Feb. 13, 2015
Fazoli's is testing a revamp of its menu, service and environment that it hopes will drive more traffic through its doors and solidify its position as the brand of choice for value-conscious customers looking for an affordable fast casual experience.
"We're a fast casual brand for a demographic that's not frequently going to fast casual. We don't share a lot of guests with Panera or Chipotle, but we do share a lot of guests with McDonald's," says Jon Quinn, Fazoli's VP of Marketing. "Our research shows us that when they want to go some place nicer than McDonald's or Burger King, they'll go to Fazoli's."
Those diners are also tempted to visit casual dining concepts like the Olive Garden, a top competitor for Fazoli's during the dinner daypart. But with diners increasingly choosing to stay away from casual dining eateries like Olive Garden and Applebee's, Fazoli's CEO Carl T. Howard is positioning his brand to step into the gap with more interesting and varied menu options and more polished service.
As part of the effort, Fazoli's is beta testing new menu and service options in its stores in the Dayton, Ohio market. Updates include a menu revamp, changes to order expediting and dining room service, and a refresh of interior and exterior environmental elements. Howard plans to roll the menu and service changes out in the Lexington, Kentucky and Chattanooga, Tennessee markets next. If all goes well, the menu and service changes will roll out in all corporate stores nationwide by October.
Howard and his team used extensive research to take a deep dive into customer opinions. That research helped them hone in on what it would take for Fazoli's to bring former customers back again, and drive infrequent guests through the door on a more regular basis.
Frequency was lower for Fazoli's than for its quick service and fast casual counterparts, and Howard wants to push infrequent guests to move from visiting an average of once every 40 days to once a month.
What's keeping guests away? The same three issues kept surfacing for Fazoli's:
"It always boils down to the same three areas: it's always product, it's always service, it's always environment," says Howard.
While Fazoli's pasta dishes score very high with customers – often outscoring brands like Olive Garden and Macaroni Grill – the same wasn't the case for its sandwich, salad and pizza lines.
Customers indicated the offerings were too bland and too basic, and didn't offer them enough of a reason to come for a meal. Customers wanted "something they couldn't make at home," says Howard.
Fazoli's worked with Culinary Edge to revamp their sandwich and salad lines, and tackled an upgrade of their pizza offerings in-house.
The new menu includes six new salads, four new sandwiches and four new personal and large size pizzas, plus a "create your own pizza" option. Six new signature pastas have also been added, along with additional options for "build your own" pasta.
Fazoli's is enticing diners in the Dayton market to come in and give the new menu a try with a significant marketing effort that includes two flights of TV advertising, newspaper inserts, digital media, public relations and social media.
The centerpiece of the campaign is a microsite where visitors can sign up for a coupon to try a new item for free.
The campaign features messages aimed at Fazoli's value-conscious core customer, with taglines like "Italian for the people" and "Break breadsticks, not the bank."
The other big change Fazoli's is deploying as part of the revamp is a significant change to dining room service. The service shift has already started launching, with 70 corporate stores converted to the new model and 45 more awaiting the change.
Managers will shift responsibilities away from expediting dining room orders to circulating the dining room as guest ambassadors, refilling drinks, pre-busing tables and greeting guests.
It's a marked change from the managers' previous role, and the change has a considerable learning curve, Howard acknowledges.
"It's a big transition for them, because it's a whole new interaction point with the guest. It's going to take some getting used to. It's going to take some rehiring in attributes, because they need to have a different focus," says Howard.
Managers have received training, and receive weekly tips and updates. Area supervisors are also being tapped to do on-site coaching.
Howard believes the change will help Fazoli's differentiate further from quick-service and fast casual concepts.
"Service after the sale makes us really unique and no one else can touch that," says Howard.
Howard says Fazoli's is moving its guests away from being a "part-time employee" by having guest ambassadors refill drinks and bus tables, rather than having customers serve themselves.
"Our guests are here to sit down and take a break from their day. The last thing they want to do is come in and go to work," says Howard.
Changes were made to the back of the house to accommodate the shift in focus to dining room service. Lines had been divided into two expediting points: one for drive-thru and one for dining room. Now, the line is consolidated and one person expedites all orders so the manager can focus on serving the dining room.
The changes typically slow down throughput for the first thirty days, but then rates return to normal, according to Howard.
While the menu and service changes should extend to all corporate stores by October, Fazoli's is proceeding a little more cautiously with environmental updates.
Stores in the Dayton market received freshened up color schemes, new outdoor signage, new four-panel digital menu boards, new front doors and hardware and other updates at the cost of about $60,000 per unit.
The environmental changes won't be part of the testing in Lexington and Chattanooga. Howard will compare and contrast performance in the test markets to see whether or not the environmental changes seem to have an impact on customer satisfaction.
If the environmental changes have a positive impact, as Howard suspects they will, the contrast will help him justify making the investment in other units.
Just three days into the test, same store sales in the test market had jumped 40 percent. But after the newness wears off, how will Howard know if the revamp has been successful?
About a month into the test, Fazoli's will survey guests in-store to gauge their reaction, and compare those findings with its earlier research to see if they've moved the needle with guests in terms of their satisfaction with the menu, service and environment.
"Did we address those consumer concerns? Did the menu quality in their eyes go up? Did the value go up? Did the intent to return go up? That's all I need to worry about. Because if that happens, I know they'll come back more often and they won't go somewhere else," says Howard. "We really did all this on your true north star – the consumer. And we hope it works."