At Denny’s, the Brand Revolution Continues
Family-dining chains around the country can relate to Denny’s plight. A lot can change in nearly seven decades. And while no legacy brand wants to drift from its brand values, holding steady, no matter how stubbornly, is a recipe for disaster, too.
For Denny’s, chief brand officer John Dillon says, the challenge included another layer. Its sizable awareness was rooted in past efforts. The reality inspired Denny’s to look at its future through the lens of, “a brand you thought you knew, but we’ve changed.”
That’s always a delicate direction to tip-toe because, with one misstep, it can turn into, “the brand you thought we knew, but there are so many changes you can’t recognize it anymore.”
In 2018, Denny’s launched a campaign that showed two diners eating it new Dulce de Leche Craft pancakes. One of the customers said they reminded her of her favorite bakery. The chef responded: “You mean Denny’s, Denny’s?
“Yeah, Denny’s, Denny’s,” she replied.
That’s the guidepost for Denny’s reinvigoration. Position a brand people love in a way that excites core guests but also surprises light users. Invite younger and first-time consumers through the door and show them a restaurant that’s an amplified version of what Denny’s stood for in 1953.
One of the more staggering changes involves Denny’s menu. Since 2011, nearly 80 percent of its core entrees have changed or improved.
But perhaps the more visible transformation involves the stores themselves. In the past few years, Denny’s has remodeled a significant crop of units to a more modern, comfortable look known as the “Heritage” design. In the second quarter of fiscal 2019, the chain completed 40 refreshes to get the figure up to 84 percent systemwide.
As with any brand evolution, there’s making changes, and then there’s getting credit for it from guests. In May, the “See You at Denny’s,” campaign launched across digital and social platforms, with Denny’s hoping “to invite customers back to its restaurants to experience improvements the brand has brought to life,” the company said.
The tagline is an invitation to diners to try out “the new Denny’s.” The accompanying ad spots included creative for multicultural audiences, which reinforces Denny’s focus on diversity, equality, and inclusion initiatives. A recent example is the brand’s partnership with NBA legend Magic Johnson on leadership training and development programs, announced in March.
Denny’s tapped agencies EP+Co, Conill and Fluent360 to create the spots.
And while all this stirred, Denny’s digital push gathered steam with Denny’s on Demand. The platform arrived mid-2017 and has steadily grown year-over-year since. Off-premises business expanded from 7 percent to 11 percent of total sales in that span, with delivery driving the growth. At Q2’s end, roughly 88 percent of Denny’s system was actively engaged with at least one delivery partner.
Dillon took some time to chat with FSR about the company’s recent campaign, continued evolution, and where one of the country’s largest (1,702 total units) and most-recognizable full-service restaurants could be headed next.
Talk about the inspiration behind the “See you at Denny’s” campaign. Where did this idea begin?
The campaign is really an aggressive but natural evolution of the story we’ve been telling about the Denny’s brand as we’ve continued our revitalization journey here. One of the elements of the brand we’re proudest of is the naturally inclusive and welcoming nature of a diner – a place you can lay down your title at the door, let your guard down and come in to relax with great food in a comfortable, welcoming environment. We believe it’s differentiated within the restaurant category and it’s the essence of the America’s Diner positioning that has become our clear north star, as well as our brand purpose of feeding people’s bodies, minds and souls every single day. That’s what our collective Denny’s team—from front lines to our franchisees—are passionate about and in business for.
While we’ve seen solid success and continue to be pleased at our revitalization, we have more to do and we recognize that there are many potential guests that haven’t been to Denny’s in a while, a younger guest that maybe hasn’t been at all, or maybe even come for one particular daypart only. There’s business growth in turning a lapsed or light user into a guest that is welcome back into the Denny’s family. So we believe there’s so much more upside to continue to aggressively amplify our message and to welcome guests into the new Denny’s and continue to share the story of the changes we’ve made.
And with “See You at Denny’s” we wanted to do that in a way that aggressively shared our inclusivity—we are America’s Diner for today’s America, an America that by its very nature is diverse in all different ways. At Denny’s we believe we play a role in bringing people together to make connections, so with our new campaign in part we are welcoming all to come in, put any tensions aside over a fantastic meal and connect with family, friends or the local community in one of tables or our corner booths.
Diversity and inclusion have been big marketing points for Denny’s recently, between the new campaign and the Magic Johnson partnership. How important is this to the company internally, from employees to customers?
Quite simply, it’s critical and completely a part of who we are. In fact, “open to all” is one of our core guiding principles shared from top to bottom throughout our entire system. We view the word “open” as such a rich word. When we say we’re “open,” it’s both the literal translation of the word—since we are literally open 24/7, but even more importantly the emotional translation of “open”—open to all backgrounds, all beliefs, all expectations, and utilizing our position as America’s Diner to facilitate our restaurants being the place where people from all backgrounds feel welcome and are able to enjoy a meal while connecting with each other.
Our employees also recognize and have really embraced our recent amplification internally of our brand purpose to feed people—bodies, minds and souls—taken directly from the words of our founder Harold Butler in 1953. As we invite guests back to our restaurants with the new campaign, we want to ensure that our guests feel a part of our family, and that we always exceed our guests’ expectations, which is stressed upon throughout our new employee training program.
To attract the best team members to Denny’s, we launched a recruiting program in March with Earvin “Magic” Johnson, to further bolster our talent acquisition efforts. Partnering with Magic is a natural fit for us as his business acumen and commitment to building diverse workforces aligns well with Denny’s efforts and our passion for supporting the communities we serve. His assistance in our recruiting efforts will help us reach a broad audience to share skills and insights that will help them grow personally and professionally. We’re thrilled with this partnership, but I’d also say this is just one of many programs and partnerships that demonstrate our commitment to diversity and multicultural marketing over the years.
And talk specifically about the ads that speak directly to African-American and Hispanic guests. Where did the inspiration stem from?
The inspiration simply stemmed from the diversity of the guests we see in our restaurants every day. Even beyond that, today’s America is beautifully diverse by nature, and as America’s Diner we push hard to make sure our advertising reflects and embraces that. The new campaign we launched with an inclusive 30-second anthem spot, and also launched with dedicated multicultural spots that speak directly to the cultural insights of our African-American and Hispanic guests. We worked closely with our multicultural Team Denny’s agency roster to bring this work to life and feel we have captured critical cultural nuances that we know will resonate with our audience.
Taking it a few steps deeper, because our Anthem creative highlights inclusion in our restaurants, we challenged ourselves and the agency teams to utilize diverse production crews, resulting in the hiring of a female-owned production company Epoch Films.
The African-American-focused spot also features a recipient of the Denny’s Hungry for Education (HFE) scholarship program. She is a student at one of the most prestigious HBCUs, Spelman College, and will be prominently featured in additional digital and social initiatives to promote the HFE program.
Broadly speaking, family dining has been one of the most evolutionary segments in full service over the last couple of years. From Denny’s legacy perk, how have you seen the sector change?
As with any segment, there’s ups and downs but no question family dining is definitely undergoing a revitalization period, and we’re proud to be a part. While yes things change, we’ve long believed family dining is in a very nice sweet spot to meet guest needs of a great food experience, hospitable service in a welcoming atmosphere at a solid price point. Somewhere where connections can be made, or batteries can be recharged a bit around a wide array of occasions. While a lot changes around us every day, we simply don’t see those core needs changing, but expectations within each area are indeed higher. Family dining as a whole has done a strong job recognizing the needs we meet as a category and will continue to meet, while at the same time making improvements to become more relevant. For us, we’ve invested in menu and service improvements, we’ve enhanced our environment, we’ve added technology to make our brand more convenient, we’ve continued to elevate our creative and our overall marketing approach to further engage our guests where they are, and the list goes on.
And how has the brand managed to keep growing sales for eight straight years as others have faltered?
First, relentless focus on the guest, the guest, and then the guest again. Second, from our CEO John Miller on down, it’s been maniacal and steady execution against our strategic pillars—delivering a differentiated and relevant brand, operating great restaurants, expanding our footprint, and driving profitable growth. And importantly, we’ve done that in close collaboration with our franchisees on virtually all brand initiatives, which has enabled us to together make strategic and investment decisions together to improve the experience for our guests in the restaurants every day. While we deliberately challenge and push each other, it’s all with positive spirit and intentions and I’d truly say our relationship and collaboration with our franchise community is one of the best in the industry. It’s something all involved are proud of and see as a testament to our collective success.
Importantly collaborative leadership has led to the improvements that have driven our success. Together we’ve improved and revamped over 80 percent of the menu over the last several years, utilizing research with both our current guests and lapsed guests as a guide to focus our efforts on the right balance of premium and value items. For example, we’ve recently introduced our crepe lineup which features real French crepes with fresh fruit as well as abundant value meals like our Super Slam at $5.99 ($6.99 in some markets) which features eggs, bacon, sausage, hash browns AND pancakes.
From a product quality standpoint, our Denny’s coffee is made with 100 percent Arabica beans, we use real buttermilk in our pancakes, we serve wild-caught Alaskan salmon, our sirloin is choice cut and our burgers are hand-pressed and 100 percent real beef. We’ve also worked together to make sure our marketing voice is an industry leader, including our new campaign launch, our social responsibility efforts like the Denny’s Mobile Relief Diner, and our category-leading digital and social media voice.
We’ve also witnessed the rise of delivery with brands increasingly investing in technology and partnerships in the race to add delivery capabilities. With that in mind, in 2017 we launched Denny’s On Demand, our ordering platform that enables guests to place a mobile or online order for takeout or delivery (where available), 24/7. This has been a factor in contributing to the ongoing sales growth, with off-premise sales volume growing over 30 percent last year. We’ve seen significant growth in our partnerships with our national marketplace partners: UberEats, DoorDash, Grubhub, and Postmates.
In addition to our off-premises growth, we have continued to generate mid-single digit range sales lifts and receive positive customer feedback stemming from the Heritage Remodel Program which launched in 2014. From food and service, to dramatic improvements in our dining atmosphere, we expect over 90 percent of the system to have the updated image by the end of this year. Consumer feedback has been overwhelmingly positive and will provide a tailwind over the next several years.
Store remodels and menu updates have played a significant role in Denny’s revitalization. Where do you begin building customer awareness for the upgrades?
We realize we have an incredible story to tell about our upgrades. The good news is there are many chapters in this story, and its one that we’ll continue to tell and amplify. In fact, you’ll see this as a lynchpin of our new campaign, as “See You At Denny’s” will be telling this story over time, including our Anthem spot which invites guests back in to Denny’s to see our new remodels and upgraded menu. More will come over time here, and our improvements are also continuing. But quite simply, we’re proud of being America’s Diner for today’s America and how we’ve made changes to embrace that role we play, and can’t wait to tell even more of that story. We also have more of our social impact story to tell, amplifying our existing and future work to give back to the communities in which we serve—focus like our Mobile Relief Diner, our Hungry For Education Scholarship program, the millions we’ve raised through our restaurants for No Kid Hungry, our food sustainability story, and more.
What’s the next step for Denny’s On-Demand? Where are the greatest challenges and opportunities now that the platform has matured?
As technology advances, we have too by being one of the first out of the gate in our category, but I wouldn’t say the platform is fully mature yet. We have clearly made our brand more convenient with Denny’s On-Demand and offering our guests the ability to get their favorite Denny’s items whenever and now wherever they want. But clearly the work goes on to make this area of our business even stronger for us, as we will continue to optimize the experience for our guests and the platform for our franchisees, and we have even more technology innovations in the works as we speak. But again here, we’re focused on keeping the guest and their needs at the center and making our brand more convenient for our guests will be a continual focus for us.
With Denny’s On Demand, delivery continues to drive the expansion of our off-premise business and allows us to reach younger guests at multiple different dayparts. We have observed a steady progression of company and franchised restaurants adding delivery channels over the last few quarters. Our off-premises sales represented approximately 11 percent of total sales at company and franchised restaurants during Q2 2019, which is up from approximately 7 percent at the launch of Denny's On Demand in mid-2017.
With the platform having been in place over two years now, maximizing profitability for our operators and franchisees, seamlessly integrating with delivery partners to ensure customers are still receiving the high-quality food they’re accustomed to from Denny’s, as well as training employees on evolving technology and processes have been some of our greatest challenges. With all that said, it’s an exciting platform both to us and to our guests, and we still have more opportunity for growth in our off-premise business both across the system as more restaurants and providers sign on, as well as within each individual restaurant as we work on the overall profitability.