In-N-Out Burger's Marketing Magic

How the restaurant chain manages its cult of popularity to encourage newbies and keep longtime customers coming back

By Stacy Perman

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DUKE SHERMAN

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.

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