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SPARTANBURG, S.C. (Blue MauMau) ─ Denny’s surprised millions of Americans during Sunday's Super Bowl by offering to serve breakfast on the house two days later. The commercial offered a Grand Slam value meal to anyone who visited their 1,500 restaurants across America between 6am and 2pm on Tuesday, February 3. The commercial that was broadcast in the third quarter of the game was seen by an estimated 95 million viewers in the US.
The free Grand Slam ─ two pancakes, two eggs made to order, two sausage links and two strips of bacon ─ was the franchise chain's first advertising foray into the Super Bowl broadcast. It was a way for the casual dining chain to remind consumers that during these tough economic times, when the public has been converting to quick service restaurants that offer value meal items, Denny's offers value meals that are hot, literally.
Nelson Marchioli, CEO of Denny’s, declares, “This free offer is our way of reacquainting America with Denny’s real breakfast and with the Denny’s brand. You don’t know the real Denny’s unless you’ve been in our restaurants lately, experiencing the quality of our new menu items and our service first-hand.”
Denny's says the cost of the food, the Super Bowl spot and other production costs for the free meal roughly total an estimated $5 million.
Getting Franchise Support
The chain has seen its guest count decreasing for the past few years, with that trend accelerating in the current recession. According to a January 15 Denny's report, guest counts in the chain were down 6.9% in 2007 and 7.5% in 2008. Same-store sales of franchised restaurants dropped 7.2% from the year before in the fourth quarter of 2008. That problem is compounded since the comparison to 2007's fourth quarter was a soft one that had in turn dipped 4.6% from the year before. In short, as consumers have been flocking to value meals, they have been forgetting Denny's casual dining experience.
John Dillon, Vice President of Marketing at Denny's Corporation, explains to Blue MauMau that Denny's ad strategy aimed to dramatically increase consumer awareness and patronage to its restaurants. He explains the restaurant chain's marketing conundrum: “Quite frankly, a lot of people have forgotten about Denny's.” “Denny's felt like we needed to really shake things up to get people back in our restaurants. That's what is behind this offer.”
Dillon adds, “We also had tangible efforts in place, such as "bounceback" coupons. We've been very up front with our people that this event won't work if people don't come back. So we put some pretty aggressive offers to get people to come back, such as a buy-one-get-one-free, free pancake puppies and other coupons to get customers back, not just for breakfast, but also for lunch and dinner.”
Denny's marketing leader explains how the issue was approached, explaining the considerable collaborative effort with the chain's franchise owners. “This literally was a team effort,” he says. In marketing meetings, the idea took root that “with the economy the way it is, a free meal is something that helps a brand like ours, since we are a value brand that can stand out at a time like this.”
A free meal made sense to drive that message home.
Dillons adds, “We started with that strategy and then went to the tactic – how do you say a message of value meals to the most people in the most efficient way? That's when we realized that something like a Super Bowl ad [about a free meal] was needed to scream the message from the mountain top.”
But franchise owners are known to be very resistant to free items. That's because franchises typically take the brunt of the costs for free meals that the company head office might market. During tough times with slim restaurant profit margins, owners naturally can become very squeamish and unreceptive to such new initiatives.
And franchise owners is what moves the chain. Denny's is roughly 80% franchised restaurants.
Dillon states that it was critical to not only engage but also to tap into the collective wisdom of its franchise owners by having them participate in the formulation of the campaign. In other systems, that often means a franchisor, a corporate office that leads a chain, will meet with a few franchise owner representatives on a franchise advisory council to solicit comments and get their blessing on an ad campaign.
But a Denny's team of executives went cross country to hold town hall meetings with operators in key markets. Concerning the meetings, Dillon observes, “We invited all franchisees and company operators to come in. We shared our ideas, but wanted their input. They helped maximize the idea. Once we shared the strategy, which is using this the year of the Grand Slam and making this the launch point of getting lapsed customers back in the restaurants—once they understood this, franchisees were behind it.”
Dillon stresses that the free Grand Slam offer is a shared cost between franchisees and corporate.
Immediate Feedback of the Marketing Campaign
Nelson Marchioli, Denny's CEO, says that the company is showing preliminary results that are quite good. "We had an extraordinary day,” he says. “We were hoping to reconnect with millions of Americans today...and we did. This Free Slam Day has exceeded our expectations in every way."
If you think Denny's CEO is simply engaging in empty sales rhetoric, consider this: The interest was so high that the LA Times and blog site FranchisePick reported that the Denny's web server went down on Tuesday. Apparently, there were a lot of people not knowing where their local Denny's was located or what the restaurant offered.
The firm reports that there were approximately 40 million hits on its Web site since the Super Bowl giveaway spot aired Sunday night.
According to the company, the chain served approximately 2 million grand slams across the U.S. That is an average of 130 grand slams served per restaurant per hour over the eight-hour event. Denny's also estimates that its restaurants were at capacity during the giveaway, with an average wait time of one hour. A Google search of articles lists at least 831 news articles about the event, some showing long lines of patrons waiting to get into their local Denny's restaurant.
Denny's Marketing VP adds, “Today we got a lot of people that haven't been in our restaurant for a long, long time. A lot of people have said, 'Gosh. I'm impressed. I'm going to come back.'"