3 Lessons from Chipotle’s New Strategy

Lessons from Chipotle’s New Strategy

Aug. 21, 2017 | 4

Chipotle Mexican Grill flourished from the beginning. Seemingly overnight, the fast-food chain became a nationwide darling, serving burritos so addictively delicious, the term “Chipotle intervention” was created. 

The burrito giant has done things different from other chain restaurants, like opting for grassroots marketing campaign over a flashy advertising scheme, making few changes to the menu, and serving  “food with integrity” only.

When asked by Time magazine to explain its success, chief marketing officer and advisor to CEO Steve Ells, Mark Crumpacker replied, “We’ve been very consistent with what we’ve done over the years. Chipotle doesn’t play the typical marketing game where we add new menu items and try to get people in with gimmicks like that.”

Their success would have continued if not for a nationwide-reaching virus in 2015 and a potent outbreak of E. coli in 2016 that turned off customers. For three years in a row now, Chipotle has seen a decrease in sales—and remaining consistent hasn’t been enough to draw customers back.

To boost sales and increase foot traffic, the company is shaking things up and trying out ideas that are out-of-character. For the rest of the industry, it’s a great learning opportunity. How does a company with almost 2,200 US locations improve sales? Believe it or not, there are three lessons every restaurant owner and manager can learn from.

Lesson #1: Break the Ranks

Since inception, Chipotle has been a company to hire within the ranks. Its executive level was filled with individuals who worked their way up from the bottom. This past year, Chipotle decided to restructure its top level of authority.

In May 2017, former Arby’s executive Scott Boatwright was hired as the company’s first chief restaurant officer. In the beginning of August 2017, former executive for Yum Brands Inc. Laurie Schalow was brought in to be its chief communications officer.

Although the company prefers to hire from within, seeking outsider experience proved necessary after unsuccessful attempts to boost sales.

The Lesson: Don’t be afraid to look outside your team. Reward employees that work hard and prove their effectiveness on the job, but resist from hiring strictly from within. A new employee will bring a new perspective that could improve your restaurant’s operations and increase sales.

Lesson #2: Update Your Menu to Meet Customer Demands

Updating the menu hasn’t been integral to the Chipotle business model, but over the years, new menu items have been added, like burrito bowls and chorizo. "We have never said never to menu innovations, it has simply not been a driver of our business the way it is for other chains. For us to add to our menu, we have always wanted to be sure that what we are adding fits within our menu overall, and does not add unnecessary complexity to our operations," said Chipotle spokesperson Chris Arnold.

Now the company is aggressively testing out new recipes to lure customers back and opened a location in New York City, NY to serve as a test site. This Chipotle location offers new salads, dessert items, and margaritas. But what might be considered the most exciting addition is queso.

For years, consumers have been asking for the liquid cheesy side, yet the company has resisted. In a video that has since been deleted, Chipotle said queso is "made with artificial stabilizers to keep its shiny liquid form," to explain why they didn’t offer it. Although their recent recipes of queso were considered failed attempts by customers, it appears Chipotle is determined to add the popular addition to their menu soon.

Additionally, Chipotle is looking to add new beverages to their menu, which hasn’t been changed in 10 years. They are also adding breakfast-centric menu options, a nod towards the major 2017 food trend. In fact, the breakfast sandwich is the most successful menu item of the year.

The Lesson: There are three major points to take away from Chipotle’s decision to update the menu: 

  1. Listen to your customers. Do you get multiple requests for the same item? Chances are that you’re missing out on a great sales opportunity by not adding it to your menu.
  2. Pay attention to food trends. Since December 2016, Lavu has been talking about the popularity of the breakfast sandwich. If Chipotle is seriously considering adding breakfast burritos to the mix, it’s a sign that this is one trend that isn’t going away anytime soon.
  3. Don’t be afraid to test out new recipes. Even Chipotle doesn’t create successful recipes every time, but they are tenacious in the test kitchen. If there is something they want to bring to the menu, they will test out different recipes until they get a perfect choice.

Keep your menu updated with great recipes that meet current trends and consumer demands, and your sales will reflect the increased satisfaction of customers.

Lesson #3: Try Out Traditional Advertising Avenues

Chipotle has made it big without big tv ads, instead of using a grassroots marketing strategy. But now it will start with new tv spots promoting the tagline “As real as it gets.” This indicates that sometimes, you need to spend big bucks to draw in big crowds. Social media is a great marketing method, yet to get a big boost in sales, focus on traditional advertising avenues used for restaurants

  • Large print ads in the newspaper
  • Regional mail-in campaigns.

When you put your name in front of thousands of new eyes, you are sure to see an increase in foot traffic.

The changes underway at Chipotle are functional options for all restaurants. Keep these three lessons in mind when you consider a new sales strategy for your restaurant or bar.

Aug. 21, 2017 | BY Emma Alois

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