Rob Lynch, Arby’s CMO, Aims To Take A Big Bite Out Of QSR Biz
Rob Lynch and his Arby’s team have been fighting above their weight class to rebuild the Arby’s brand and re-engage guests and franchisees. “This is marketing warfare,” Lynch told CMO.com. “Very few great things have ever been done without taking risks.”
Hungry for marketing insights? CMO.com went up to the Arby’s counter to order a meaty mountain of marketing lessons from Rob Lynch, brand president and CMO at Arby’s Restaurant Group.
Lynch and his Arby’s team have been fighting above their weight class to rebuild the Arby’s brand and re-engage guests and franchisees. They have grown revenue, profit, and achieved the best sales year in Arby’s 50-plus year history, all while significantly outpacing quick service restaurant (QSR) industry same-store sales growth rates.
Let’s find out what Lynch has been cooking up.
CMO.com: What were the strategic business needs and opportunities when you arrived at Arby’s in 2013?
Lynch: When I was making the decision to come to Arby’s, the appealing parts to me were Arby’s very strong heritage and DNA from its founders, who wanted to deliver food that was differentiated with higher quality than the burger guys; a history of being different than other fast-food brands; a scaled business model with 3,300 restaurants; and an impressive team.
The gaps were around Arby’s brand purpose and positioning. There wasn’t a lot of clarity. It seemed to me that there was no sense of what the Arby’s brand really stood for and what its differentiated place was in the market. Prior to the new CEO, Paul Brown, coming in, the business was run with a cost focus, not a guest focus. We had multiple brand campaigns and different product launches over the course of 20 years, and with four different ownership groups that made a lot of decisions for things like remodels, new equipment, the right amount of meat on sandwiches, and using higher quality ingredients based on cost.
CMO.com: What was your recipe for addressing these issues with Team Arby’s? What was the road map that led to the QSR industry-leading results Arby’s has just delivered?
Lynch: Job one was to explore, get clarity and definition of what Arby’s really was–the true essence of Arby’s. Arby’s has always stood for being different, high quality, and being innovative, but the high quality part had fallen by the wayside. And Arby’s was only known for one thing–roast beef. And yet Arby’s had so much more to offer. Arby’s has the highest quality and most variety of proteins of any QSR brand. In the QSR industry, protein is what drives the consumer’s decision. … This was something we had that none of the burger guys and most of the other QSRs had. But consumers did not know that. So there was a big opportunity to unlock this to create awareness of these differences.
Job two was to understand who our guests were and making sure that we were guest-focused versus cost-focused. When I got here, Arby’s was the second-oldest brand in the industry, not based on business longevity but on the age of our guests. We had two options. One, we can grow old with our customers and eventually die with them. Or we can build a segmented customer base that is a balance between our loyal guests and new, younger guests who are driving growth and energy in the industry. We landed on the latter. So we needed to make sure that we were doing things from a product and marketing innovation standpoint to make sure that we were engaging and relevant for the younger target audience that is a big driver in the QSR industry.
Job three was looking at Arby’s marketing spend relative to the QSR competitive set. Arby’s is outspent 10-to-1 versus our larger competitors. So we can’t just scream louder because we aren’t louder. We have to do things a little differently. That’s where we’ve built a core capability of finding cultural moments and activities where we can dive in and connect our brand in a unique and engaging way. This is how we make our voice loud enough to cut through the billion dollars being spent by our No. 1 competitor.
CMO.com: Take us through the process of getting to the “We Have the Meats” brand positioning.
Lynch: From a positioning standpoint, it wasn’t about changing what Arby’s was but rather being more about what Arby’s was. We felt that Arby’s had a unique, differentiated positioning in the marketplace. It was just underutilized and underleveraged. Arby’s is the place where you can come to get high quality, abundant proteins across a variety of proteins. This is where “We Have The Meats” came from. In a time when many QSR competitors are trying to please everyone, we decided to not please everyone with a broad, unfocused menu but rather focus on what we’re about, do it even better, and make people aware of that.
CMO.com: You’ve said that “Arby’s is fighting above its weight class” versus QSR competitors with marketing budgets 10 times that of Arby’s. What have you and your team learned?
Lynch: Every challenger brand, especially in a very competitive entrenched category where there are much larger and better resourced brands, has to fight above their weight class to win. What we’ve learned is that you have to be willing to take risks, do things differently, and step out of your comfort zone. You can’t go out with a standard playbook that is the same playbook bigger competitors are using and expect to beat them. You won’t. This is marketing warfare. Very few great things have ever been done without taking risks. And when you take risks, you get a team that is OK with accountability for making the right decisions. This accountability builds credibility. When things go well, great, learn from and scale what worked. When things don’t go well, take accountability, understand what drove the miss that you didn’t foresee, and learn from that and try not to repeat it.
CMO.com: What role has innovation played in the Arby’s brand and business turnaround?
Lynch: We always challenge ourselves to try things that make us uncomfortable. When I got here, I told the team, “I want you to bring me things that are going to make me very uncomfortable.” I challenged the team to push me as far as I can go. We’re not always going to move forward with those things, but I truly believe that if you step way outside your comfort zone, it forces you to end up outside of the norm.
I have two examples, one from product and one from marketing innovation. On product innovation, we had been on an operational streamlining, cost-reduction path for a long time. We would only think, how many roast beef sandwiches can we sell even though we had other menu items? But those other menu items took longer to make, and the cost of goods is a little bit higher. Over the past two years, we have significantly improved our operating model to accommodate new and innovative products that are more time consuming and difficult to make, like our Smokehouse Brisket sandwich, Loaded Italian, and Gyros. If we had not pushed the envelope, these would never have seen the light of day.
On the marketing side, the best example is the vegetarian hotline we created. When the team brought the idea to me that we should create a hotline for vegetarians who were going to be challenged because we have such great meat, that made me really uncomfortable. But you know what this boils down to? Knowing who your target audience is is important, and knowing who your target audience is not is just as important. So knowing that a vegetarian is really never going to come to Arby’s, we weren’t that concerned about creating angst with this population. We had no intention to upset them or make fun of them or do this in a nasty way. It was about having a sense of humor and realizing that some people will get the joke and some will not, and if the people who do get the joke are our target audience, then it is going to endear Arby’s more to them. This is the type of work that breaks through, that people talk about in social media and traditional media that we could never have generated had we not pushed the envelope.
CMO.com: As you’ve strategically rebuilt the Arby’s brand, your team has executed agile, savvy marketing to play into contemporary culture in real time. What’s the back story on a few of the most noteworthy examples, like what Arby’s did with The Daily Show with Jon Stewart and the Twitter exchange over Pharrell Williams’ “Arby’s-like” hat at the 2014 Grammys?
Lynch: I truly believe that for us to win, we have to be more attentive to our guests, and we have to leverage the tools that we have to be able to engage with our guests above and beyond our TV GRPs. When I came to Arby’s, we had one guy monitoring social channels. One of the first things I did was build a social-listening center and made sure that we had the right personnel in place to make sure that we were not only pushing out the right content but also listening.
When the Grammy’s were happening, our social-listening room was operational, and we were listening. We noticed that some of our fans were tweeting about Pharrell Williams’ hat looking like the Arby’s logo. As a result of us listening to these conversations, we decided to send out a tweet that said, “Hey @Pharrell, can we have our hat back? #GRAMMYS ,” and it just exploded. And then Pharrell tweeted back ‘Y’all tryna start a roast beef?’ We had 90,000 retweets in 12 hours. The media thought it was the funniest joke of the night and talked about winners and losers of the Grammys with the big winner of the Grammys being Arby’s.
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You never know what is going to spark with guests and fans. You hope to have a good sense of your brand and your customer base, and you try to engage in a relevant, meaningful way. None of this was staged or planned. It was an authentic, real moment that we were able to capture.
The [following] year, we had an even bigger unplanned thing happen to us … that had twice the size conversation and engagement level as Pharrell’s hat. Two months into my tenure, Jon Stewart made an [unpleasant] joke about Arby’s. My PR people sent me an FYI email about it. I sat down with my CEO and said, “We have a decision to make. Do we send Jon Stewart a letter letting him know we are not happy with this, do we ignore it, or should we embrace it and send Jon and his whole crew Arby’s food?” We decided to do this last option and sent his team lunch. Jon Stewart’s team then tweeted how much they loved the food and thanked Arby’s.
So we thought that we’ve now made friends and all is good. And then Jon did another joke about Arby’s and then another set of jokes 20 more times. And every time he did an Arby’s joke, we sent his team lunch and thanked them for featuring us on their show. Even though it wasn’t the way traditional marketers would want their brand to be featured on a show or put our brand in the best light, after a while it became part of the show that we and our customers could laugh at and not take seriously.
We were listening when he told viewers that he was retiring. We tweeted, “Hey Jon, feel free to reach out to us at Arbys.com/careers.” The next night, he put that tweet on his show and spent five minutes talking about Arby’s and how we were a worthy adversary, but he would vanquish us. A few months later when he had his last show, Jon Stewart’s team asked us to be a part of the show. Our CEO got to be on the show, and we bought time and aired a special TVC that was a montage of all of the comments that Jon had made about Arby’s over the years. For us, we felt this was really authentic and true to our brand character. This is the type of thing you can’t ask your agency to develop. I truly believe that the power has shifted from brands to consumers with the advent of all of the communications channels out there.
CMO.com: Arby’s was honored with the “2015 Social Marketer of the Year” award. What roles do social media and mobile play as part of the marketing mix?
Lynch: For us, social media is a two-way street. Social is just as important as a listening tool as it is an engagement tool. We do very little sales-driving advertising on Arby’s social media. Most of our content is about engaging—creating an emotional and thought-provoking connection with our guests and fans. We put out content about what is happening in culture or our brand that we think is interesting, and we are adding value to the social feeds that our guests are paying attention to.
The second piece is that we truly listen to what is going on—all of the conversations about our brand, our competition, the QSR industry, and we try to respond and be there when it makes sense. But we don’t force ourselves into any of the conversations. We only respond to things that make sense and where we think we can add value to our guests in that channel.
As for mobile, it will play a huge role in our industry since 65% of our business comes from people sitting in their cars. Mobile can also help us with drive-thru ordering throughput, productivity, and the quality of the guest experience. Mobile will be a big business tool for us. We’re working on it.
CMO.com: What are your top three learnings from the Arby’s brand and business turnaround that fellow CMOs could benefit by knowing?
Lynch: First, marketing is a perfect marriage of art and science. Research can be very misleading if that is all you use. It needs to be coupled with business intuition and marketing acumen to help drive decisions. Stated desire is very different than actual behavior. P&G taught me this. You have to have some art and talent to understand and internalize what is going on, how everything comes together, and the underlying desires versus stated desires.
Also, know who you are as a brand and stick to it. Very few brands have ever changed from what made them successful and maintained success. Lots of brands have evolved. But the ones who have evolved and been successful have leveraged their core equity into new business opportunities versus trying to change who they really are. This is what we’ve done at Arby’s. We did not change who we were. We took the core equity and essence of the brand and poured water on it to bring it to life in a much bigger way than it was.
Finally, know who your customers are and who they are not. If you truly understand who your customers are and what’s important to them, then you will be able to do things that are highly motivating and engaging to them, even if it means that you are going to potentially upset or not appeal to a different group of people who are not your target audience. This allows you to take risks, market above your weight class, move out of your comfort zone, and breakthrough.
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