Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #521: Leaders in Customer Loyalty: Brand Stories | How Schlotzsky’s Deli is Returning to its Roots While Also Focusing on the Future

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#521: Leaders in Customer Loyalty: Brand Stories | How Schlotzsky’s Deli is Returning to its Roots While Also Focusing on the Future · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:02
  SPEAKER_00: Good afternoon, good morning.
• 0:03
  SPEAKER_00: Mark Johnson from Loyalty360.
• 0:05
  SPEAKER_00: Hope everyone's happy, safe, and well.
• 0:06
  SPEAKER_00: It's a Thursday, so another edition of our brand stories.
• 0:11
  SPEAKER_00: The fast catch a restaurant market has exploded over the past decade as diners look for elevated food options without sacrificing value.
• 0:19
  SPEAKER_00: This is something that we've talked about quite often recently.
• 0:22
  SPEAKER_00: As the category becomes more crowded, competition for customer loyalty has intensified.
• 0:27
  SPEAKER_00: Brands work to meet customers' growing expectations, especially younger customers' growing expectations around convenience, experience, and personalization.
• 0:37
  SPEAKER_00: Success today requires more than innovation, as we know.
• 0:40
  SPEAKER_00: It demands staying true to the authenticity of the brand and the values that brand has built through customer trust.
• 0:47
  SPEAKER_00: For brands operating in hundreds of locations with a larger restaurant portfolio, that challenge can be even greater.
• 0:54
  SPEAKER_00: Personalization is no longer optional, yet delivering it consistently at scale is the challenge.
• 1:01
  SPEAKER_00: The brands that use technology to enable human connection, not to replace it, focusing on small but meaningful moments like how guests are welcome when they walk into a restaurant that can drive engagement and loyalty.
• 1:15
  SPEAKER_00: These customer first touch points are very important.
• 1:19
  SPEAKER_00: That combined with a strong brand storytelling, such as bringing back the deli to Tlaxities, create differentiation and emotional connection in a crowded market.
• 1:29
  SPEAKER_00: Today we're going to hear from Donna Warner.
• 1:31
  SPEAKER_00: She's the chief brand officer at Tlaxties Delhi on how brand balances the how Micro Brand balances the scale with authenticity to create loyalty driving experiences.
• 1:44
  SPEAKER_00: Donna, thank you for taking the time to join us today.
• 1:46
  SPEAKER_00: How are you?
• 1:47
  SPEAKER_01: I am doing great.
• 1:48
  SPEAKER_01: How are you?
• 1:49
  SPEAKER_00: I'm doing well, thank you.
• 1:51
  SPEAKER_00: Uh to start, can you give us a brief introduction to Schlotsky's deli?
• 1:55
  SPEAKER_00: You know, how was the company started?
• 1:57
  SPEAKER_00: You know, when and why was it started?
• 1:58
  SPEAKER_00: Uh, would love to know a little bit more about the background.
• 2:01
  SPEAKER_01: Sure.
• 2:01
  SPEAKER_01: Uh the company started in 1971 in Austin, Texas.
• 2:05
  SPEAKER_01: Um, it was started by a couple.
• 2:07
  SPEAKER_01: They they made up the name, Schlotsky's.
• 2:10
  SPEAKER_01: So a lot of times people will ask, was that was that the founder's name?
• 2:14
  SPEAKER_01: Nope.
• 2:14
  SPEAKER_01: Um, they said, hey, we've got this funny name, but they made a very serious sandwich.
• 2:20
  SPEAKER_01: And that very serious sandwich is the original.
• 2:23
  SPEAKER_01: It's still on the menu today.
• 2:25
  SPEAKER_01: And um it was based on the muffaleta.
• 2:27
  SPEAKER_01: So it's got olives and a lot of delicious meats, but it is grounded in our sourdough bread.
• 2:34
  SPEAKER_01: And so that is how Schlosski's deli started.
• 2:37
  SPEAKER_01: And we have been delivering flavorful sandwiches and um deli sandwiches, bountiful pizzas, and um today we're launching subs across the entire system.
• 2:51
  SPEAKER_01: So cold subs as well.
• 2:52
  SPEAKER_01: And all our sandwiches before this were always toasted.
• 2:56
  SPEAKER_01: Toasted in the morning.
• 2:57
  SPEAKER_01: And so today, big sub launch.
• 2:59
  SPEAKER_00: Uh so when you look at uh the sub launch, what what uh kind of brought that into being?
• 3:05
  SPEAKER_01: Well, we also are big into catering.
• 3:08
  SPEAKER_01: So the brand, not only are we serving guests, you know, at the restaurant, but we're serving them in catering.
• 3:14
  SPEAKER_01: And a lot of um folks get to know us, you know, through catering.
• 3:19
  SPEAKER_01: But catering toasted sandwiches sometimes is a little bit more difficult, and there was a big demand from consumers for cold sandwiches.
• 3:27
  SPEAKER_01: And so we brought in um new white and wheat hoagie bread, and we are launching our new cold solved line today.
• 3:37
  SPEAKER_01: And it also gave us some bread optionality.
• 3:39
  SPEAKER_01: So, what we were learning is while our sourdough is delicious and very tasty, and it's great toasted on those toasted sandwiches, the guests really wanted to um have some variety on the menu.
• 3:52
  SPEAKER_01: And so that's part of our evolution is helping provide that to our guests.
• 3:56
  SPEAKER_00: Okay.
• 3:57
  SPEAKER_00: You talked about the background, Schlosski's uh kind of a made-up name.
• 4:01
  SPEAKER_00: You know, when you look at uh the success it's had, you know, what's what's led to success, you know, who who are the the customers generally and how do you kind of engage them?
• 4:10
  SPEAKER_01: Yeah, so you know, over the years the brand has done a lot of changing.
• 4:15
  SPEAKER_01: And over the last two years since I've been with the brand, we've really looked into who are our guests, why do they come to us, and how are we going to make them come to us more frequently.
• 4:24
  SPEAKER_01: Um and so that's a great question.
• 4:26
  SPEAKER_01: And what we found out is our guests are uh we're about 50% men.
• 4:31
  SPEAKER_01: They um the other 50% would be women then.
• 4:35
  SPEAKER_01: And so, but we um we also appealed to some older guests that have known the brand since the beginning, but we really cater to a lot of millennials.
• 4:44
  SPEAKER_01: And it's people that are on the go, hardworking folks.
• 4:48
  SPEAKER_01: Um, a lot of them have children.
• 4:50
  SPEAKER_01: And so while they and they're coming to us predominantly at lunchtime right now.
• 4:55
  SPEAKER_01: So that's who our guest is and um and our core customer, and they like us, and the reason they come to us, they've known us whether from when they were children, you know, coming with their family, um, but they've always known us as a deli.
• 5:10
  SPEAKER_01: And even though we've been through a lot of change and even removed that deli name for a while, um, when we dug into it, they still called us Schlotsky's Deli.
• 5:20
  SPEAKER_01: Uh, they know us for these big, flavorful, bountiful sandwiches.
• 5:26
  SPEAKER_01: And um, that's why we're leaning back into the deli heritage and and being true to who we are.
• 5:32
  SPEAKER_01: And and that's um that's the appeal for the guests.
• 5:36
  SPEAKER_01: They find something unique at Schlotsky's.
• 5:39
  SPEAKER_01: We're just a little bit different, whether it be our bread, how we build our sandwiches, the toasting.
• 5:44
  SPEAKER_01: Um, and then get this we're a deli that serves pizza and calzones.
• 5:50
  SPEAKER_01: So you don't find that every day either.
• 5:53
  SPEAKER_01: So we're we're in a unique little deli, Schlotsky's deli.
• 5:57
  SPEAKER_00: I didn't know you guys had pizza.
• 5:58
  SPEAKER_00: I've been there a number of times.
• 5:59
  SPEAKER_00: I did not know you had pizza, so that that's good to know.
• 6:01
  SPEAKER_01: Yeah.
• 6:02
  SPEAKER_00: When you look at your role within the company, uh, you know, how did you get to where you are today?
• 6:07
  SPEAKER_00: What do you do on a day-to-day basis as the chief brand officer?
• 6:11
  SPEAKER_01: Yeah, well, the way I got here at GoToFoods is one of my previous coworkers actually called and said, Schlosski's really needs you.
• 6:20
  SPEAKER_01: I had been with McAllister's Deli before.
• 6:23
  SPEAKER_01: And they said, Schloskies really need you.
• 6:25
  SPEAKER_01: You know, they they need to rebrand and they need to get back to their roots and do some great menu innovation.
• 6:30
  SPEAKER_01: And I said, I will accept that challenge.
• 6:32
  SPEAKER_01: And I have come up my entire career, starting with Chick-fil-A and then brands like Wendy's.
• 6:38
  SPEAKER_01: I mentioned McAllisters, but my entire career I've been in marketing.
• 6:42
  SPEAKER_01: And so I really have a heart for that.
• 6:44
  SPEAKER_01: But in marketing, you know, you always have a heart for the guest and the consumer, um, building that consumer loyalty, finding out what makes your consumers tick and what's going to make them come back to you more often.
• 6:56
  SPEAKER_01: And so when I heard about where Schlotsky's was in their life cycle, I thought this is the perfect place for me to come in and really dig into, I call it the archaeological dig.
• 7:07
  SPEAKER_01: I love to dig through the history of this brand and find out what the guests love, what makes them tick, what makes them, what would make them want to come more frequently.
• 7:17
  SPEAKER_01: Um so as we were rebranding, I I just really, you know, I kind of geek out on the on the studying of the consumer and then how to build a menu and loyalty programs that are going to appeal to those folks.
• 7:31
  SPEAKER_00: Okay.
• 7:31
  SPEAKER_00: When you look at the anthropology of the brand, what did you see when you did that research?
• 7:36
  SPEAKER_00: We'd love to know that.
• 7:38
  SPEAKER_01: Yeah, well, I mentioned a little bit of it earlier when folks unprompted would call it Delhi.
• 7:44
  SPEAKER_01: And um, I've told this story before, but I'll tell it again.
• 7:48
  SPEAKER_01: I, as we were doing all this guest research, which was formal research, I got caught um in a town, small town, McAllen, actually.
• 7:56
  SPEAKER_01: I couldn't get my flight to Austin, and I ended up in a planes, trains, and automobile situation with a car full of about five to six people.
• 8:03
  SPEAKER_01: And we started sharing, you know, driving ourselves to Austin at between seven and one o'clock in the morning in this storm.
• 8:11
  SPEAKER_01: Anyway, we started telling stories about where we worked, and uh one of the people said, Schlotsky's, I love Schlotsky's deli.
• 8:19
  SPEAKER_01: I've been going to Schlotsky's Deli since I was a kid, and every single person in that car knew Schlotzki's because they were Texans, and but they all called it Schlotsky's Deli.
• 8:28
  SPEAKER_01: So one of the things that we found out is even though the brand has had a lot of names and we've dropped deli over the years, we found out that we had a deli heritage.
• 8:37
  SPEAKER_01: That was one of the things.
• 8:38
  SPEAKER_01: Um, and some of the other things we found out are why guests come to us so so much, and those that love us why.
• 8:44
  SPEAKER_01: And it's the flavors.
• 8:46
  SPEAKER_01: Again, that sourdough bread.
• 8:48
  SPEAKER_01: Um, our sandwiches are very bountiful.
• 8:51
  SPEAKER_01: We have a sandwich that's called the giant.
• 8:53
  SPEAKER_01: It is bigger than your head.
• 8:54
  SPEAKER_01: It's bigger than my head.
• 8:56
  SPEAKER_01: It is a giant, it truly is a giant sandwich.
• 9:00
  SPEAKER_01: Um when I went through trading, I love to go see when somebody would order a giant.
• 9:04
  SPEAKER_01: Who is this person?
• 9:05
  SPEAKER_01: I expected a giant person.
• 9:07
  SPEAKER_01: Not really.
• 9:08
  SPEAKER_01: Sometimes people are just buying those sandwiches, they're dividing them into fours and feeding a family.
• 9:12
  SPEAKER_01: So large portions, great big flavor.
• 9:16
  SPEAKER_01: That is what we're known for.
• 9:17
  SPEAKER_01: And that's what we were hearing from the guests is we're unique in those areas.
• 9:22
  SPEAKER_01: Big flavors, big portions.
• 9:25
  SPEAKER_00: Okay, awesome.
• 9:26
  SPEAKER_00: And when you look at your role, you talked about some of the things that you've done.
• 9:28
  SPEAKER_00: You're obviously coming through Wendy's and Chick-fil-A and others have a great lineage there.
• 9:32
  SPEAKER_00: When you look at the role today, you know, what is the biggest challenge or potentially even the biggest opportunity you face in your role as a chief brand officer?
• 9:41
  SPEAKER_01: Sure.
• 9:41
  SPEAKER_01: It is gr it is really driving unit-level economics for my franchisees.
• 9:45
  SPEAKER_01: It's, you know, the restaurant industry right now is challenged with rising costs, rising labor costs, um, occupancy costs.
• 9:53
  SPEAKER_01: And so it's making sure that we are driving traffic, we're driving profitable sales for those franchisees, but also that we're building a model for franchising and for our potential new franchisees for growth.
• 10:06
  SPEAKER_01: And that model really needs to be a new prototype that helps dive in to where the consumers are today and deliver digitally in all the ways that they want to interact with the brand, whether they want to sit down or whatever.
• 10:22
  SPEAKER_01: And it's it's really giving those franchisees the opportunity for growth through menu development, new prototype, and the proper branding to make sure that we're continuing to drive those profitable sales.
• 10:34
  SPEAKER_00: Okay.
• 10:35
  SPEAKER_00: You mentioned uh a little bit about uh the industry changing, having to deal with costs rising, potentially uh turnover can be a big challenge within the industry as well, based on other interviews we've had.
• 10:47
  SPEAKER_00: When you look at your industry, uh, you know, how how do you see it changing?
• 10:52
  SPEAKER_00: Uh a fast casual, uh you know, how do you see it changing?
• 10:56
  SPEAKER_00: How are the customers changing?
• 10:58
  SPEAKER_01: Mm-hmm.
• 10:59
  SPEAKER_01: Yeah, you know, it's funny.
• 11:01
  SPEAKER_01: I say that this is this is a way that we see it changing.
• 11:04
  SPEAKER_01: I mean, convenience has always been a big part of the restaurant industry.
• 11:09
  SPEAKER_01: And but now I think it's more table stakes.
• 11:12
  SPEAKER_01: You have to provide all the convenience.
• 11:14
  SPEAKER_01: I think back to early in my career, um, and I don't want to say just how ancient I am, but you know, we were we were how can we get the fastest drive-thru?
• 11:23
  SPEAKER_01: And how could Chick-fil-A, you know, we got to get from the time they order till the time they drive away, you know, can we be under 60 seconds and ringing bells and so excited about that convenience?
• 11:33
  SPEAKER_01: And then fast forward to today, convenience has always been king, but now convenience comes in all this digital footprint, and and the guests have so many options.
• 11:44
  SPEAKER_01: They can order through third party, they can order through your first party channels, they can order it to be delivered, they can order it to be picked up, or they can come in, order ahead, and sit down in your restaurant.
• 11:55
  SPEAKER_01: And I'm sure that there are many other ways.
• 11:57
  SPEAKER_01: I just mentioned catering.
• 11:58
  SPEAKER_01: They can order it on our website, have it delivered for a large group.
• 12:02
  SPEAKER_01: So convenience has really changed and it's changed the way the restaurant industry, you know, has to take care of our guests.
• 12:10
  SPEAKER_01: And um I would say those are the baseline expectations right now is making sure that we are creating that frictionless experience, whether it's through our digital channels or whether it's how they interact with us when they come into the restaurant.
• 12:23
  SPEAKER_00: You mentioned frictionless, right?
• 12:25
  SPEAKER_00: That's a term that everyone uses uh quite, most everyone uses it quite often, right?
• 12:29
  SPEAKER_00: Uh just to make it as easy and seamless with customers to interact with you.
• 12:33
  SPEAKER_00: You talked about some of the customers are changed, but uh, traditionally or oftentimes, brands struggle with listening to and understanding their customers.
• 12:41
  SPEAKER_00: You know, how are you able to respond so effectively to some of the changes that you're seeing or being asked for?
• 12:48
  SPEAKER_01: Right.
• 12:48
  SPEAKER_01: Well, we're at GoToFoods, as we are enhancing all of our digital platforms, we are looking at our digital OSAT on a weekly basis.
• 12:57
  SPEAKER_01: So we're able to dial in and find out where the friction is happening.
• 13:01
  SPEAKER_01: Is it happening because we're not fulfilling the order correctly?
• 13:04
  SPEAKER_01: Is it happening in other areas of the of the customer journey?
• 13:08
  SPEAKER_01: And so that's one area where we look at.
• 13:10
  SPEAKER_01: So not only taking care of that guest and making sure, hey, are we are we thanking them for their loyalty?
• 13:16
  SPEAKER_01: If they're a loyalty guest, we measure that as well.
• 13:19
  SPEAKER_01: Um, are we providing the right thing in their digital order?
• 13:23
  SPEAKER_01: You know, are we doing a great job when they're sitting in our restaurant?
• 13:25
  SPEAKER_01: So we look at the the overall satisfaction 360 to see how we're taking care of them.
• 13:30
  SPEAKER_01: And then obviously we have them reporting in.
• 13:33
  SPEAKER_01: And we have great relationships with our franchisees, and they tell us where they're hitting friction points.
• 13:39
  SPEAKER_01: A lot of times before that weekly data comes in.
• 13:41
  SPEAKER_01: Um, our great franchise uh performance leaders that are out in the field will say, you know what, we're really seeing a spike in this issue.
• 13:49
  SPEAKER_01: And so we're we've always got our finger on the pulse of what's happening.
• 13:53
  SPEAKER_00: So Schlotsky's recently launched a rebranding campaign where you brought back the Schlotsky's deli name.
• 13:59
  SPEAKER_00: And we talked about that earlier in the discussion.
• 14:01
  SPEAKER_00: You know, what was uh the kind of the thinking behind the movie, what was the impetus to do that?
• 14:06
  SPEAKER_01: Well, again, I'll take it all the way back to the guest.
• 14:09
  SPEAKER_01: As we were sitting there and doing a lot of the guest intercepts and then some of the consumer research, um, not only did we talk to guests that came to us all the time, but we talked to potential guests and what would make them come.
• 14:22
  SPEAKER_01: And it was interesting.
• 14:23
  SPEAKER_01: A lot of folks would be like, Schlotskis, I've seen that, but I have no idea what it is.
• 14:28
  SPEAKER_01: Right.
• 14:28
  SPEAKER_01: And there was um one particular guest that I'll I'll call out, and she said, you know what, I always thought that Schlotskis was a dry cleaner.
• 14:36
  SPEAKER_01: I had no idea they served food.
• 14:39
  SPEAKER_01: Um, and then one person said, I figured it was a bakery when I saw Cinnabon, because that's something else unique about us, is that we have uh Cinnabon Express bakeries in most of our Schlotsky's delis.
• 14:51
  SPEAKER_01: So what that triggered for us is we weren't on our even our buildings giving enough of a call out to the tasty goodness of Schlotsky's deli on the inside.
• 15:01
  SPEAKER_01: And so that was some of the impetus for us is to um to add the deli name back, get true to our to our roots, and make sure that whether it was as you drive by the building or whether you're looking at us on the website, you know that um we are definitely a deli and we're serving delicious sandwiches and pizzas.
• 15:22
  SPEAKER_00: That's awesome.
• 15:23
  SPEAKER_00: And a number of uh kind of restaurants, QSR, fast casual, they're all going through that uh not necessarily rebranding, but looking at that next generation customer loyalty, uh customer and customer loyalty, right?
• 15:36
  SPEAKER_00: But they're both a little different.
• 15:37
  SPEAKER_00: Some are doing it well, some are struggling a little bit.
• 15:39
  SPEAKER_00: So embracing your heritage is obviously very uh foundational.
• 15:43
  SPEAKER_00: It brings back uh kind of the the passion and the roots that you have.
• 15:47
  SPEAKER_00: But how do you balance that, the heritage and that next generation approach to the customers, to restaurant design, to to the value, convenience, some of the things that you talked about.
• 15:58
  SPEAKER_00: How do you how do you balance those?
• 16:00
  SPEAKER_01: Right.
• 16:00
  SPEAKER_01: Yeah, that's a great question.
• 16:02
  SPEAKER_01: And that's one of the things that we always struggle with is making sure that you know you don't want to alienate any of your existing guests.
• 16:09
  SPEAKER_01: And I think that's why we talk to both.
• 16:11
  SPEAKER_01: We talk to those existing guests, you know, what what is it that you love?
• 16:15
  SPEAKER_01: What are the table stakes?
• 16:17
  SPEAKER_01: And then we also talk to potential guests to find out, you know, why what would make you come to Schlosski's?
• 16:24
  SPEAKER_01: And in our new design and in our new rebranding, um, we really wanted to bring the colors and the energy of the brand to life, but at the same time, keep the comfort for those guests who love to dine in with us.
• 16:37
  SPEAKER_01: And so um we've we've really done that in some of the new branding work where we've said, look, this is we're being true to who we are.
• 16:45
  SPEAKER_01: Um, we're neighborhood, we're community, uh, but we also want to ease the friction, right?
• 16:51
  SPEAKER_01: So if we know now that people are coming in and they want to go through the line in order, make that seamless for them.
• 16:58
  SPEAKER_01: We've got kiosks now ready for them.
• 17:00
  SPEAKER_01: If they want to speed that along and don't want to talk to anybody, it's interesting.
• 17:04
  SPEAKER_01: I always like to have somebody take my order, but some folks don't want to talk to anybody ever.
• 17:08
  SPEAKER_01: And so we've got the kiosk right there for them.
• 17:11
  SPEAKER_01: Um, if they're in a hurry, we've put grab and go in so that they're going to be able in our new prototype just to grab what they need, whether it's a cold sub, a salad, a beverage, and get on their way.
• 17:24
  SPEAKER_01: Um, and then we've also got to skip the line completely.
• 17:27
  SPEAKER_01: You know, you go this direction with our signage and you can go pick up your order that you pre-ordered.
• 17:32
  SPEAKER_01: It's over here, and it'll show uh a to-go pick up line.
• 17:35
  SPEAKER_01: And that's also for our Uber Eats, DoorDash drivers and and favor drivers in um in Texas.
• 17:43
  SPEAKER_01: They can also skip the line so they can get on their way and make more money if they're delivering.
• 17:48
  SPEAKER_01: So we're really leaning into how we can take care of existing as well as new and potential guests.
• 17:55
  SPEAKER_01: And from a menu perspective, we're doing the same thing.
• 17:58
  SPEAKER_01: We're looking at, you know, we have some aspirational um consumer targets in our Gen Z market.
• 18:04
  SPEAKER_01: And we want to make sure that, you know, what is it that's appealing to them from a flavor perspective?
• 18:09
  SPEAKER_01: So we're looking at menu innovations and influencer campaigns to make sure that we're introducing them to our brand as well.
• 18:17
  SPEAKER_00: You've talked about customer loyalty a number of times.
• 18:20
  SPEAKER_00: You know, when you look at customer loyalty, it's always great to speak with those who are you know leading the brand, leading the customer loyalty, customer experience efforts to understand kind of what customer loyalty means to them and their brand.
• 18:30
  SPEAKER_00: So when you look at customer loyalty, you know, what does it mean to Schlotskis and to you personally?
• 18:36
  SPEAKER_01: Yeah, it goes it, there's two, there's two things.
• 18:39
  SPEAKER_01: There's obviously we have a loyalty app, and we've got about 15, somewhere between 15 and 20% of our consumers that are that are in that loyalty app.
• 18:49
  SPEAKER_01: And we like to recognize them and we even measure that.
• 18:52
  SPEAKER_01: Um we recognize those loyal guests that have taken the time to to interact with us that way across the counter.
• 18:59
  SPEAKER_01: We ask them, are you using your app today?
• 19:02
  SPEAKER_01: Um, we measure our our restaurants on that on that measure.
• 19:06
  SPEAKER_01: Um, but we also like to go a little something extra.
• 19:09
  SPEAKER_01: And if you're in restaurant and you're using the app, we like to surprise and delight them with, you know, here's a couple mini cookies.
• 19:17
  SPEAKER_01: Thank you for for your loyalty today.
• 19:18
  SPEAKER_01: And we recognize them differently.
• 19:20
  SPEAKER_01: Um, maybe also give some FOMO to those that aren't already in the app.
• 19:25
  SPEAKER_01: Right.
• 19:25
  SPEAKER_01: They don't get the little mini cookies.
• 19:27
  SPEAKER_01: Um so there's that aspect of it.
• 19:29
  SPEAKER_01: Um, and then, you know, for those that aren't in the app, we we continue to do our research and make sure that we understand um, you know, what's important to them as well.
• 19:40
  SPEAKER_01: And we're always doing consumer research.
• 19:42
  SPEAKER_01: But a lot of times you can find the representation within that, within that loyalty app.
• 19:47
  SPEAKER_01: You could see their consumer beh behaviors and patterns.
• 19:50
  SPEAKER_01: And I can give you an example.
• 19:52
  SPEAKER_01: Um we we knew that we needed to come up with some value plays at Schlotsky's.
• 19:58
  SPEAKER_01: And uh, even before we got the rebranding done, we do$5 pizzas on the weekends.
• 20:04
  SPEAKER_01: And um, our two entry-level pizzas, double cheese and pepperoni, are$5.
• 20:10
  SPEAKER_01: And then our premium pizzas are$7, which is still a big discount.
• 20:15
  SPEAKER_01: And so we we determined all that by looking and testing through our consumers in the loyalty app to find out um what would appeal to them, what would make them calm on the weekends, which was also a downtime for our restaurants, and and what would keep them coming more frequently.
• 20:32
  SPEAKER_01: We also could find out through that app that they didn't uh degenerate their weekday sales.
• 20:38
  SPEAKER_01: So it added incrementality for us and helped us be more relevant to our consumers.
• 20:44
  SPEAKER_00: Okay, excellent.
• 20:45
  SPEAKER_00: When you look at your customer loyalty program, the Schlosski's Reward Program, you know, can you tell us a little bit more about that?
• 20:51
  SPEAKER_00: Uh when it was launched, uh, how does it fit into that larger uh all-around customer loyalty?
• 20:58
  SPEAKER_01: Sure.
• 20:59
  SPEAKER_01: So the uh Schlosski's Loyalty app has been um there for the consumers since 2014.
• 21:06
  SPEAKER_01: So it's been around for quite some time.
• 21:09
  SPEAKER_01: And just this last year, it is a points-based program, so they do earn points for all of their visits.
• 21:15
  SPEAKER_01: This last year we um we did a new two-part signup offer.
• 21:21
  SPEAKER_01: And so we are trying to get more people to join us through the app.
• 21:25
  SPEAKER_01: And that two-part offer is you get a you get a discount after your first purchase, but then after your second purchase, you get a BOGO offer.
• 21:33
  SPEAKER_01: Um, because we've learned that you know, if we can get you back within that 30 days, and then again within that 60 days, you really start that repeat pattern.
• 21:42
  SPEAKER_01: And so while it's a point based program, there are some surprise and delights that we put in there.
• 21:47
  SPEAKER_01: There are some consumer loyalty only programs that we do throughout the year.
• 21:53
  SPEAKER_01: So one of those is one of our biggest days of the year is what we call guest appreciation day.
• 21:59
  SPEAKER_01: And And we offer BOGO for a year within the app and a four-pack of Cinnabons in December for you to gift or give to other people for just uh$29.99.
• 22:15
  SPEAKER_01: And it's over a$600 value that for$30 our guests can purchase.
• 22:20
  SPEAKER_01: And we have seen incrementality on that every year as well.
• 22:23
  SPEAKER_01: So there's special things we put within the app, and then there's also just the daily points.
• 22:29
  SPEAKER_00: Um that's awesome.
• 22:32
  SPEAKER_01: Yeah.
• 22:33
  SPEAKER_00: Uh when you look at uh your recent promotion, I think it was uh Life Needs Lots.
• 22:39
  SPEAKER_00: Uh they can talk a little bit of that from a positioning perspective, the brand ethos, uh, what it means, uh, what the campaign is, what what are you seeing coming out of the campaign?
• 22:50
  SPEAKER_01: Sure.
• 22:50
  SPEAKER_01: Well, and it's just launching.
• 22:52
  SPEAKER_01: So with our stack subs, life needs lots is launching today, actually.
• 22:57
  SPEAKER_00: Oh yeah.
• 22:59
  SPEAKER_01: But again, that goes back to the consumer um and all the research that we did.
• 23:04
  SPEAKER_01: And as we started to understand just the persona of our core consumer.
• 23:08
  SPEAKER_01: And I talked a little bit about these millennial parents and everything that they've got going on in their lives.
• 23:15
  SPEAKER_01: And, you know, they come to us during the day when they're working, they may come to us on the weekends for the pizza programs.
• 23:21
  SPEAKER_01: Um, but they are busy, busy, busy people.
• 23:25
  SPEAKER_01: And so what we were hearing from them is that the way we fit in is that we are we exist here to fuel their full life, you know, and so they interact with us depending on what's going on in their life in different ways.
• 23:38
  SPEAKER_01: They may be stopping in uh with the work crew to have a quick lunch.
• 23:43
  SPEAKER_01: Uh, they may be ordering online to have you know pizzas delivered.
• 23:48
  SPEAKER_01: Um, so we exist to fuel their full lives, and we know that their life needs lots.
• 23:53
  SPEAKER_01: The other thing that we heard from our guests is yeah, you got a funny name there, Schlotskis, and it's hard to say.
• 23:59
  SPEAKER_01: Um and in the past, Schlotskis had done some promotions around lots better.
• 24:05
  SPEAKER_01: And and we've also tried to do some things in the past where we got really cute with some of a with the name.
• 24:12
  SPEAKER_01: And the guests said, you know, some of that stuff isn't so cute.
• 24:15
  SPEAKER_01: You guys think it is, but it's not.
• 24:16
  SPEAKER_01: So so stop making up words.
• 24:18
  SPEAKER_01: But they gave us permission.
• 24:20
  SPEAKER_01: They said, we love it that lots is in the middle of your name.
• 24:23
  SPEAKER_01: And when you lean into that, um, some of the ad subs we did, our consumers said, that's actually fun.
• 24:30
  SPEAKER_01: And and we like it.
• 24:31
  SPEAKER_01: So that's why we leaned into it.
• 24:33
  SPEAKER_01: We exist to fuel their full life.
• 24:35
  SPEAKER_01: We know their life needs lots.
• 24:37
  SPEAKER_01: Life needs lots, life needs Schloskies.
• 24:40
  SPEAKER_01: So that's where we are.
• 24:41
  SPEAKER_01: And everything that we do with the brand, we put it up against that and say, are we pro are we um delivering on understanding that their life needs lots?
• 24:51
  SPEAKER_01: And are we understanding that we want to deliver on that full life experience?
• 24:55
  SPEAKER_01: So awesome.
• 24:56
  SPEAKER_00: Yeah, it's uh catchy, but it's also impactful, and uh it definitely helps uh the quirkiness, I think, uh kind of irreverent, is uh is is good to see.
• 25:05
  SPEAKER_01: Yes.
• 25:06
  SPEAKER_00: Well, when you when you look at uh the kind of engaging younger generations, we've talked about changing the format, changing uh the restaurant format a little bit and uh the offering and bringing back the deli part.
• 25:16
  SPEAKER_00: Um, you know, when you engage younger generations, uh many brands feel that it may take a little while longer to get them engaged, but once you do, they can be pretty significant advocates for the brand.
• 25:27
  SPEAKER_00: You know, how do you look at engaging younger audience and and you know, what's the game plan around that?
• 25:33
  SPEAKER_01: Yeah, I I think uh as we look, we like I said, we call that our aspirational target, those younger audiences.
• 25:40
  SPEAKER_01: And so through our menu innovation and and what we're doing right now with uh the Stack Subs launched, honestly, we have looked at and are using an influencer that's in a space that really appeals to some Gen Z consumers and who's a foodie.
• 25:56
  SPEAKER_01: And so we're gonna be bringing that forward.
• 25:59
  SPEAKER_01: Um, we're also looking at what are they like?
• 26:02
  SPEAKER_01: You know, is it is it pulling on some of the unique flavors?
• 26:06
  SPEAKER_01: They like to try new things.
• 26:08
  SPEAKER_01: We're also looking at new beverages.
• 26:10
  SPEAKER_01: Uh last year we launched lemonades, we're launching new lemonade flavors.
• 26:14
  SPEAKER_01: Um, it seems like the new aspirational audience for us, they really are getting out of the carbonated soda and they want to move always gonna have that.
• 26:23
  SPEAKER_01: So don't worry.
• 26:24
  SPEAKER_01: Carbonate soda, not going away.
• 26:26
  SPEAKER_01: Um, however, they're also looking for other healthier options and going back to that, fueling their life, um, protein options.
• 26:34
  SPEAKER_01: And so we're looking at menu innovation that's going to enable that and attract those consumers.
• 26:41
  SPEAKER_00: Okay, awesome.
• 26:42
  SPEAKER_00: Yeah, protein's a big thing right now.
• 26:44
  SPEAKER_00: It is.
• 26:45
  SPEAKER_00: You can never have too much protein.
• 26:47
  SPEAKER_01: Well, we we found that out.
• 26:48
  SPEAKER_01: We just we've been doing some social posts here recently where we're we're saying you don't need the bread, we could put it in a bowl.
• 26:54
  SPEAKER_01: And so louda, I mean, some of our sandwiches that have over 70 grams of protein.
• 26:58
  SPEAKER_01: Holy crap.
• 26:59
  SPEAKER_01: Like, is that legal?
• 27:00
  SPEAKER_01: And I guess it is.
• 27:01
  SPEAKER_01: So we we got we got a lot of protein.
• 27:05
  SPEAKER_00: Uh that's good.
• 27:06
  SPEAKER_00: Uh it's always good to have more protein.
• 27:08
  SPEAKER_00: And and and you know, I don't need a lot of bread, nor does my family.
• 27:11
  SPEAKER_00: So we'll have to come check it out and uh we'll keep the bread on the side, then that'd be great.
• 27:16
  SPEAKER_00: Yeah.
• 27:17
  SPEAKER_00: Well, when you look at uh uh the customer loyalty CX offerings, you you've obviously enhanced it pretty significantly.
• 27:24
  SPEAKER_00: You know, how how do you do that?
• 27:26
  SPEAKER_00: Does you have good support internally for the program?
• 27:29
  SPEAKER_00: Because many brands struggle with that, right?
• 27:30
  SPEAKER_00: Customer loyalty is a cost, we need to minimize it.
• 27:33
  SPEAKER_00: There's kind of a bifurcation right now, but it sounds like you may have pretty significant alignment around the program and in its ability to be a kind of fulcrum for the brand.
• 27:43
  SPEAKER_01: Right.
• 27:43
  SPEAKER_01: And we're lucky here at GoToFoods because we do have the platform and we have an entire group of people that help us with loyalty for each one of the brands here at GoToFoods.
• 27:54
  SPEAKER_01: And so we're able to measure the effectiveness.
• 27:57
  SPEAKER_01: Um, that team, the loyalty team, is able to help us with customer journeys that are appropriate for us, um, whether it's lapsed, frequent, infrequent, win-back campaigns.
• 28:09
  SPEAKER_01: Um, and so we're we're really lucky in that regard.
• 28:13
  SPEAKER_01: Also, our franchisees, we've had this uh program since 2014.
• 28:18
  SPEAKER_01: And we continually monitor, you know, what is the discount rate within the program?
• 28:22
  SPEAKER_01: Is the point system up to par?
• 28:24
  SPEAKER_01: We made some changes last year to the program that were good for the guests, but also good for the franchisee.
• 28:30
  SPEAKER_01: It has to be winning, it has to be a profitable program for them with not too high of a discount rate, correct?
• 28:36
  SPEAKER_01: So that these are actually still profitable consumers, both have to be winning.
• 28:41
  SPEAKER_01: So I feel very fortunate that we have the support here at GoToFoods with our uh loyalty team and customer engagement team is what we call them here in the building.
• 28:52
  SPEAKER_01: But also with franchisees that are are very good at taking care of our guests.
• 28:56
  SPEAKER_01: We have some of the highest OSAT scores of any brand that I've ever worked with.
• 29:01
  SPEAKER_01: Um, and a lot of that is due to their adoption of our programs, how they take care of the guests, how they recognize that loyalty guest, and um continue just to be to be um very good caretakers of the consumer.
• 29:15
  SPEAKER_00: That's awesome.
• 29:16
  SPEAKER_00: When you look at your uh program, uh, you know, what are two or three things?
• 29:20
  SPEAKER_00: Program, customer experience, the brand in general, what are two or three things you're most proud of when you look at the program?
• 29:27
  SPEAKER_01: Yeah, I would say I know that it's not the technical side of it, but the number one thing that I'm most proud of is the we call it the four walls piece of loyalty.
• 29:36
  SPEAKER_01: And while it's not the the digital side and the things that are being delivered, the people interaction, we haven't dismissed the fact that loyal and just put loyalty in the app.
• 29:48
  SPEAKER_01: And you know, hey, just let the digital take care of it.
• 29:51
  SPEAKER_01: What we've done is we've said, hey, there's four walls.
• 29:54
  SPEAKER_01: When people come into our four walls, let's recognize them.
• 29:57
  SPEAKER_01: Let's ask them.
• 29:58
  SPEAKER_01: I go back to those mini cookies that that most of our franchisees are giving.
• 30:02
  SPEAKER_01: It is a point of differentiation and that takes extra effort.
• 30:06
  SPEAKER_01: It takes extra effort from the crew.
• 30:09
  SPEAKER_01: They have to think about that in the morning.
• 30:10
  SPEAKER_01: They have to plan for loyalty guests coming in to make sure they give them those tasty mini cookies.
• 30:16
  SPEAKER_01: And so I think I'm most proud of that because our team has really put that extra effort in to make us a little bit more differentiated.
• 30:23
  SPEAKER_01: So that's one of the aspects.
• 30:25
  SPEAKER_01: I think the other aspect that I'm most proud of is our ability to change and to create programs like that guest appreciation day and to introduce our loyalty guests to our new products like the Stack Subs through our loyalty program and make sure that we are interacting with them and meeting them where they are and personalizing some of their journeys.
• 30:46
  SPEAKER_00: Okay, excellent.
• 30:47
  SPEAKER_00: Well, you know, what's next?
• 30:48
  SPEAKER_00: A customer loyalty, customer experience, uh big focus right now on AI and personalization, uh, clientelling, maybe.
• 30:55
  SPEAKER_00: You know, what do you see next uh as kind of a differentiator for Schlotsky's in this fast casual dining space?
• 31:02
  SPEAKER_01: Right.
• 31:03
  SPEAKER_01: I think for us, it you know, at Go and at GoToFoods, we are always looking at ways to either use AI or other things to make the guest experience better.
• 31:12
  SPEAKER_01: And so we have a focus on speed.
• 31:15
  SPEAKER_01: Uh, we have drive-throughs.
• 31:17
  SPEAKER_01: We want to make sure that our loyalty doesn't slow down our drive-throughs.
• 31:20
  SPEAKER_01: So the ops teams are always focusing on speed, we're focusing on accuracy.
• 31:25
  SPEAKER_01: Um, so we gave you more convenient ways, but how do we make sure that we are maintaining that accuracy level?
• 31:31
  SPEAKER_01: And then you mentioned it, the personalization.
• 31:33
  SPEAKER_01: How can we take personalization even further and really make sure that the guest knows that we get them?
• 31:40
  SPEAKER_01: And I think that's that's one of the things in my favorite programs that I always just makes you feel special, whether it's being recognized, like I talked about earlier when I'm in the four walls, or it's like, hey, you know, the grocery store knew that I buy that one special cheese and they offered me an offer on it.
• 32:00
  SPEAKER_01: It just feels like, you know, they get me.
• 32:02
  SPEAKER_01: Right.
• 32:03
  SPEAKER_01: So so focusing, focusing on those things that keep us a little bit more differentiated instead of just the plug and play.
• 32:10
  SPEAKER_00: Donegan, thank you very much for taking the time to join us today.
• 32:13
  SPEAKER_00: It was a pleasure speaking with you and learning about how Schlotzki's, the deli, is approaching rebranding and innovation, especially your focus on preserving that deli experience and what it means from the fresh bread to the fresh product and even bringing out pizzas.
• 32:27
  SPEAKER_00: Creating personal moments at scale is something that you are very focused on and using technology to enhance, not to replace human connection was great to hear.
• 32:35
  SPEAKER_00: Uh, your perspective on the power of those small details released it out.
• 32:39
  SPEAKER_00: So thank you.
• 32:40
  SPEAKER_01: Oh, well fun.
• 32:42
  SPEAKER_01: Great, thank you.
• 32:42
  SPEAKER_00: And thank you to everyone who tuned in to listen.
• 32:45
  SPEAKER_00: Be sure you check back every Thursday for a new edition of Brand Stories.
• 32:49
  SPEAKER_00: Until then, don't forget to subscribe and follow us on YouTube and across our social media channels.
• 32:53
  SPEAKER_00: And until then, have a wonderful day.