Chipotle: a leader in fast casual dining, known for its commitment to freshness, quality, sustainability and corporate transparency. That is until last fall when the company with cult-like brand loyalty and through-the-roof sales was knocked off its pedestal after a series of E. coli and norovirus outbreaks that sickened hundreds of people across the country. In the aftermath of the brand’s food safety issues, Chipotle has struggled (to put it lightly) with its customer marketing approach. Instead of taking this scrutiny as an opportunity to craft a thoughtful strategy to create the right Chipotle loyalty program, reflecting on what customers want and expect from them, proving that Chipotle is still the brand they once fell in love with, Chipotle seems to be taking the approach of “give away everything and the kitchen sink if it’ll get customers back in the door”. Seriously, I received a text from Chipotle this morning about a VIP Sweepstakes for Lollapalooza – because nothing says “food with integrity” like free tickets to a music festival. To put it in terms of relationships, which is how all brands should think about their customers, Chipotle seems to be the needy ex who’s constantly texting you and trying to win you back without ever demonstrating that they’ve changed.
Hint: everyone can sense the desperation and it doesn’t end well. It’s time to find a better strategy to create Chipotle’s customer loyalty program.
At first, Chipotle appeared to respond aggressively to the food safety issues. They temporarily closed 43 stores in the affected areas immediately following the outbreaks, and closed all locations for an entire day on February 8, a move unprecedented for a restaurant chain of its size, for a company-wide meeting on their new food safety program. However since the initial response, the company’s effort to win-back customers, and more importantly, customer loyalty, has fallen short.
Chipotle’s current win-back strategy seems as if it can be summed up in two words: free burritos. Following the February company-wide closure, Chipotle has offered a free entrée to anyone who texted “RAINCHECK” and subsequently provided their zip code. Deciding that they hadn’t given away enough free product, the company announced that it planned on sending out at least 21 million direct mail coupons for free burritos over the course of the next few months.
After announcing a net quarterly loss of $26.4 million last week, Chipotle seemed to realize they needed to change course and declared that they would be launching an elusive Chipotle loyalty program. The caveat: they had no details about the program, except that it would only be rolled-out for a limited time. I hope Chipotle proves me and my skepticism wrong and actually uses the loyalty program to deliver a relevant, targeted experience to its customers, but given the company’s response thus far, it seems like this program could be Chipotle’s attempt to push more free and discounted offers to drive customers into the store and calling it “loyalty.” You can put lipstick on a pig, but it's still a pig.
Don’t get me wrong, I enjoy free food as much as the next person (maybe even more) and hope that one day I don’t feel the guilt when I look at my bank account and am reminded for the thousandth time that guacamole is extra. I’ll even admit that I have already redeemed both of my free burritos, so Chipotle has succeeded in driving me back into the store. But have they succeeded in winning me back as a loyal customer in the way that I once was?
For reference, in the past I’ve been known, on occasion, to eat Chipotle for both lunch and dinner because even after devouring an entire burrito bowl, I crave another one later in the day (one of the perks of being 23 and having a fast metabolism). Now, I’ll still eat at Chipotle – in the same way that I’ll still occasionally break out my Abercrombie button-down I used to wear my senior year of high school. The product is still good enough, but it’s not as “cool” as it once was. Instead of looks of jealousy among co-workers when I go to Chipotle during lunch, I feel looks of judgment and scrutiny about my meal choice. Without the promise and assurance of the very best ingredients, Chipotle – like the freshman frat star who’s decked out in brand name pastels – looks like it’s trying too hard to be something it’s not.
Of course I was never under the impression that Chipotle was a “healthier” fast food option. The average burrito is over one-thousand calories and that’s before adding chips and salsa to the equation (and even more with my beloved guacamole). It doesn’t take a rocket scientist to figure out that Chipotle’s core menu is not the most nutritious or health conscious, but the restaurant chain has built its brand identity and entire marketing strategy on the idea that it uses fresh, high-quality ingredients. Once that illusion is shattered, or at least called into question, it becomes more difficult to differentiate itself as a leader in a crowded and competitive fast food landscape.
Chipotle has never been in the game of competing on price. And if the company continues to prioritize pushing free and discounted products, it’s going to be a lot harder to build the brand back to pre-outbreak levels of loyalty and trust. As the saying goes, actions speak louder than free burritos (that is the saying, right?).
Do I think Chipotle will recover from this? Absolutely. Chipotle is not the first brand to be at the center of a food safety crisis, and definitely will not be the last. But customers are not going to start flooding back into the restaurants until Chipotle has earned their trust back.
This is going to take more than a press release about changes to the food safety measures or the paid sick leave offered to employees. It’s going to take more than the buzz created by shutting down stores for a day. And it’s going to take more than giving away millions of dollars of free food. Chipotle has to make a company-wide commitment – from the C-suite executives to the part-time food service workers– to put its customers first and consistently deliver the high quality “food with integrity” that years of marketing have led customers to expect.
Yes, free burritos are a great way to create buzz and measure how willing customers are to go back into the store, but brand loyalty isn’t built on customers who are redeeming coupons for free or discounted product. Loyalty comes when customers are paying full-price for a product, even when that price comes at a premium, and feel confident that they are receiving value for their purchase. In Chipotle’s case, this value now includes the assurance that the purchase will not be accompanied by contaminated ingredients and/or intestinal issues.
At the end of the day, Chipotle, customer loyalty cannot, and will never be, measured in free burritos.
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