DQ’s Marketing to “Fans,” Not “Customers,” Pays Off

Posted on by Patty Odell

It was dire. In 2012, DQ was facing seven years of negative same-store transaction growth.

“If we’re not bringing more people in than we did a year ago, that is not a sustainable business model,” Barry Westrum, executive vice president of marketing, American Dairy Queen Corp. “This was a problem we faced as a brand.”

Barry Westrum Dairy Queen

Ironically, just as sales were slipping away, DQ was ranked as America’s favorite burger chain so it knew it had that emotional connection with consumers but wasn’t leveraging it.

The action plan called for establish a strategy to get the brand moving forward again. DQ focused the operations team on speed, accuracy, product quality and updating its “horribly” outdated facilities. More importantly, it needed a unifying theme. Some operations were only open in the summer. Some had food lines, while others did not. Some still looked as they did in the 1980s, Westrum said last Thursday at the ANA Brand Masters Conference.

“We needed an idea that unified us and eliminated the fragmentation we saw in our system,” Westrum said.

It set to work defending the key brand strengths and focusing advertising on making the brand contemporary and relevant. An agency review brought on Barkley out of Kansas City to leverage a key, and game changing, consumer insight it had discovered: that it’s customers are not customers, but fans of the brand.

“We don’t have customers we have fans,” he said. “Fans root for the home team. They recruit other fans. They pass their fandom down through generations. This was our key insight for our new campaign: ‘Fan Food, not Fast Food.’ If you think about your customers as fans, you will think about your customers very differently. It changed everything we did, everything that left the building had to be fan worthy.”

A TV spot kicked off the new campaign in June 2013 with the entire go-to-market process overhauled.

“Once we got the vision right as it related to communications, that changed how we brought every innovation to market. How we defined our strategic platforms, idea generation, database screening, testing and measurement,” Westrum said.

In the spot, DQ first addressed a fundamental concern; DQ ranked last in affordability against its competitors, which included McDonald’s and Burger King, according to NPD. The concept, “$5 Buck Lunch,” was developed offering consumers an entrée, fries, beverage and, of course, and ice cream sundae, all for $5.

Addressing a second challenge in its marketing—that consumers didn’t think healthy options were available—in May 2013 it showed off Orange Julius Premium Fruit Smoothies blended with fresh fruit and used humorous advertising to compare those healthy ingredients with competitor’s artificial ones.

Smores Blizzard

Of course, DQ also had to leverage its biggest brand strength, the mighty Blizzard, which launched in 1985 and still drives 20% of DQ’s business. In the summer, it a new TV spot featured the flavor innovation “S’more Song.”

“We innovate the heck out of blizzard and we take pain staking detail to make sure they’re great,” Westrum, just the third CMO in the company’s 75 year history, said. “Flavor innovation is still a critical part of the Blizzard brand.”

As part of it Blizzard marketing blitz, consumers told DQ that the one “wonder moment” about the brand that they couldn’t get anywhere else in QSR, was that the Blizzard was high quality and so consistently cold that it was often served upside down. As of April 15, 2015, every Blizzard will be served upside down.

“This is a wonderful brand building moment that can occur millions of times over a week,” he said.

TV is still king for DQ continuing to drive same store sales. It franchisees added an extra percentage point to the marketing budget allowing DQ to now on air TV spots 12 months a year starting with a new campaign this week.

DQ Cupid Cupcake Commercial

DQ is also innovating in its cake business and now offering—in the run up to Valentine’s Day—the Cupid Cake, which comes with a red spoon. It launched with a spot in the Puppy Bowl—no, not the Super Bowl—an annual TV program on Animal Planet that mimics the Super Bowl, using puppies as ball players. An ad also ran Saturday night on Saturday Night Live, in DQ’s first appearance.

There’s plenty of “fannovation” going on in social as well. Last fall, a contest pit Pumpkin Blizzards against Apple Blizzards against each other to see which product America voted to be their favorite. A key strategy was that customers would order minis of both flavors and then a regular size of their favorite.

“We expected about 80,000 votes and got 800,00. Pumpkin won 54% to 36%, Westrum said. DQ spends about $1 million annually on research.

On the technology side, it launched Mobilecakes.com for busy, working customers to easily order cakes online, which now represents 40% of its cake orders. DQ also used geo-targeting with partner ESPN to target consumers who had been in a McDonald’s parking lot in the past five days and then served them a coupon to visit DQ in the next two weeks.

And when the temperature dips or rises by six degrees, DQ’s ice cream sales can dip. So in a partnership with The Weather Channel, when the weather moved out of the optimal ice cream eating so DQ sent out a post to buy-one-get-one blizzard treat. The offer is so successful it is still in the media plan today.

As for those outdated facilities, the franchisees needed a push to redesign or build new restaurants, which is underway at many facilities. The new concepts, called Chill & Grill, are designed with a higher quality look—food driven for the QSR concept, some with patios for outdoor dining and table service.

“The remodeled locations are enjoying a 78% same-store sales growth,” Westrum said

Finally, this year all of its packing will be used for marketing, including cone wraps, with messages like where its local cow farmers are located.

As a result of all the Fandom, Facebook likes are up 11%, comments increased 80% and shared jumped 77%. Even more importantly, DQ has seen sales growth over the last 18 months.

“We have been doing a great job outpacing the competition,” he said. “We’re making great progress, most importantly, with transactions.

Takeaways:

Find your North Star
Fannovation must become part of the culture
Leverage your strengths
Don’t be afraid to tackle your biggest brand barriers
Think and act 75 years young
The total fan experience

More

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