Loyalty 2.0 with Wendy's/Arby's CIO

By Abigail A. Lorden | March 03, 2009

If you've never dipped a French fry into your Wendy's Frosty, go ahead and give it a try. The combo is "crazy delicious" according to the 164 fans who've found each other in a Facebook group dedicated to the salty-sweet indulgence. And there are thousands more customers touting the taste combination (along with dipping chicken nuggets or Jr. Bacon Cheeseburgers) in the more general Frosty fan group, with a following that's 255,000 strong, and growing.

Those 255,000-plus fans (along with the company's four to five million daily customers) represent significant potential to build loyalty through new communication channels. 

"I think it's clear that, when a group forms around Arby's curly fries or dipping your fry in a Wendy's Frosty, and we didn't start those groups, the next question should be: "What could we do if we did start that group, and people gave us permission to talk to them about our products?'" explains Don Zimmerman, CIO. Zimmerman leads the IT initiatives at Wendy's/Arby's Group (www.wendysarbys.com), which following a merger of the two brands in late 2008, is now the nation's third-largest quick-service restaurant company.

With more than 10,000 owned or franchised restaurant locations, the possibility to connect with customers in new ways has significant appeal to Zimmerman. "I think there's a lot of potential there as we start to explore what it can yield in the way of new business or enhancing the relationship with existing customers," says Zimmerman. "When they come into our restaurants, they're not usually just shopping. They're there to buy."

Though Zimmerman admits that many of the trends associated with Web 2.0 tech appeal more to his children's generation than to his own, this gap is shrinking. Facebook reports that its fastest growing demographic is age 30 and over, and more than half of its 150 million active users are not part of the college-age crowd. The 75 million that are college-age fit nicely into the core demographic for quick-service restaurants.

New mediums, big potential
The potential for social networking to build customer loyalty far surpasses more traditional methods of marketing. "Is social networking starting to take the place of some television time?" Zimmerman asks. "If that's the case, what could this mean to advertising and reaching people in a broad sense?" Simply put, 255,000 fans of the Frosty, and then some. "But it also brings an entirely different dynamic than broadcast advertising ever possibly could, and that's the much more targeted and special-interest aspect of these particular sites and technologies. You can find a group or set up your own group, and attract people into just about anything that they might want to be a part of," he says.

Social media is also chock-full of information about what potential guests like, such as their favorite foods, when they like to dine, etc. If restaurants can tap into that information by meeting customers where they hang out (on Facebook, Second Life and other networking sites), they can create a bridge for the next time that guest walks into the store. "If I know how you like to interact with us, we could potentially tailor your experience to that knowledge of you and the relationship we've established."

Looking ahead, Zimmerman suggests that personalized greetings could offer information with targeted offers; perhaps a special coupon for a Frosty and fries. As for communication mediums, these could include sending a personalized message to a mobile phone or in-store digital display, or recognizing a guest via the signature on their personal wireless device, or via a loyalty card program. Once the restaurant knows who you are, the checker can also know what you might like to order.

Zimmerman explains: "We touch a lot of customers a lot of times, and we have information about that. If we can turn that into personalized information and then connect with you where you are, at a social networking site, for example, we can then leverage that relationship when you come back to us to create an even better experience. What would that do to our industry? It would open up a tremendous set of possibilities to interact with customers in multiple ways: on their cell phones, personally in the restaurant, having their orders, having their favorites, being able to speed the transaction if it's what they always order, or simply by having them feel a little better because they know we appreciate them."

Taking the connectivity piece to the next level, Zimmerman points to two key technologies that could have a significant impact on the way that restaurants interact with their customers, particularly if combined with social networking: cell phones/PDAs and digital signage.

Digital display boards, in particular, have the potential to leverage personalized information to create a unique guest experience. "There's a lot of potential to influence customers that are already in the restaurant or approaching the drive-thru and provide them with messages that are not only timely, but maybe even targeted," says Zimmerman. These messages could be related to what's going on in the restaurant, special offers, advertising partners, or possibly even weather information. "There are a lot of things you can do with that no-longer-static sign."

The inhibitor to digital signage has traditionally been price, but costs are dropping. Once those costs come down to justify the cost-benefit, Zimmerman believes it's likely that digital display boards will become common practice in the QSR segment.

When it comes to guests' personal wireless devices, Zimmerman sees multiple applications, ranging from mobile/web ordering to targeted messaging. He offers one caveat, however, particularly as it applies to the quick-service segment. "The challenge in a fast food environment is, how accurately can you connect that customer's arrival with the readiness of your food, and does the shelf-life of your product give you enough leeway to make that happen? If fries are cold because they were five minutes off in their arrival estimation, that's not a good thing."

Overcoming 2.0 fears
Some hospitality operators have gone awry in leveraging Web 2.0 by attempting to control the message. Taking a traditional media approach here just won't work. "If you're reaching your customers, in the media sense at least, through television commercials or coupons, then you control all aspects of that," says Zimmerman. "Now, consumers can put their own media out there and generate a lot of buzz if it catches on. If we're still thinking, as companies, that we can control the message out there completely, in today's technology world I don't think that's true."

Connecting isn't about control, explains Zimmerman. It's about building relationships. "I don't think about social networking as hosting a site on our space. I think it's going to where [potential customers] already are and being a part of their community."

For those operators that haven't yet gotten over the TripAdvisor fear, concerned that entering the social media realm will open up the possibilities of unbridled feedback and possible negative content, Zimmerman counters that, in today's connected world, consumers can do that anyway. "Staying away from the media where they're hanging out doesn't stop that. In my mind, it's better to be there and help encourage the positive side of it. You ought to join it versus thinking that you can control everything."

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