How Five Guys, a Brand Built on Customer Experience, Finally Warmed Up to Advertising

To customers, Five Guys is best known as a no-frills, dependably satisfying burger chain with a red-and-white aesthetic and a minimalist menu. But in the marketing world, Five Guys is known for being one of the rarest unicorns: an international chain that doesn't advertise. Since being founded in Washington, D.C., in 1986, the brand has balked at paid ads, focusing instead on its in-store experience and, as it grew across the nation and then the globe, the publicity boost each time it expanded into a new market. Today the company has 1,551 locations across 12 countries and continues to expand at a pace of roughly 100 new locations per year. But sadly for all the marketing contrarians who love to cite Five Guys as an avowed non-advertiser, the chain has changed up its approach in recent years. Today, Five Guys embraces digital advertising via social, YouTube and programmatic—though admittedly at a far smaller level than what it spends on quality assurance, which relies on a large-scale "secret shopper" program that rewards all employees of a location that performs well when reviewed anonymously. So what led to this change of heart for the brand? As part of Adweek's City Spotlight on Washington, D.C., we talked to Five Guys' vp of marketing and communications, Molly Catalano, whom you'll also find on our list of D.C. Rising Brand Stars. Here's what she had to say about the chain's growth, marketing philosophy and intense commitment to customer experience: Adweek: Five Guys is often listed as one of those brands that "doesn't advertise." Is that literally true? [kickout id="1"] Molly Catalano: Up until three years ago, it was literally true. We only did internal marketing programs in store. We have an incentive program, normal PR, organic social. Now we have started to do some [advertising], but we've only stayed in the digital space. So we're just doing some social media, youtube and programmatic stuff. But that's all recent. What would you say led to that change in deciding to start using paid media? We were on a rapid growth pace, basically from when the Murrell family decided to franchise around 2003 and then it just went crazy in terms of growth in the U.S. We were opening stores all the time. In 2008 and 2009, we were opening 200-plus stores a year. There was a lot of press because we were just showing up everywhere and people were discovering us for the first time. President Obama came by, so that was really helpful in the press department. We didn't know he was doing that, but he did. So that helped in terms of publicity. [kickout id="2"] We continue to open stores in the U.S. and then we're opening a ton internationally. But you can't open 200 stores a year when you're a restaurant concept, so now we open about 100 a year, and the natural press coverage just isn't as much. Our customers continue to be really loyal and very passionate, but we felt like we should evolve and be available and top of mind. That's when we tried to decide a few things. It's still a very small percentage of what we spend. Most of our marketing budget is still our secret-shopper program, where we give bonuses to our crew. So the majority of our marketing funds still go there. As someone who once worked in retail, I'm always terrified by the phrase "secret shopper." How would you describe your program? (Laughing.) You're right, I tell our training classes and new managers: "I know this concept isn't new. If you've worked in retail or you've worked in restaurants, you're aware of the concept of a secret shopper." We do it similarly to others; we pay a third-party company to come in and be customers in our stores and fill out an evaluation. What's different about Five Guys is that we do it way more frequently. It's about twice a week. When you say twice a week, you mean twice a week per location? Per location, exactly. This is in all our locations worldwide. Depending how well the store does on their evaluation, they get a bonus. And it's signifcant. Last year we spent over $22 million in the U.S. paying the crew who did well on secret shopper. That does not include the third party [provider], that's just the crew. How does that compare to your ad spend? It's about five or six times. Obviously the goal there is a uniform and high-quality customer experience. It sounds like this must be tremendously important to you. It is, and it's just making sure our employees are doing what we expect of them. And I think now it's ingrained in our culture. It's a culture of going above and beyond and also a sense of ownership. We always said, "What's someone standing at the cash register's motivation to move faster?" We want that person to think, "I want to move faster because it's going to benefit me." And hey maybe there's a secret shopper in line, and if you do well, you—the cashier—are going to get more money. So everyone takes that extra step to move a little faster, double check to make sure it's a correct order, double check that the tables are clean and that kind of thing. That doesn't necessarily bring new customers in the door, but I'm sure there's some word-of-mouth benefit to that. We've been built on word of mouth. We focus on making sure the in-store experience is the best it possibly can be and putting the money in the hands of the people affecting that experience. You've been at Five Guys 13 years. How has this huge growth nationally and internationally changed your job? My job and the direction of marketing has only changed in terms of what's available to us as marketers. We were against traditional [paid] media just because we didn't think we had enough money. We didn't think we could get the best return, so we thought, "We think we can use this money to pay our employees more, and that will give us the best return." We didn't think a TV ad is going to do that. [kickout id="3"] I still don't think a TV ad would be able to do that, but now there's Facebook, Instagram and YouTube, which are much more cost-effective and measurable and engaging. We feel like this is a medium that fits for us as a brand. I eat Five Guys like a Tyrannosaurus. It's this big, messy thing, and I get it with everything on it. It's not the prettiest thing. I kind of want to face away from the crowd when I eat it. (Laughing.) Yeah, exactly. In this Instagram era where everything has to look perfect, has that been a challenge for you? Food photography is a very hot topic for us. The Murrells, the owners of Five Guys, they never wanted to use it. They started this business in 1986, and at the time the only restaurants using food photography were low-end Chinese restaurants that showed their menu, and it would faded out front. Or you see a picture of a beautiful meal, and that's not what you get. So they said: "We never want to do that. That's not what's important. We want people to have their own experience. Each burger is unique. Let's never use food photography." But now people take pictures of every single meal. And amazingly, people take good photos of our burgers. In social, we use mostly user-generated content. People do a good job. It looks real, because it is. We didn't stage it. It's not perfectly placed. So it's actually been really good for us. [kickout id="4"] How has your category changed? How much more competitive is it than it was a few years ago? It's changed tremendously. Of the fast-casual burger segment, we have the majority. I think we basically have 50 percent of it, so we're by far the biggest in terms of store count. We've held our majority, but there certainly are more. I think there's room for all of us. People just really like hamburgers. It was interesting seeing IHOP go big on its burger menu. Is that something we're going to see more and more? I feel like it's been going for a while. A few years ago, some of the restaurant publications were saying, "Is the burger bubble over?" But it's only grown from there. So I'm not sure where it's going, but I'm happy to be in the burger business. Is it a rising-tide thing or has it made your job harder? I think it's a rising tide. Maybe it's Five Guys' culture, but we don't really look at competitors. We just do our thing and wish others well. [kickout id="5"] Does being founded in the Washington, D.C., area shape the brand in a different way than if it'd been founded in New York or Columbus or Atlanta? We're family owned, and the family is still here. We're all very local. This is where they grew up, so it feels like hometown. When we started growing, D.C. was not necessarily known as a food town. It feels like D.C. embraced us and said, "This is where Five Guys started." We get people all the time telling us stories about their first Five Guys. Most CMOs rotate to new companies every few years. What has kept you at Five Guys for so long? It's just constantly fun and exciting. Being part of this growth is just super awesome. I remember being excited about our 500th store opening, and that was a big deal. Then I was at our first location in London, in Covent Garden, a super busy area of London and we opened on the Fourth of July. It was crazy imagining this once hole-in-the-wall burger stand being in this super-populous, beautiful building. It's just so fun to be a part of that. For more from Adweek's City Spotlight: Washington, D.C., check out our list of the District's Rising Brand Stars and our feature on how D.C. has become a hub of inclusive, female-led entrepreneurship.