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How A Marketing Leader Transformed A 65 Year Old Business Into A Digitally-Savvy Enterprise

Via Forbes : A $1.6Billion offer from Google’s Larry Page and Eric Schmidt to YouTube Founders—all from a Denny’s booth in San Bruno, California.

The sale of YouTube from a Denny’s booth is a fitting way to begin a story about how one of America’s most enduring eateries transformed from a digital laggard into a digitally-savvy leader. While most marketing leaders are struggling to increase their digital sophistication, Denny’s has enjoyed recent press as an unlikely brand that seems to be leveraging digital better than most. Whether it’s tweeting for “America’s Diner,” or “Building your own Pancakes Challenge,” or “Conversations with Celebrities in a Denny’s Diner,” Denny’s has transformed into an effective digital organization, able to engage, enhance, and activate customers through digital efforts.

To learn more about this transformation occurred, I turned to John Dillon, the CMO of Denny’s, as part of my “CMO Insights Series”. What follows are excerpts from the interview.

Kimberly Whitler: What have you done to transform a nearly 65 year old American brand into a contemporary media enterprise? Where did it start?

John Dillon: This really had to start with the overall brand. When you have a nearly 65 year old brand, you have elements that are strengths but you also have unique challenges. We are fortunate to enjoy 97% brand awareness. Most CMOs would love to have nearly 100% awareness levels. We also have 95% brand trial, indicating that nearly all Americans have eaten at a Denny’s at one point. While those are incredible numbers, the he challenge was to get these triers to continue to repeat over time. With sales and traffic down fairly significantly in 2010 (comping versus 2009) and for the few years before, we knew that we needed to restart the brand in a much more disruptive way and think hard about how to drive sustained future growth.

We had a powerful brand with a strong heritage; however, we needed to understand why many customers were lapsed customers who hadn’t been at a Denny’s for 10-20 years. So we did what marketers do and researched both regular guests as well as lapsed guests. We talked to them about why they loved us, and why quite frankly they didn’t… and therefore where we had opportunities. Our goal was to not only get our relevance back, but to become significant again in the lives of consumers.

Whitler: What insight did the research reveal?

Dillon: We realized that our unique, differentiated positioning was centered on the All-American diner experience that only Denny’s offers. So we reframed the brand around “American’s Diner” and used this as the North Star in understanding the experience we needed to deliver. As the only national chain that is a diner, nobody else competes on this positioning in the same way we do. Founded in 1953 as a doughnut and coffee shop that led to the American diner, it is fitting that Denny’s stays anchored in that timeless All-American Diner experience. And that’s what we needed to lean into but also make significant again.

Whitler: What does “America’s Diner” mean to customers?

Dillon: While a diner literally connotes certain food (e.g., burgers, fries, milk shakes, etc.), experience (e.g., breakfast all day, open 24/7, etc.), environment (e.g., booths, counter-based seating), and service (e.g., friendly, efficient, etc.), we found that a “diner” actually means a lot more than the tangible attributes to Americans. On an emotional level, it’s the original social network. It’s the great equalizer where a $1.6B deal can be happening next to a booth with a grandfather (teacher) and grandson sharing a special moment, a group of friends grabbing a bite before they go out for the night or a little league baseball team after a big game. It’s about no pretenses, where everybody parks their title at the door. And it represents family and community and unity. It has an all-American nostalgia that reminds us of a simpler time, where good food, good friends, and good conversation weren’t adulterated with email and ringing phones. It’s about connections, and keeping those connections alive even in today’s modern, more fast-paced and digital world. The repositioning was about relating the Denny’s brand to our customer’s desire for a superior diner experience—and all that it offers on a tangible and intangible level.

Whitler: How did this repositioning drive your need to become more digitally savvy?

Dillon: At this point, we realized that one of our target customer groups, the Millennials, were different. For years, we had been advertising with predominantly traditional media. As many brands are finding out now, this doesn’t fully work for Millennials. While some traditional media still can work and has a role, we needed to migrate quickly and become sophisticated on the digital side to effectively connect and relate to Millennials, who are more and more having families and are therefore becoming a true target of a family diner like Denny’s.

Because our story had changed and because the customer had changed, we wanted to connect via social media, so we just jumped right in. We launched our 2/4/6/8 value menu, much of which utilized social media. We improved our food. We took advantage of our slightly off-center personality, and we didn’t run from it – we embraced it. We developed what was at the time some breakthrough branded content and developed celebrity-driven branded content that went viral with over 10M views.

Whitler: So what advice do you have for other CMOs trying to become more digitally-sophisticated?

1. Surround yourself with experts. I take pride in building a a great team and I’ll be the first to admit I’m learning from them as much as they are from me.

2. Be digitally curious. Get involved. Ask questions. It’s a space that changes every day, so get your hands dirty. Partner with your agency and your team… make each other’s ideas even better.

3. Be deliberate. Be thoughtful and think through the risks. There is downside, but….

4. Be aggressive and take some risks. While you want to be deliberate and thoughtful, you have to jump in. The upside is worth the downside risk and the future will belong to the digitally savvy.

5. Learn from others. We did a lot of analysis on other brands, trying to learn from what they were doing well, and not so well.

6. Work with others. In our case, it’s our franchisees AND our guests. Our franchisees have been just as instrumental in our turnaround as anything we’ve done at corporate. It’s an outstanding partnership.

7. Test along the way where appropriate. Measure results. Because the cost is so low to be digital, make sure it’s not wasted effort. Make sure to have learning objectives and measure each step.

8. Understand and embrace the brand. Becoming digital was an extension of what the brand should be and who we wanted to talk to. Don’t try to be something you’re not; lean into what you are. If you’re not real, with this target it’ll be noticed. The degree of sophistication necessary is based on the needs of your positioning and target.

Whitler: How do you measure results of your digital efforts?

Dillon: We have a variety of measures including: CTR, sentiment measures, buzz measures, and brand tracking equity measures such as our value / quality ratings. We also look at engagement metrics, such as the number of completed views of our videos—how many are not only clicking on the channel but are watching through to completion. Right now, we are running a series of “Grand Slams” animated videos and our numbers have been ascending as people share the content and watch it all the way through to completion. Its content designed to make us significant in our target’s lives, so when they’re hungry they’ll have Denny’s top of mind. So we strive to not only entertain our target, but gets them sharing and thinking about our content and ultimately visiting a Denny’s… that’s always the goal in our business.

Additionally, we ultimately look at broader business measures such as traffic, comp store sales, average check size, etc.

Whitler: What’s next? What work still needs to be done to continue converting Denny’s into a world-class digital leader?

Dillon: Our focus right now is in unlocking greater levels of engagement, in and out of the restaurant. Our operations team and our development team are doing a wonderful job with an improved atmosphere through remodels and delivering an outstanding experience for those guests who haven’t tried Denny’s in awhile. We are also putting heightened focus on food quality and ingredients. Over 50% of our menu is new in the last three years. But ultimately we are working to become more relevant in the lives of the millennial family. That includes taking advantage of strategic opportunities to drive engagement, such as our partnership with Dreamworks, designed to appeal to the Millennial parent/kids. And we have some additional tricks up our sleeve that are coming out in the near future. It’s a fun time to be at America’s Diner, for sure.

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