CMO Perspectives: Mark Mears of Schlotzsky’s - Fast-casual chain focuses on mobile loyalty, Millennials
Fast-casual chain focuses on mobile loyalty, Millennials
Schlotzsky’s CMO Mark Mears has a unique, diverse background in building growth brands, with experience at Pizza Hut, McDonald’s and The Cheesecake Factory.
Mears, who was most recently president of Mimi’s Café, discussed Schlotzsky’s recent turnaround successes and future plans, including a new mobile loyalty strategy and marketing to Millennials.
Can you provide a brief snapshot of your brand for anyone unfamiliar with Schlotzsky’s?
Since we first opened for business in Austin, Texas, back in 1971, Schlotzsky’s has been the home of The Original oven-baked sandwich, featuring sourdough bread baked fresh-from-scratch in our restaurants each day with no preservatives. The menu has evolved to reflect the changing tastes and dietary concerns of our guests, which includes the highest-quality oven-baked sandwiches, gourmet pizzas, artisan flatbreads, fresh-tossed salads and signature soups. With more than 350 restaurant locations worldwide, Schlotzsky’s is the fast-casual choice for a quick, healthful, and fresh dining experience. Schlotzsky’s is enjoyed around the world, with restaurants in 36 states and locations in Azerbaijan and Turkey. Schlotzsky’s is owned by Focus Brands Inc.
Schlotzsky’s has been in the midst of a turnaround. Tell us about that.
Our president, Kelly Roddy, has done a masterful job of rebuilding the brand and regaining trust within our franchise community and among our guests during the last seven years. His vision to elevate Schlotzsky’s from its roots as a QSR sandwich/deli player to a leader within the fast growing fast-casual bakery-café segment has galvanized our entire organization. In fact, Kelly is largely the reason why I came to Schlotzsky’s — to partner with him and his executive team, along with our franchise community in doing something very special with this proud 43-year old brand. Our upside potential and planned growth trajectory are very exciting indeed. The pursuit of fulfilling our Lotz Better brand promise is what drives me and my team every single day.
How has the Cinnabon co-branding performed?
Our co-brand partnership with Cinnabon has worked out very well for both brands. Cinnabon is a globally recognized brand name with a wide array of irresistible items that provide our guests with new reasons to dine at Schlotzsky’s. Cinnabon provides an incremental sales layer for Schlotzsky’s, while we provide many additional points of distribution for the Cinnabon brand. We will continue to explore co-branding partnerships that make sense for our brand, as long as they offer an added value to our guests and a solid financial return for our franchise partners.
Consumer Reports recently ranked Schlotzsky’s above tough competitors such as Chick-fil-A, Panera Bread and Chipotle in terms of taste. What efforts have contributed to that?
This is high praise indeed, and reflects the breadth, depth and passion of our fan base, who view Schlotzsky’s as a uniquely crave-able and differentiated dining experience. The results of this Consumer Reports survey certainly help to substantiate our Lotz Better brand positioning, and we couldn’t be more pleased to have earned this special recognition from the readers of such a well-respected publication.
You have brought a much larger emphasis for the brand around mobile marketing. Why has that been important?
Given the advent of both digital and social media, coupled with the increased level of control enjoyed by today’s more tech-savvy guests, the ability to reach a mass audience through traditional means has become very challenging, especially on a limited budget where every dollar spent must provide maximum return. As a result, we must employ an integrated marketing communications approach — a balance of both mass and micro techniques — leveraging guest information and data to develop more targeted and measurable plans to reach our desired audiences in an effective, yet cost-efficient manner.
Reaching Millennials is critically important to the growth of our brand and, given Millennials practically “live” on their mobile device, we knew we needed a relevant, compelling way to engage with them on their terms.
You recently introduced a mobile app with a loyalty component. How does it differ from others?
In partnership with Punchh, a mobile customer engagement platform provider, we recently launched a mobile app-based guest rewards program called Lotz4Me. With Lotz4Me, we are able to engage our guests right on their smartphones, in our restaurants or wherever they are, in a personalized manner. In just three months, we have obtained over 100,000 members. In fact, during our initial launch phase, we ranked as high as the No. 4 app within the Apple App Store among all restaurants. Our Lotz4Me rewards program is different from many others as we aim to deliver both commercial/rational benefits along with psychic/emotional benefits to our members. This data-rich platform provides relevant, compelling and engaging news through each of our four benefits: Reward & Recognition, Exclusive Insider News & Special Offers, Social Media Sharing & Referral Bonuses, and Guest Feedback & Surveys.
What is your advice to restaurants looking at getting into mobile advertising and apps?
From my perspective, it all comes down to two important and interrelated mandatories, differentiation and relevance, setting your mobile app apart from the crowd and endeavoring to deliver benefits that are relevant to your target audience. Don’t just use technology to create a “wow.” Rather, use the data, information and insights that technology provides to engage your guests on a more intimate, one-to-one level. This will elevate your brand from a surface-level transactional exchange to a deeper, more relational level with your guests.
How important are Millennials to Schlotzsky’s and the restaurant industry?
Currently, Baby Boomers and Gen Xers represent the base of our business today. However, our future growth hinges on the cultivation of our aspirational target — Millennials. Millennials are not only a large and influential demographic segment, but they represent a challenge in how to effectively and cost-efficiently reach them in a relevant way. The key to success with this guest segment is to engage with them on their level. They have more information and exert more control over the conversation than ever before, so we must appeal to them in a way that is real, genuine and authentic to gain their trust, loyalty and advocacy. They are certainly not shy in taking to their social networks to express how they feel about a particular product or service, whether their experience is a positive or negative one. They like the ability to share and connect digitally with their friends.