How do you build a word-of-mouth following for your product or service—and then refrain from screwing it up if you're lucky enough for the concept to gain traction? That's one challenge most companies would love to wrestle with, but few do. California's fast-food chain In-N-Out Burger is an exception, with a famously devoted customer base that inspires envy throughout the industry—and brand recognition well beyond its geographic reach. But instead of pouring hundreds of millions of dollars into ad campaigns like rivals Burger King (BKC) and McDonald's (MCD), In-N-Out relies mainly on its carefully located stores, billboards, bumper stickers, T-shirts, and its own rabid fans to broadcast its message. In this excerpt from her new book, In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules BusinessWeek writer Stacy Perman shows how the chain's marketing strategy works.
Despite some flickers of media attention since its founding in 1948, nothing gave press-shy In-N-Out more publicity than its own longtime customers. Staying simple and remaining focused on its core values (see our previous excerpt for more) had allowed In-N-Out to stay true to its loyal fan base. And it was precisely those customers who often did the heavy lifting, frequently boasting about their zealous affection for the chain to everybody else. Regulars engaged in an ongoing contest, trying to outdo each other on how many hamburgers they could eat at any one time. Some regulars also assumed the responsibility of bringing in a constant stream of new devotees, an act generally referred to as "the conversion."
A Double-Double, Twice
At the same time, without corporate solicitation, a roster of celebrity names regularly endorsed the chain. "When I first joined the band, we must have eaten there at least three days a week," recalled rocker Sammy Hagar, who signed up as the front man for Van Halen in 1985. "We were in the studio recording 5150, and we'd send someone to go get food, and we'd talk about sushi or pizza and always end up with In-N-Out." Gordon Ramsay, the British celebrity chef with 12 Michelin stars, global fame, and profanity-laced rants, once admitted to sitting down for a Double-Double and then "minutes later I drove back 'round and got the same thing again to take away." PGA golf champ Phil Mickelson mentioned the chain so often that whenever he fell into a losing streak, sportswriters began suggesting that he cut back on the Double-Doubles.
Before long, tourists got wind of In-N-Out Burger and began making their own pilgrimages to what was considered the quintessential Southern California attraction. Fans passed the "secret menu" on to one another and described the sublime pleasures of tucking into an Animal Style cheeseburger. Vegetarians talked up the chain's off-menu Grilled Cheese. Expatriate Californians pined for their favorite burger, and In-N-Out T-shirts were the epitome of cool. Analysts spoke of In-N-Out's "uncopyable advantage," while everybody else talked about its unparalleled cult following. According to William Martin, who devised the training curriculum for In-N-Out University, the Snyders and the rest of the chain's highest echelon were definitely conscious of the mystique that had developed around In-N-Out. "They were all aware of it, and they loved it," he said. "But they had no explanation for it." That didn't mean, however, that they didn't know how use it.
Under Rich Snyder, son of founders Esther and Harry Snyder, who became president in 1976, the chain was careful to ensure that its message—like the company itself—remained focused on the product. Consumers felt a connection with In-N-Out's simple, almost quaint brand, and it was clear that Rich knew the value in preserving that.
Since its inception, In-N-Out's signature yellow boomerang arrow logo had served as an important advertising feature. Echoing the days when roadside diners attracted travelers with their kitschy neon architecture, stores strategically placed along freeway off-ramps served much the same purpose. As it turned out, In-N-Out's real estate was one of its best marketing strategies. It deployed a deceptively simple billboard strategy that traded heavily on the chain's postwar image. Intentionally placing the large signs on streets leading to an In-N-Out, they often said little more than "In-N-Out Burger 2.5 Miles Ahead." Continuing with that theme and playing up its roots as a drive-through, In-N-Out produced a compact, pocket-size location booklet, a toll-free number, and a map finder on its Web site that plotted all the In-N-Out stores in any given location.
Honking for Bumper Stickers
One of In-N-Out's most successful marketing strategies came in the form of bumper stickers. In Southern California, starting in the early 1980s, placing an In-N-Out sticker on the back of one's car signified membership in a peculiar sort of club; all along the freeways, horns were honked, thumbs were raised, and heads were tipped in recognition. In 1984, Rich used the widespread popularity of the stickers to launch one of In-N-Out's largest and most successful promotional initiatives: a chainwide sweepstakes contest. During several monthlong periods, In-N-Out gave away its sought-after stickers, and spotters were instructed to jot down the license plate numbers of cars bearing the stickers. The numbers were then entered into a series of drawings. Prizes included trips to Hawaii, microwave ovens, video recorders, and In-N-Out T-shirts. Advertised on billboards all over the greater Los Angeles area, customers helped the campaign with a grass-roots effort of their own, passing the word along.
The promotion combined two of Los Angeles's cultural icons (hamburgers and cars), played up In-N-Out's core values, and was relatively inexpensive to put on. It also packed an incredible public relations wallop. As the trade publication Nation's Restaurant News marveled at the time, "The burger Goliaths doing business in Southern California must surely envy the kind of hometown customer enthusiasm which can turn little David in the form of In-N-Out into a self-advertising car cult."
Straightforward and uncomplicated, the chain's marketing efforts really added up to an awareness campaign that casually reminded people about In-N-Out. As Robert LePlae, the president of advertising giant TBWA/Chiat/Day, acknowledged, "Their marketing is really brilliant. The best marketing is word of mouth, and they have that. You can't get that through traditional media." Moreover, LePlae was full of praise for the simple fact that In-N-Out hadn't sold its soul. "They don't abuse the privilege that they have built up with their customers. They haven't commercialized the 'secret menu.' There is a powerful trust between the company and the customers that is deeply ingrained. I'm not sure if it was intentional, but it is not the kind of thing a big, massive company could do. They would merchandise every little thing."
While In-N-Out's profile rose considerably, the Snyders remained guarded, at least publicly. Rich clearly saw the importance of press coverage, but stayed somewhat wary of the media. The chain adamantly refused to discuss its operating strategies or sales figures, hewing literally to the meaning of the phrase "private, family-owned company." Perhaps naively, the chain did not want to come across as if it were actually seeking publicity.
Although it was most likely unintentional, this enigmatic quality added a definite layer of intrigue to the chain. It was a lesson the Snyders took to heart. As In-N-Out's onetime chief financial officer Steve Tanner once said, "If you have to tell somebody you're something, you're probably not."
Excerpted from In-N-Out Burger by Stacy Perman. Copyright© 2009 by Stacy Perman. By permission of HarperCollins Publishers.
Perman is a staff writer for BusinessWeek in New York.