make up 18 percent of Arby’s customers but contribute to two-thirds of the company’s overall traffic, he said. In other words, they’re extremely loyal and valuable to the company.
“It’s around that consumer and their value system…that we build our innovation strategies around,” he said. During the past two years, Klein added, the company has tripled its “new product pipeline.”
The result: menu innovations such as the chocolate molten lava cake, the turkey roasters sandwiches and a fish sandwich limited-time offer for Lent.
The group has also helped determine future menu developments, such as the house-made chips that have been rolled out in target markets, Klein said. The chips can be flavored with an Arby’s Sauce-flavored seasoning, Van Popering said, which has resonated with its targeted demographic. Arby’s is planning a systemwide rollout of the chips in May or June.
“Our philosophy is that if an idea doesn’t resonate with our core audience we don’t lift a finger in developing the product,” said Len Van Popering, senior vice president of product development and innovation at Arby’s.
Since the company started pinpointing “modern-day traditionalists” during the first quarter of 2012, Arby’s has engaged 7,000 people who fit into the group and has fiercely marketed toward them, he said.
Klein said the core group of traditionalists doesn't share much in the way of demographic information. Rather, he said, “It’s a group that’s held together by their value systems — their beliefs about life and God and country and living.”
“It’s a rational, no-nonsense group,” he said. “I think of them as a group that prefers the familiar with a twist, rather than something they’ve never heard of or is specifically on trend.”
Another characteristic the core customer group shares is that they love the Food Network, Klein said. They’re engaged by and interested in food, he noted.
Van Popering said that although not all of Arby’s customers fit into the core group, the company strives to be very meaningful to them while hoping to capture others in the process. “We can’t talk to everyone out there,” he said. “But we can focus our energy on our guests who are dining with us most often.”
So far, Klein said, the targeted menu strategy is working—the sales numbers speak for themselves. “Knock on wood, we’re in our tenth quarter of same-store sales growth,” he said. “We feel that the [marketing] decisions are being reflected in sales performance.”
For example, Arby’s limited-time offer for Lent, the Reel Big Fillet sandwich, was very well received by Arby’s core customers. During the first 12 days of Lent, Arby’s corporate stores sold 127 sandwiches per unit per day, or 37 more per day than last year. During the 12 days, the fish sandwich made up 13 percent of sales, the company said.
Arby’s has more than 3,400 restaurants systemwide, and is owned by Atlanta-based private-equity firm Roark Capital Group.