A great American underdog makes a comeback: CMO transforms Arby’s into a QSR leader

Photo credit: Arby's

Image credit: Arby’s

You may have seen Arby’s recent initiatives, like the spontaneous Pharrell Arby’s hat, the Jon Stewart farewell, the Ving Rhames “We Have the Meats” and the daring Vegetarian Hotline. But before that, Arby’s national brand presence was relatively small, and Arby’s was “considered an underdog in the QSR (Quick Service Restaurants) industry,” said Rob Lynch, chief marketing officer of Arby’s.

So how did Lynch, who is now in his fourth year as Arby’s CMO, take an outdated brand and make it so hot that it claims a growth rate more than twice as fast as most of its competitors? It started with building the right team of talented people and creating a culture of risk-taking that engages customers. Here is how Lynch did it.

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Rob Lynch, CMO of Arby’s

Q: Rob, why did you join Arby’s?

With my former roles at P&G, Heinz and Taco Bell, I had built a foundation in marketing discipline, P&L management, general management skills and innovation. And I knew I loved a work-hard, play-hard environment. The opportunity to have holistic brand ownership at Arby’s and to really effect change got my attention, along with the inspiring vision of Arby’s newly appointed CEO, Paul Brown.

The Arby’s brand had lost its focus. It was very fragmented and heavily driven by local franchisee input, rather than reinforcing a consistent brand. It needed a menu overhaul and a new marketing vision.

One thing that we realized early on was we had to take on big, calculated risks to change the game — risks that more established competitors, who were outspending us 10 to one on marketing, were unwilling to take.

“The world has changed. We don’t own the conversation about our brand anymore. We need to participate regardless of the message to inspire customers and prospective customers.”

Q: What did you tackle first?

First we had to get the food right. Quality and flavor had been depleted through cost-cutting measures — take a bit of protein off here, replace this ingredient, make it smaller. I hired a food development leader to get the menu right. Once we did that, the marketing flowed from there.

While the menu revamp was underway, we built a social listening capability. When I joined, we had just one person running social from their laptop. We needed to go beyond just posting stuff for the sake of “being social.”

We luckily got our first big win just from being tuned in when we saw Pharrell wearing an “Arby’s hat” at the Grammys! We quickly sent a tweet to Pharrell, and our conversation went viral.

pharrell-iconic-hat

We were energized by the buzz and the media value it created and thought, “How can we get more of that?” It was purely organic, but we needed to figure out how to replicate the impact. So we set up an infrastructure to handle those opportunities by reallocating people to the social media team and linking social and PR more. This allowed us to fight above our weight class and be able to become a part of the national conversation.

Finally, we needed to find a way to turn our efforts from local to national, as there was a ton of fragmentation across the markets. I knew this would take time and effort, since we needed alignment from franchisees, as well as internal marketing.

We had a large enough footprint to move to a national model that would be more effective and efficient and would enable us to support the franchisees that couldn’t afford local marketing.

Q: How did you get the alignment across franchisees and the organization to move from a local model to a national model?

The structure of the business when I joined was indicative of the business at the time — a fragmented, locally driven model. We had a local field-driven team and a local media team, with resources spread across different markets. We needed to bring together these resources and leverage our national footprint for media buying and agency spend.

At the same time, we needed to create a testing and validation model that was less reactive to the opinions of company executives and more driven by our customers.

We piloted national campaigns and built up proof points over time. We started breaking into conversations happening about our brand already, which was something other brands seldom do.

For instance, Jon Stewart kept poking fun at Arby’s, so rather than send a cease and desist letter, which wouldn’t matter to anyone, we decided to play along. We sent Jon and his team lunch and we thanked him for featuring us on his show, and we sent a video compilation of all his jabs the day before he retired from “The Daily Show.” This really went against the traditional marketing philosophy to protect your brand at all costs.

The world has changed. We don’t own the conversation about our brand anymore. We need to participate regardless of the message to inspire customers and prospective customers.

note-to-jon-stewart

We also created the Vegetarian Hotline. We know we’ll never be on PETA’s Christmas card list. We won’t be where vegetarians eat. So we decided to have a little fun.

I must admit, this one made me very nervous, but the results were phenomenal and bolstered our relationship with our meat-loving core guests. I’ve learned that the nervousness you feel the moment before something happens is often a predecessor of some of the best moments in life.

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After a few of these wins, our franchisees voted unanimously to shift dollars from local to national marketing. So we scaled down local teams and shifted those resources to national marketing platforms — TV, digital, social, activation, public relations, etc.

We moved from three national programs to four, then six last year, to eight this year. Next year we’ll do 10. We are now one of the fasting-growing restaurant compan[ies] in the industry with more than double the average industry growth. And our average restaurant revenue has gone from $880K in 2013 to $1.15M today.

“If you are not nervous about the work you’re doing, you’re not going to do great work.”
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Q: What was hard about the change?

Building initial credibility. We had to convince the franchisees that they themselves may not be our main consumer, who is disproportionately males earning less that $75K per year.

To do that, we put a process in place that is data-driven, rather than opinion-driven. We tested everything and were completely transparent with our results. We told our stakeholders that we were shooting for a 50 percent hit rate. If you stay true to testing and transparency, every time you share even the failures, you build credibility.

As we continued to deliver success, the CEO kept adding dollars to the marketing budget, and the franchisees not only kept participating, but started funding campaigns with their own dollars. The tipping point came in 2014, when the campaigns returned six percent in revenue growth. From that point on, our team and the franchisees began working together much more closely and have continued to drive great results.

“If you stay true to testing and transparency, every time you share, even the failures, you build credibility.”
[Tweet this quote]

Q:  What do you look for in your marketing leaders?

My role is to be a general manager overseeing other great marketing leaders, so it was critical to get the right leaders in place from the start. I needed folks who could operate independently and keep me informed, but not require my constant input to get their jobs done. And in return, I needed to learn to let go of “control” so they could be free to come up with great ideas and execute them from concept to implementation.

My main objective in getting involved is the role of key stakeholder, ensuring that the ideas remain in line with the overall company vision.

Equally important is passion. I need everyone on the team to think big, and to do that, my leaders need to be as passionate as I am about growing the business. We believe it doesn’t matter where good ideas come from; everyone works together to support and deliver. I’m proud to say that our employee retention rate is 96 percent.

Q:  How do you assess if new hires are going to be a good fit?

I look for three critical competencies: functional expertise, strategic thought leadership and the ability to work collaboratively in teams. By the time candidates get to me, I know they’ve already been vetted for functional competency, so I look for strategic skills and cultural fit.

On the strategic skills assessment, I share with candidates a specific business challenge we are facing which may or may not have anything to do with their potential role.

For instance, I’ll ask them how we should resolve long-term innovation objectives or how to create more accurate near-term forecasting. Ideally, they will ask me great questions to gather additional information. You can tell a lot about someone’s business acumen in an hour if you actually ask them real business questions.

On the cultural assessment, I need to know if they are going to be a culture contributor or a culture killer. I ask about what they like to do outside the office. I ask about their five-year goals. I look for transparency and sincerity, which are signals that people will be open to feedback from peers and the type of folks we’ll enjoy working with as part of a close-knit team.

“I need everyone on the team to think big, and to do that, my leaders need to be as passionate as I am about growing the business.”

Q:  So what’s ahead for Arby’s?

More of the same, but even bolder. Our customers come to us for lunch, which is their one escape for the day. We want to not only deliver them a great experience in that one moment, but we want them to engage with our brand outside the restaurant.

It’s what drives our “We Have the Meats” campaigns and our latest idea of sponsoring professional golfer Andrew Johnson, whose nickname is Beef. We know that golf isn’t exactly a perfect match to our target audience, but who better to sponsor someone named Beef other than the meat guys? It’s authentic, and that’s what gets people talking!

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Professional Golfer Andrew Johnson nicknamed “Beef”

Takeaways

  1. If you want a team that will take ownership and get excited about risky moves, let go of the reins and become their supporter vs. gatekeeper.
  2. Embrace nervous moments, since they can be precursors to your greatest successes.
  3. When you’re the underdog in your industry, hire people with the DNA to creatively leapfrog the competition, not follow the industry norms.
  4. Never assume there isn’t a way when it appears you are outspent and overshadowed — there is always a way!

Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.


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