Chipotle’s last reported quarter was a bit more palatable than some analysts had projected—revenues jumped 19.5 percent and same-store sales rose 3.5 percent. But those results were largely the outcome of a price hike at Chipotle and some argue that, in this economy, that’s not necessarily the best play. Still, the chain believes there’s a lot of room for growth. On the marketing front, that is manifest by the appointment of Mark Crumpacker as its first CMO. Crumpacker, who worked as a consultant to the chain for years, is in the midst of deciding how to build on Chipotle’s so-far, word-of-mouth-based brand. Crumpacker discussed how he is deciding which media to use and how to best employ a recent ethnographic study about the chain. Excerpts of the conversation are below:
Brandweek: Congrats on the new position as the first CMO. As there was no predecessor on the job, where do you start? Does that somehow make it easier?
Mark Crumpacker: For me, it’s a good thing that there wasn’t a predecessor. It’s not as though I’m coming in and undoing something that was done improperly. I’m not cleaning up a mess or anything. I’ll just be turning up the volume on what they’ve been doing in the past. They are a brilliantly operated company; they’ve just really never had a focus on marketing.
BW: Top three items on your to-do list?
MC: The first thing I’ve had to do is really learn a lot more about the customer. We just finished a big research study [in conjunction with Greenberg Brand Strategy]. It’s an ethnography study in which we were trying to figure out who our customer was and why they were coming to Chipotle.
The second thing we’re in the process of doing right now is to develop a solid marketing strategy. We’re working on this with our whole marketing team, both internal and external partners, including our newly hired agency, Butler, Shine, Stern & Partners.
And after that, the third thing is taking that strategy and rolling it out across new touch points with our consumers. In the past, we’ve done a lot of outdoor ads, we’ve done some radio, but now we’re really looking at a lot of different touch points, both in-store and also a lot more online and mobile [channels]. We’re rolling out an iPhone application in the next couple of months and really just going out there with different ways of connecting with the consumer.
BW: What are some of the study’s key findings?
MC: We found that people are coming to Chipotle because they love the food, which is great. But we found that they are not using the fact that we spend a lot of time and effort on making all of our food as sustainably and naturally-raised as possible. We all assumed that that was a big driving factor. Even people who were coming to Chipotle for a long time, they appreciate it, but it’s not the reason they are coming in. They just love the way the food tastes. That was a little bit of a surprise to us.
BW: Word-of-mouth used to work really well for the brand, but not anymore. What’s the next advertising medium Chipotle will embrace?
MC: That’s been the big question. That’s what we had to ask all of the agencies that were part of the review. Chipotle continues to be a word-of-mouth brand, but there is a limit to how many people you can tell about this new restaurant when you discover there are 40 of them in your city.
But we can give them new things to talk about. It’ll be more along the lines of, ‘Oh, did you know Chipotle is doing this? Did you know they’ve got all these great things going on?’ We’ll be spending a significant amount of our energy in terms of ramping up those conversations that consumers are having.
BW: Estimated media/marketing budget for 2009? And where will the bulk of the media buying come from?
MC: It’s not a significant increase from what we did last year ($7 to $10 million annually, excluding online, per Nielsen Monitor-Plus). In the past, a lot of our marketing budget goes to what we call local store marketing. That is going to continue to be a major part of what we do, but we’ll have a more nationally focused campaign. We’ll divert a little of that money into more traditional media, more on a national, as opposed to local level. We’ll also be doing less in terms of sports sponsorships, such as the amount of money we’ve committed in the past to our Tour de France sponsorship.
BW: What’s your take on value messaging? Does any of that have a place in Chipotle’s advertising? Seems like that’s all that brands are talking about nowadays.
MC: We’ve always had a value message, even though it hasn’t been explicitly stated. We have really large portions of food and a big chunk of our customers really recognize that. But I don’t think you’ll be seeing the value messaging in the advertising. That’s what everyone is marketing. We are probably going to make some slight menu changes. They’re primarily going to be around encouraging people to see more variety in our menu than it is in actually promoting value.
BW: And your new agency of record—Butler, Shine, Stern & Partners. What made you choose them over other agencies vying for the account?
MC: We went through an elaborate selection process: 26 agencies to get down to this one. All 26 had to present basic innovation ideas and seven were asked to present their capabilities and three were paid to do a 10-week assignment. We really got to know the last three agencies during the last 10 weeks because it became apparent pretty quickly that Butler understood the quirky nature of the Chipotle brand. They have the Mini account and the Converse account, both of which do really nice jobs of marketing the brands without a very corporate feel to them. Both have a very grassroots, word-of-mouth feeling to them.
BW: And now, somewhat off topic (but not really): Favorite Chipotle burrito and how do you like it served?
MC: I’ve been eating at Chipotle for the past 15 years and, like most of our customers—before I took this position—I’d order the same thing. Since I’ve taken this job, I’ve made it my goal to try everything on the menu. Turns out the thing that I now love is carnitas. I usually have a burrito bowl with pinto beans, but I’ve never tried the carnitas until now. I’ve talked to guys who have been going to Chipotle two, three days a week for the past eight to 10 years, and they say, ‘We always have the same thing.’ That’s something I’d like to change with our marketing. I can tell you I like my new carnita bowl better than I like my chicken one.