Case study: SchlotzSky’S

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In 2013, schlotzsky’s acknowledged that while it currently has a solid guest base of Baby Boomers and Gen Xers, its future growth hinged on cultivating younger Millennials. seeking to engage those guests and encourage them to return more frequently, schlotzsky’s sought to increase its relevancy by meetingthem where they are: on their mobile devices.

the company began searching for a mobile guest engagement solution that was efficient, effective and could bridge technological challenges within the chain, such as multiple POs systems in use at its restaurants. Convinced the solution must use social media channels such as Facebook, twitter, and Instagram to reach younger guests, schlotzsky’s sought a program that also worked seamlessly witheach of those channels. that solution also had to be simple enough to implement at each restaurantlocation and easy to use for corporate and franchise operators.

“We want to reach Millennials,” said schlotzsky’s President Kelly Roddy. “they are more tech savvy, more social, more culinary aware than ever before. We want to communicate with them in the way they want to communicate: through their mobile device. We want to grow and retain that audience and serve them the way they want to be served.”

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Key ChallenGes

aBOut sChlOtzsKy’s

Schlotzsky’s is a 350-unit fast-casual bakery-café based in Austin, Texas, serving healthful sandwiches, wraps, pizzas, flatbreads, salads and soups. The 43-year-old brand has restaurants in 36 states and three foreign countries. One of sixbrands owned by FOCUS Brands, Inc., including Auntie Anne’s, Carvel, Cinnabon, McAlister’s Deli, and Moe’s Southwest Grill.

Why sChlOtzsKy’s ChOse PunChhIn 2014, Schlotzsky’s discovered Punchh, a brand-centric mobile CRM suite for brick-and-mortar businesses. Punchh proposed that its POS-, website- and smartphone-integrated mobile app would enableSchlotzsky’s to:• Engage guests on their mobile devices• Deploy a comprehensive suite of capabilities that increase

guestloyalty, drive them to write reviews, take surveys, refer friends and respond to special-event campaigns

• Integrate all restaurants’ POS systems with social networks and third-party technologies

• Get 360-degreeguest analytics and segmentation including demographics, frequency, average spend, orders (SKU-level), reviews and referrals (CRM)

• Target customers using customized 1-1 campaigns and offers• Increase same-store sales and profitability

“From creation to implementation, the mobile app took just five months,” said Mark Mears, chief marketing officer at Schlotzsky’s.“Even more remarkable was how quickly we were able to deploy the solution to all 350 stores using only a very small It team.”

Launched in June, the videos informed audiences on YouTube, Facebook and Twitter how they could help ‘save the world’ from falling sandwiches when they downloaded the app. Doing so “took a sandwich out of the sky,” helped save the planet and earned them a free Schlotzsky’s sandwich with the purchase of a drink and a side.

launching the ProgramTo encourage its guests to download the app, Schlotzsky’s rolled out an online marketing campaign in June dubbed, “The Sandwiches Have Landed.” The campaign created buzz about its Lotz4Me Guest Rewards program. The campaign featured a series of videos about the adventures of a pair of unlikely heroes determined to save the world from the invasion of one million sandwiches headed toward Earth.

eaRn, aCCess and RedeeM ReWaRds

By downloading the app, guests were entered into the chain’s digitalguest rewards program where they could earn, access and redeem rewards, get exclusive insider news and special offers, and provide immediate guest feedback and surveys.

The June launch of the Lotz4Me mobile apphas yielded overwhelmingly positive results. The first day saw 11,000 downloads, and three-and-a-half weeks later, downloads hit 60,000. As of the early fall, the app has been downloaded more than 127,000 times.Quickly, the app rose to the No. 4 spot within the restaurant apps category on the Apple Store site. That ascension saw it beat out downloads of apps for far larger chains in the period, brands such as Papa John’s Pizza,

Panera Bread Co. and Chipotle Mexican Grill.Another notable result was the increased word of mouth that Schlotzsky’s has generated since the launch: 9.8K+guestreviews and 8K+ referrals.“Our early results are truly promising – The Lotz4Me app has transformed how we engage with our guests. Lotz4Me members spend ~19 percent more on average compared to non-loyalty guests and are repeating at ~58%,” Mears said. “In the first few months alone,

our guests referred over 8,000 of their friends which resulted in $260K in new spend.”By engaging guests in a far more personalized manner via the Punchh app, the Schlotzsky’s guest experience has become more customized, valuable and user-friendly. By effectively gathering guest preference data through the loyalty program, Schlotzsky’s operators can send out highly targeted campaigns that literally reward those guests for each visit.

STRONG RESULTS

“To stay ahead of our competitors, we will keep innovating our mobile engagement using the Lotz4Me app,” said Mears. “We have just addedsweepstakes andgaming features, and will be adding rewards for catering guests. When we make it fun for our guests to be involved with the brand, they’ll connect with us easily and willingly. And when they do that, they’ll also visit more frequently, spend more per visit and become advocates on our behalf via their social networks.”

Key Stats:Time Period: 4 Months

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