In recent years, the fast-casual restaurant industry has experienced phenomenal growth: according to the strategic market research firm Euromonitor International, annual sales growth for fast-casual restaurants was in the 10-11% range from 2011 to 2016. (For a sense of how impressive this is, consider that annual sales of fast food grew by only 3-4% during the same period, and growth rates for full-service restaurants were even lower at just 1.5-2%.) It’s hardly surprising, therefore, that more and more food service brands are trying to tap into this popular segment of the restaurant industry: the fast-casual movement now encompasses everything from brand-new chains to chef-driven spinoffs of fine dining establishments to counter-service options from established casual restaurants.
As the fast-casual market becomes increasingly crowded, however, it’s getting more difficult for brands to be successful. And according to Gerry O’Brion, a food service marketing consultant who spoke at the 2016 Fast Casual Executive Summit, the difference between winners and losers in the fast-casual game comes down to differentiation: the most successful brands are the ones who have carefully considered the factors that set them apart from their competitors, and have strategically implemented the right features to make their brand stand out from the crowd.
However, as O’Brion emphasizes, differentiation must be more than just a gimmick to have a real impact on a brand’s success. To this end, he recommends that brands focus on differentiating themselves by clearly and honestly answering these four key questions:
Who are your ideal customers?
A clear definition of a brand’s ideal customer is an essential aspect of differentiation: after all, it’s impossible to find your niche and set yourself apart if you’re trying to please everybody equally. Instead, brands need to focus on the specific details of their ideal customer in order to identify and refine the direction they need to take to differentiate themselves. And it’s important to be as descriptive as possible here in order to have the best possible chance of strongly satisfying those customers: for example, rather than simply identifying “Millennials” as the ideal customer (as many brands do), it’s more effective to think about what qualities in particular make Millennials an ideal target.
What do those ideal customers want from your restaurant?
After brands have identified their ideal customers, the next step is to hone in on the fundamental desires and needs of those customers. For example, consider the scenario in which a restaurant’s ideal customers are Millennials with young kids of their own. Things that these customers might be looking for in a fast-casual restaurant include: fresh, healthy food for their kids; a range of options to satisfy picky young eaters and sophisticated adults alike; and an ambiance that is child-friendly but still trendy.
How can your restaurant fulfill these customers’ desires?
The next step in the differentiation process is moving from “what” to “how:” in other words, what can your restaurant do to provide what the ideal customer is looking for, and how can you ensure their desires and needs are met? Continuing on with the above example, a restaurant looking to target young Millennial parents might think about offering creative and different kids’ menus, training staff to treat kids as important customers and not as a disruption, and working with designers and decorators to create an atmosphere that is welcoming to children without sacrificing style.
Finally, keeping all of the above in mind, what’s your main idea for differentiation?
Why is your restaurant here? What do you offer your ideal customer that they can’t get anywhere else? Clearly defining a restaurant’s reason for being in this way helps brands better articulate the things that distinguish them from others vying for the same customer pool. To help answer this question of “why,” O’Brion further encourages brands to think about these six fundamental factors:
Food—Is the food served at your restaurant proprietary and unique? What’s special about it?
Service—Does your restaurant offer exceptional service that is geared appropriately to your ideal customers? Are you ready and able to provide your employees with the training and tools they need to deliver this kind of service?
Experience—Can your brand clearly articulate the type of experience you offer to your customers? How do you want them to feel when they eat a meal at your restaurant? How would you like them to describe their experience to others?
Location—What prompted your restaurant’s choice of location? How does its location help satisfy customers?
Environment—Is your restaurant’s environment an accurate reflection of both your brand and your customers? If not, what needs to change?
Price—Does your restaurant have clear, well-defined prices that offer value to the customer? Note that “value” does not necessarily mean low prices: today’s fast-casual customers are increasingly willing to pay a higher price if they feel a brand’s food and experience are aligned with their lifestyle choices.