Have you ever eaten at Chipotle’s? If you have, you know it’s not in the same league as Citronelle here in DC or Gramercy Tavern in NY, but for fast food it’s not bad. In fact, it’s pretty good compared to its competition (Taco Bell, McDonalds, Burger King, etc.). And the proof of their strategy is in the pudding (or make that the burrito :-). Last year, same store sales grew by 13.6%, its stock price tripled since their IPO last January (of ’06) and it was recently ranked fourth among 2400 brands.
However, one of the tenants that makes this story so compelling is that Chipotle’s doesn’t spend a whole lot of money on advertising. In fact, they only spend about 1% in traditional advertising with mainstream media. So, how can an upstart company grow from one store in 1993 to 573 in 2007 when they don’t spend a whole lot of capital on advertising? Answer: it all begins with quality.
Chipotle’s founder, M. Steven Ells, was a graduate of the Culinary Institute of America and trained in haute cuisine. So, for him, when he founded a fast food restaurant in Denver in 1993, it was all about the quality, freshness and simplicity of the food–first. In other words, like any good chef it was all about the food (the product). Then once he got the food part down, he needed a marketing strategy.
Strapped for cash, he knew he couldn’t afford to spend a lot of money on ads. So, the next logical thought was that he needed to win customers over by the food. But how do you win people over with the food if they haven’t tasted your food? Answer: you give it away. You let them sample it. And not just a little sample (like in a food court), you let them have the whole burrito (or enchilada, or whatever phrase you prefer). And to this day, this is still their primary marketing strategy. In fact, last summer in downtown Manhattan, Chipotle’s gave away 6,000 burritos in one afternoon–hoping to continue to win new customers over with the quality of their food (meaning fast food). And they did.
In other words, Chipotle’s made a decision early on that the way they were going to grow was to by word of mouth–not by advertising. In that way, they were (and are) remarkable. In fact, the way I heard about Chipotle’s several years ago was through my brother remarking to me, "Have you tried Chipotle’s yet? It’s incredible. You’ve got to try it. You’ll love it."
Unfortunately, my observation has been that far too many companies and organizations are prone to the opposite practice. They’re willing to grow by investing heavily in advertising and hoping that the quality will arrive in time (if ever). They’re intent on convincing us that what they have is worth us giving up value for, but when we do, we’re often left wanting (whether it’s a restaurant or a church, a web company or a retail outlet, a hospital or a membership organization).
The better option is to adopt the saying, "The invitations don’t go out around here, until the quality goes in." I’m not talking about perfection, but quality. Because when the quality goes is in first, when our customers/members/clients partake in what we’re offering, they’re experiencing something worth remarking to others about, "Hey, you’ve got to check this out." It worked for Chipotle’s. I’m confident, it’ll work for you as well. Put the quality in first, then give it away (whether it’s a product, information or a service).