Outback Steakhouse Marketing, Consumer Trends and Perceptions

Part
01
of three
Part
01

Outback Steakhouse Consumer Perceptions

Like other casual dining restaurants in America, Outback Steakhouse is struggling to keep sales up in a constantly shifting landscape, especially with millennials who are visiting malls, where these restaurants are usually located, less and less. Research has even shown that 30% of malls will close in the next 10 years, possibly also bringing chains like Outback Steakhouse down with them - unless they continue to innovate. We looked at public sentiment and articles over the course of 5 years and also looked at trends and social media sentiment to gather an adequate picture of how consumers view Outback Steakhouse and some of its competitors. We chose to focus on Texas Roadhouse and Longhorn Steakhouse, which along with Outback Steakhouse, are larger chains with more restaurants than their counterparts. For social media analysis, especially sentiment analysis, we used Brand24 and we also used Google Trends as an indicator for interest.

CURRENT PERCEPTION OF OUTBACK STEAKHOUSE

Public sentiment now towards Outback Steakhouse is generally positive. On social media, mentions of them on blogs, the web, forum, news sites, and social media, have been 92.8% positive. Their current positive score may be because of some menu changes they have made recently.

On September 26, 2018, Outback Steakhouse brought in an unlimited shrimp deal. Since then, 35% of US consumers aged 18 and over said they would consider dining at the restaurant, and this number grew from 32% before that deal happened. This satisfaction made people talk about the restaurant more, as according to their Word of Mouth score, there was an increase from 17% to 23% of conversation engagement.

HOW IT HAS CHANGED OVER THE PAST FIVE YEARS

In 2014, when the American Customer Satisfaction Index looked at the top restaurants in terms of customer satisfaction, Outback Steakhouse scored near the top with a score of 80, which tied with Olive Garden. This score has held steady over the past five years and only dropped by one point in 2018, to tie with Red Lobster, Red Robin, and TGI Fridays at 79.

On a favorability scale, 51% of customers said that Outback Steakhouse was their favorite steakhouse chain in 2014, which fell behind Capital Grille at 77%, Texas Roadhouse at 61%, The Keg at 57%, and Longhorn Steakhouse at 55%. This favorability has held steady for Outback Steakhouse over the past 5 years, dropping by only one point in 2018.

When looking at Google Trends over the last 5 years, it can be seen that interest in the brand has been mostly steady, dropping only slightly over the past year.

HOW CONSUMERS PERCEIVE OUTBACK COMPARED TO COMPETITORS

When looking at Google Trends which measures how much the public is interested in a certain topic, interest in Outback Steakhouse decreased very slightly since 2014. Interest in Longhorn Steakhouse has also been somewhat stagnant, as interest in the restaurant has remained under Outback Steakhouse for the last 5 years. Texas Roadhouse, however, has been a breakout star, as interest in it has far surpassed both restaurants.

The group that is thought to be driving the change most is millennials. Since 2013, between 4% and 8% of adults aged 18 to 34 say they have patronized a Texas Roadhouse in the past 30 days. Outback Steakhouse has fallen behind Texas Roadhouse on a number of metircs, especially since 2016.

One thing all examined companies have in common is that they are facing stiffer competition from smaller chains and independent operators. Also, the casual dining sector as a whole averages a 3% current customer level, but Outback Steakhouse and Texas Roadhouse receive far more frequent millennial customers.

In terms of sentiment, they are all viewed very positively online. While Outback Steakhouse has a 92.8% positive sentiment, Texas Roadhouse has a slightly higher 93.3% positive sentiment, and Longhorn Steakhouse has a 92% sentiment. In the last 30 days, it was Texas Roadhouse that was mentioned the most, with Outback Steakhouse coming in second.

CONCLUSION

Even though consumer behavior in casual dining has been shifting dramatically, Outback Steakhouse has been mostly consistent with public perception, even with stiff competition from Texas Roadhouse.
Part
02
of three
Part
02

Outback Marketing Campaigns

In the past two years, there have been no notable marketing campaigns by Outback Steakhouse, as the most recent campaign is from 2015. We have detailed this campaign as well as an earlier one from 2013. Below, please find our methodology and findings.

Methodology

Our research team first searched for notable marketing campaigns on the Outback Steakhouse website and the Outback Steakhouse Press Room in hopes of finding notable marketing campaigns. However, our team found that the most recent campaign listed on the website was "Bold at Steak" back in 2015. Our logic was that if an older campaign was published in Outback's Press Room, all recent campaigns would also be published. However, we wanted to verify this to ensure we provided the most accurate information, so we continued our search.

Our second research strategy was to conduct an exhaustive press search in hopes of finding more recent campaigns. Our logic behind this was that since the purpose of a campaign is to increase consumer awareness for a particular product or of a particular business, media outlets would be ideal platforms to achieve such a goal. Our team conducted an exhaustive search of trusted media outlets such as Forbes, US News, and Restaurant Business Online. Our team was able to locate that the restaurant has recently launched a "new fast-casual sandwich concept at Aussie Grill by Outback"—which is scheduled to open this month in Tampa, Florida. Unfortunately, we did not find any additional information regarding recent campaigns.

As a third strategy we searched the company's social media platforms to include Instagram and Twitter. Our team felt confident that if there were more recent marketing campaigns, they would be published on the company's social media websites. Our logic was that social media is one of the most popular platforms for digital marketing and helps companies reach millions of customers. It would be highly improbable for a company to launch a campaign and not include it on their social media platforms.

Lastly, we expanded our search dates in hopes of finding additional campaigns. We found and additional campaign from 2013. Although, this campaign was outdated, we have included due to a lack of more recent information available.

FINDINGS

2015 "BOLD AT STEAK" CAMPAIGN

Outback Steakhouse launched it's “Bold at Steak” brand campaign in May 2015. The campaign focused on bold flavors from Outback's wood fired grill and included a "series of new commercials, in-restaurant steak training re-certification for all Outback employees, a new menu design and fresh menu innovations, including the new Wood-Fire Grilled Flat Iron Steak, starting at just $13.99."

The multi-media, multi-platform campaign was developed by Deutsch NY and featured the tagline, “Outback Steakhouse. Done Right.” The creative made its debut in May 2015 with one 30-second and two 15-second commercials on primetime television. The campaign was integrated across numerous marketing channels, including "national television and digital advertising, national public relations, in-restaurant point-of-sale materials and an increased focus on social media and mobile advertising, including a dedicated spend with Instagram making Outback the first causal dining restaurant to launch a campaign on the platform."

Outback Steakhouse launched a nation-wide petition as part of this campaign to make steak the official food of the United States. The campaign began in May 27, 2015, however a specific end date was not disclosed.

2013 "NO RULES" CAMPAIGN

In September 2013, Outback Steakhouse launched its national-broadcast advertising campaign "No Rules, Just Right." A specific end date was not disclosed. The campaign highlighted "great food at affordable prices, a top-quality dining experience, and putting Outback actually in the Outback."

The campaign, created by Deutsch NY, appeared on a series of commercials on cable TV. The campaign features the beautiful landscape and peaceful terrain of Australia and emphasized the "Outback's no worries' attitude."

Chief Marketing Officer, Mike Kappitt stated in response to the campaign,"This is who we are and it's the foundation for our culture we'll break the rules to do what it takes to make sure we deliver a dining experience that's just right each and every time."
Part
03
of three
Part
03

QSR & Casual Dining Loyalty Program Trends

Key consumer trends around loyalty programs for quick service and casual dining restaurants in the United States include the growing preference for mobile app-based loyalty programs and the shift toward tiered loyalty programs. Though restaurants still use email to welcome customers, inform them of discounts or offers, or greet them on holidays or other special days, there are no indications that restaurants are focusing solely on email to improve customer loyalty. Loyalty programs are a great tool for driving traffic, as there are accounts of some loyalty programs accounting for at most half of restaurant sales.

METHODOLOGY

As we were unable to find an article or report that readily provides all the requested information, we decided to look at what leading quick service and casual dining restaurants in the United States have been doing recently in regard to loyalty programs, and to check what customers are currently looking for in these programs. We looked for customer surveys and examined restaurant-specific publications as well. The insights that we were able to gather from these searches enabled us to prepare a list of trends, as can be seen below. In the few instances where we could not find information specific to the quick service and casual dining restaurants in the United States, we broadened our search to restaurants in general.

INTERACTION WITH EMAILS ABOUT LOYALTY PROGRAMS AND REWARDS

While information on how customers interact with email messages about loyalty programs and rewards could not be located in the public domain and the information that is available focuses on restaurant email marketing in general, there are indications that the average open rate and the average click rate in the restaurant industry are 15.2% and 1.3%, respectively. The best month to email customers is December, the best day to email customers is Friday, the best time to email customers is between 1pm and 5pm, and the best months for mobile email marketing are March and April. Customers are more receptive to email messages whose length of subject line is 20 to 50 characters only. Compared to mass email messages whose average open and click rates are 15.2% and 1%, personalized email messages have higher average open and click rates at 18.7% and 2%. Restaurants communicate with customers via email for various reasons, such as welcoming new customers, informing customers about loyalty programs, discounts, or coupons, notifying customers about new menu items, sending surveys, and greeting customers on holidays or other special days.

MOST PREFERRED LOYALTY PROGRAM CHANNELS

When it comes loyalty program channels, restaurant customers in the United States are likely finding plastic swipe cards, paper stamp cards, and mobile phone apps more preferable than registered phone numbers and mobile wallets. Oracle's survey of 6,500 restaurant customers in eight countries, including the United States, indicates that 62% of restaurant customers prefer plastic swipe cards, 45% prefer paper stamp cards, 40% prefer mobile phone apps, 26% prefer registered phone numbers, and 14% prefer mobile wallets. The preference for mobile phone apps is more pronounced among millennials and Gen Xers, with 56% of millennials preferring mobile apps and 50% of Gen Xers preferring mobile apps.

There are indications that quick service and casual dining restaurant customers in the United States are finding app-based loyalty programs more preferable than email-based loyalty programs. For example, according to an article published by Restaurant Dive, "loyalty programs will continue to drive traffic to QSR, and apps lead the charge in attracting customers." This same article also states that "not only have mobile apps been proven to build brand loyalty," they bolster profits as well. After it was launched, Chick-fil-A's loyalty app quickly rose to the top of iTunes's list of most downloaded apps. Based on an article released by The Manifest, "50% of smartphone owners use a restaurant loyalty app regularly," and the most popular restaurant loyalty apps are those of Starbucks, Domino's, Pizza Hut, McDonald's, Panera Bread, and Dunkin' Donuts. We note, however, that according to an article published by Epsilon, "millennials aren’t sold on engaging with QSRs solely via mobile apps," and 31% of millennials prefer communications to be delivered via email.

MOST EFFECTIVE LOYALTY PROGRAMS

The type of loyalty program that drives the most traffic in the United States are revolving around mobile app-based loyalty programs. The quick service restaurants that lead in terms of customer loyalty include Starbucks, Dunkin' Donuts, Chick-fil-A, Panera Bread, Chipotle, and Subway, and a look at the loyalty programs of these leading restaurants reveals that all of them have loyalty apps. To illustrate just how effective these loyalty programs are in driving traffic, 36% of Starbucks's sales in the United States in the second quarter of 2017 were accounted for by transactions processed through its loyalty program, My Starbucks Rewards Loyalty Program. Also, the average ticket size of Starbucks's loyalty members is three times larger than the average ticket size of the average customer. Panera Bread's loyalty program, MyPanera, has over 25 million members, almost 8% of the population of the United States, while Dunkin' Donuts's DD Perks Rewards Program has over 6 million members. Half of Panera's transactions take place on MyPanera cards. The most effective restaurant loyalty programs are the ones that allow restaurants to "quickly organize their data into a singular view to begin to track customer behavior and make informed decisions."

Restaurants appear to be shifting to tiered loyalty programs, however, to adapt to changing customer needs. Both Starbucks and Chick-fil-A have recently rolled out updates to its loyalty programs, with these updates intended to provide more options or levels for redeeming rewards and to facilitate the program's seamless integration with the rest of their technology stack.

MOST ATTRACTIVE LOYALTY PROGRAM FEATURES

Restaurant customers in the United States are finding free products and discounts the most attractive loyalty program rewards, according to a survey commissioned by Oracle in 2018. The most attractive type of reward for 67% of restaurant customers in the country is free products (e.g. 10th coffee is free), while for 64% of restaurant owners, it is a discount on each purchase (e.g., 5% discount). Restaurant customers in the country are also finding preferential treatment (e.g., birthday offers) far more attractive than priority access to new products, invitations to special events such as menu tastings and store openings, ability to pay through loyalty app, third party offers, and charity-related rewards. Whereas 47% of restaurant guests in the country want preferential treatment from a loyalty program, only 29% want priority access to new products, only 26% want invitations to special events, only 24% want the ability to pay through loyalty app, only 20% want third-party offers, and only 19% want charity-related rewards.

Globally, 73% of restaurant guests say relevant rewards will prompt them to join a loyalty program. Sixty-eight percent say "rewards must be easy to redeem," while 55% say "the program must be simple to use and understand." We assume more or less the same can be said about the United States, as these findings were based on a sample of 6,500 consumers from eight countries, including the United States, the United Kingdom, France, Japan, and Australia. The survey's finding that the restaurants in the United States with the strongest loyalty programs are Panera Bread, TGI Friday's, Starbucks, AppleBees, and KFC suggest that quick service and casual dining restaurants were considered.

MOST COMMON REASONS BEHIND DISINTEREST IN LOYALTY PROGRAMS

In the United States, restaurant customers who have not joined a loyalty program are revealing that they do not visit the same restaurants enough, sign ups require a lot of personal information, and the rewards do not interest them. When asked about the things that deter them from joining a loyalty program, 46% of restaurant customers in the country replied they do not visit the same restaurants enough, 40% replied sign ups require a lot of personal information, 35% replied they do not find the rewards interesting, 32% replied sign ups take a lot of time or are difficult to understand, 13% replied they never join loyalty programs, and 6% cited other reasons.

MOST COMMON REASONS FOR LEAVING A LOYALTY PROGRAM

In the United States, restaurant customers who have left a loyalty program are revealing that the rewards expire more quickly than desired, rewards are too hard to earn, and rewards are too hard to claim or redeem. When asked about the reasons they have left a loyalty program, 50% of restaurant customers in the country replied rewards expire more quickly than desired, 48% replied rewards are too hard to earn, 45% replied rewards are too hard to claim or redeem, 39% replied rewards are irrelevant to them, 29% replied the program requires a lot of personal information, and 25% replied they have stopped eating at the restaurant.

MOST IMPORTANT EXPERIENTIAL ELEMENTS

Quick service, fast casual, and casual restaurant customers in the United States are seeking different types of experiences across dining formats, according to Deloitte. Based on Deloitte's survey of over 2,000 quick service, fast casual, and casual restaurant customers in the country, sit-down customers want experiences that engage them, while carry-out and delivery customers want experiences that empower them. Sit-down customers gave engagement a score of 67, while carry-out and delivery customers gave empowerment scores of 71 and 70, respectively.



Sources
Sources

From Part 03
Quotes
  • "Restaurants with the most effective loyalty programs can quickly organize their data into a singular view to begin to track customer behavior and make informed decisions. "
Quotes
  • "Those who’ve excelled have done so by ensuring their loyalty program offers something of value to both the company and its customers, and evolving to meet consumer demand. Savvy companies (particularly those that think strategically) are even looking beyond traditional rewards, attempting to solve customer problems and soothe pain points and occasionally even carving out a new niche in the process."
Quotes
  • "The most engaging restaurant loyalty programs will be the ones that work best for all parties involved. Digitally driven, personalized experiences are key for diners, while restaurant operators need programs that seamlessly integrate with the rest of their technology stack, from the point-of-sale system to delivery and online ordering."
Quotes
  • "Operators seek to boost visits and drive check averages by adding complexity to consumer rewards."
Quotes
  • "But millennials aren’t sold on engaging with QSRs solely via mobile apps—they need to see the benefit to them."
Quotes
  • "Exactly 50% of smartphone owners say they regularly use branded restaurant loyalty apps."
Quotes
  • "Loyalty programs will continue to drive traffic to QSR, and apps lead the charge in attracting customers."
Quotes
  • "Over half of your customers aged 18-50 want restaurants to offer loyalty programs via mobile app. The millennial respondents were most likely to want to use mobile apps for loyalty programs (56%), but 50% of the next generation up (Gen Xers) also said that that this method was preferable. "
Quotes
  • "We crunched some data to prove our point and found that when the average open and click rate of the industry is around 15,2% and 1% accordingly, the same numbers with personalization raise to 18,7% and almost 2%."