How Outback Got Customers Talking Again
Outback has, mostly, taken its business off the discounting track. Across Bloomin’ Brands entire portfolio, which includes Carrabba’s, Bonefish, and Fleming’s, discounting dropped 19 percent in the second quarter. It was cut nearly in half (44 percent) at Carrabba’s alone. While this long-term play has proven effective—Outback’s traffic has gained four consecutive quarters—that doesn’t mean the legacy steakhouse can’t pulse a promotion or two. You could even argue there’s pent-up demand in the place of rolling attrition.
Let’s look at one in particular, Outback’s steak and unlimited shrimp that hit the market on September 26. YouGov ran it through its Plan & Track system of 1,200 interviews to see how the purchase consideration and word of mouth moved.
Outback promoted the limited-time deal on national TV and social. The result? Talk of the chain hit a new high. On September 26, 31 percent of U.S. consumers aged 18-plus recalled seeing an advertisement for Outback within the past two weeks, YouGov found. Currently, that number is up to 38 percent.
Also on the rise is the number of U.S. adults open to dining at Outback. Since the unlimited shrimp deal’s arrival, the percentage of U.S. consumers aged 18-plus saying they’d consider visiting an Outback when next in the market for food or drink upped from 32 percent to 35 percent, matching a high for the entire year.
Check the graph below:
For word of mouth, which asks respondents if they’ve discussed a particular brand with friends or family members in the past two weeks, Outback’s score lifted to 23 percent from 17 percent.
See the climb:
Additionally, YouGov’s data discovered that 44 percent of current Outback customers tend to dine in a restaurant, café, pub, or other eating establishment at least once per week, compared to 36 percent of the general public.
What does that mean? Perhaps it signals that the Outback customer, not unlike the casual dining fan in general, happens to eat out more than most. That’s probably a stark contrast to, say, fine dining, where dining out is more of a special occasion event.
Foursquare data shows that customers visit quick-service restaurant an average of 26.7 times per year (or about every other week). You’d think the comp for big-box casual dining and quick service would be relatively similar in scope. Independents with local followings, especially those that serve breakfast, likely hit higher figures as they play a daily role in diner’s lives. Kind of like Starbucks and Dunkin’ on the limited-service side.
YouGov’s data shows that Outback is most popular with Baby Boomers.
- Millennials: 58 percent have a positive opinion.
- Gen X: 60 percent have a positive opinion.
- Baby Boomers: 65 percent have a positive opinion.
Outback has made great strides since Q3 of last year, when traffic upped a paltry 0.1 percent. That signaled the first quarter of improved traffic in over a year and ignited a run of solid results. Traffic was up 2.2 percent in Q1 following a heavy lift of 4.3 percent to end fiscal 2017 before the 0.6 percent climb in Q2.
Outback has done this with some healthy vitals. It cut back marketing spend 14 percent last quarter and drove same-store sales gains of 4 percent, year-over-year.
“Clearly, the investments in all of our growth levers are really working,” CEO Liz Smith said at the time. “… Why we feel so good about it is—this is broad-based growth. So, certainly our investments in elevating the customer experience are working, and we are seeing that in customer satisfaction scores and traffic. We are also getting a strong payback on our CRM initiatives, data personalization, and then, the loyalty program, which is working really well at Outback and keeps building itself.”
“As the second half of the year unfolds, we will continue to wean promotional traffic from the base and replace it with more-sticky, high-value consumers,” Smith added later. “We are confident this is the correct strategy to continue to build healthy traffic and grow margins.”
Outback has taken spending from marketing and discounting and poured resources into steak preparation, portion sizing, and methods to reduce complexity within restaurants. The shift away from discounting lifted check averages 3.4 percent last quarter as well.
It also continues to remodel restaurants and test multiple design prototypes. Smith said Outback expects the remodels, which are set to rollout in the second half of the year, to deliver about a 3 percent traffic lift consistent with past interior refreshes. Within the next three years, Outback expects to complete most of its units. Fifty are on deck for this calendar year.
The chain is also relocating units—14 this year—to better sites, a plan that generated sales lifts well in excess of 30 percent in completed units. Outback is also building a pipeline to add an additional 50 restaurants to its 738-unit portfolio.