Chipotle is growing sales at over a 20 percent annual rate with a same-store sales growth rate of 8 percent. That is remarkable in our current slow growth economy. Chipotle’s secret green sauce for sales success is selling healthier food that tastes good at a competitive price from a convenient and enjoyable location. The following are four key best practices that every restaurant can use to win customers while also making a positive difference in human and environmental health.
Win “sticky” green customers
Chipotle has a very clear understanding that the core customer they want to win is the health-conscious consumer. Whether they are labeled LOHAS consumers (Lifestyle Of Healthy And Sustainable) or Super Greenies, these consumers are characterized in economics as “sticky” because they are loyal to a business even in the face of competing price promotions. In fact, these sticky customers will often pay more for products that align with their values. Market research by Catalina found that only 1.5 percent of consumers account for 80 percent of new product purchases. Capturing the health-conscious, values-driven consumer looking for affordable good food was how Chipotle won their sticky customers. This same opportunity is available to all restaurants and is a proven path for protecting your revenues from competitors promoting $1 menu items.
Align value with values price strategy
Price is the number one food concern among American consumers. But health is the number two American food concern, finishing a close second. Chipotle figured out there is a huge business growth opportunity in offering good food at affordable prices. They don’t compete against $1 menu promotions. But their prices are very competitive for the quality of food they sell. They are winning double-digit revenue growth by mass merchandising what only a few years ago was considered specialty health foods sold at premium restaurants and grocers. Their pricing and products align with the customer’s search for value and values.
Enable customers to sell for you
Mass advertising and brand messaging are being displaced by consumers who post their experiences with a product and business online. Chipotle does comparatively little advertising. They do a lot of messaging through in-store postings and on their restaurant bags. They have won awards for a video that was truly outside the marketing box for the food industry and went viral with their customers and potential customers. Chipotle is making it easy for their customers to share the Chipotle message about food and environmental health with potential new customers by equipping them with a clear and genuine message about who they are and what they sell.
Hire great people focused on satisfying the customer
My first experience at Chipotle exemplifies their success. My Millennial generation son took me there to eat. The fact that this was my path to my first Chipotle experience represents their success in winning market share with the Millennial generation by aligning with the Millennials’ search for value and values. But what cemented my positive impression of Chipotle were the people serving the food. I asked for guacamole. I was told it cost extra. That was disappointing because I thought it would come with my burrito. But the Chipotle work associate never missed a beat. She immediately gave me the guacamole free as a first-time customer courtesy offering. Imagine getting that type of response from the typical fast food work associate. From my experience in working with companies that are adopting sustainable best practices, I can confirm that empowering people to think and do is very green and profitable.
Exclusive video interview on Chipotle’s green business best practices
In this exclusive video interview conducted at Sustainable Brands 2012, Chris Arnold, Chipotle Communications Director, profiles their best business practices for delivering quality food at competitive prices which is achieving double digit revenue growth results:
Bill Roth is the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.