June 17, 2010

56) In-N-Out Burger

危 wēi  danger

In-N-Out burger is a chain of fast-food restaurants founded in 1948 in California.  The brand became famous for its limited menu and simple strategy that remains in use today: “Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment.”  While scaling to 240 stores the company has stayed true to its vision – rejecting calls to franchise, leaving the simple menu unchanged and ensuring that it rewards its staff better than its competitors (it is one of the few fast food chains that pays more than state and federally-mandated minimum wage guidelines). And, to maintain freshness its locations are all within one day’s drive from its Baldwin Park distribution center. It’s great at what it does as evidenced by it consistently topping polls like this Zagat report. Given its rejection of growth through franchising and its inability to expand too far from its distribution center I have always thought its tiny menu might be its downfall. Surely its fans would become bored of the offer?

机 jī opportunity

My fears were allayed when traveling with a colleague recently.  On a road trip we visited In-N-Out, after choosing and ordering (very quickly given the lack of choice) I noticed that he ordered ‘off-menu’.  It turns out that In-N-Out has a ‘secret menu’ – this struck me as pretty smart because it allows its fans to make a wider choice and it drives word of mouth marketing.  I looked it up on the web and it turns out it’s not even that secret: when celebrity chef Gordon Ramsay appeared on The Hour, a Canadian TV talk show, he chose an animal style In-N-Out burger to be his “death-row” last meal.

How About…

  • Stripping your offer to its simplest version?
  • Developing a ‘secret’ offer for your best customers, making them feel privileged and deepening their affinity of your brand?

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and, just in case you’re interested (and out of the loop like me) here are some of the not-so-secret menu items:

May 4, 2010

49) Cranium

危 wēi  danger

In 1998, after spending a weekend playing games with some friends Richard Tate, a rising star at Microsoft at the time, decided that there was a gap in the market for a board game that used multiple skills.  He was so confident of the opportunity he quit his job and convinced his coworker, Whit Alexander, to join him. Instead of focusing on a general market need the two founders decided to design their game around a “moment,” specifically the moment when players “appear smart and funny in front of family and friends.” Together they designed a novel board game called Cranium – billed as “The Game for Your Whole Brain.” Initial feedback from friends and family was so strong they decided to place an order for 27,000 units from China.  However, with the order delivery date looming the team failed to get their product into the American International Toy Fair and hadn’t managed to sign up a single toy retailer.

机 jī opportunity

While drowning their sorrows in cups of Starbucks the team wondered why they needed traditional toy retailers at all, it struck them that other channels might make more sense, not least Starbucks.  After some persuasion the coffee chain stocked Cranium, the first time they had ever sold such a product and it was an immediate success.  The game went on to be the first board game sold by many other retailers too, including Barnes & Noble and Amazon.com.  Cranium then developed a series of other products, making sure that they stayed true to their brand by remembering the acronym CHIFF (clever, high quality, innovative, friendly, and fun) as their guiding principle.  By developing great new products and selling them through new retail channels the company has sold over 22 million games – making it the third largest games company in the world.  Whit and Richard sold out to Hasbro in 2008 for $75m…

How About…

  • Optimising products or services around an important “moment”?
  • Distilling your brand down to its DNA to help choose brand extensions wisely (acronym optional)?
  • Questioning traditional channels, instead asking yourself where your target customers tend to congregate?

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April 27, 2010

48) Waitrose

危 wēi  danger

The big UK supermarkets are increasingly under attack for pressuring their suppliers and destroying the traditional British ‘high street’.  But, for the bulk of UK consumers value, choice and convenience remain the most important selection criteria for their choice of food retailer.  As supermarkets expand (because they address these criteria better than many of the alternatives) they are likely to feel the backlash more, particularly as they grow their high street presence with the rising ‘convenience format’, (stores that are smaller than average and retail a selection of key ranges). For example, in September 2009 Waitrose announced plans to increase its numbers of convenience stores to 300 over the next 10 years after successful trials of the format. Given this expansion Waitrose will surely increasingly feel a backlash from consumers?

机 jī opportunity

Perhaps not, Waitrose recognizes the importance of engaging with local communities.  Waitrose has always donated a proportion of its profits to charities but its challenge has often been in having consumers value this philanthropy.  Its Community Matters scheme, launched in 2008, tackles this challenge in a smart way. The scheme gives each branch £1,000 to share out between three local good causes each month. Customers vote for their preferred cause using a green token they receive every time they shop and the money donated to each cause is directly proportional to the tokens they receive. I’m always amazed at the time consumers spend to choose the charity they will give their token to – surely a reflection of how engaged they are versus traditional approaches.

How About…

  • Involving consumers in decisions to increase their engagement?
  • Making strategic decisions around what type of social impact will be most valued for your business, e.g. local or global?

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here’s the collection box in my local Waitrose – I’m always intrigued to see which charities shoppers prefer…  I also wonder if people tend to default to other shoppers’ choices (and fill the most full section) or try to support the underdog…

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