Marketing moves, and other positive levers
Hislop said Chuy’s continued to see meaningful progress from digital marketing in Q3, which included paid search, paid social media campaigns, and location-based mobile advertising. Targeted marketing has benefited stores, he added, as Chuy’s boosted sales in its Houston base post an April launch.
This past quarter, Chuy’s expanded targeted marketing to Orlando via similar means—promotional radio, strategic highway signage, and advertising on digital platforms like YouTube, Hulu, and Waze. Dallas is up next. “Our goal here is to focus on certain markets each quarter to better educate our customers on the Chuy's experience and drive frequency to our restaurants,” Hislop said.
Chuy’s put the brakes on new-market expansion at the back-end of 2018. It wanted to wait on an eSite tool it’s still developing that will provide psychographics profiles of top areas. Basically, smart tools to fuel smart growth, not just expansion for the sake of hitting a number.
Hislop said marketing is essential given that Chuy’s, at 104 (soon to be 100) units, is still a mid-sized brand that’s name value doesn’t always speak for itself. Dropping in new markets and trying to get the word was a costly and, to an extent, risky proposition.
Chuy’s believes the eSite functionality will take some of the gamble out.
But in the meantime, advertising is a major vehicle for Chuy’s to communicate those service differentiators Hislop mentioned earlier.
Chuy’s wanted to spend 2019 focusing on brand equity opportunities over sheer growth. That’s why it lowered openings to five to seven (six was the result) from 2018’s goal of eight to 12. The chain’s locations are spread across 19 states: Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Virginia.
And 15 of those have five or fewer restaurants.
Hislop said Chuy’s current targeted-marketing approach is a slow build. “But really, what's cool about social and digital, what's working, you can do a lot of, and what isn't working, you can switch, and that's what we're really been doing and we're touching all the markets,” he said.
Chuy’s really hadn’t pushed on social much before last December. This is really the first time it’s gotten in front of guests and introduced some of its defining experiences and worked on frequency and repeat visits, he added.
Chuy’s is still testing the real-estate tool and plans to roll it out in 2021 on a store-by-store basis. More than anything, though, the brand wants to make sure customer counts are positive for a period of time before it ramps up growth, Hislop said. “We believe that we're working in the right direction to make that happen, and we're going to continue on the direction,” he said.
Delivery and catering—a deal coming
In Q3, Chuy’s completed the systemwide implementation of its new table management system with Wisely, designed to improve front-of-the-house efficiency. It’s since added functionality to gather customer data, like opt-in WiFi services to capture emails that can be tied to guests ordering during visits as well as online. Ultimately, Chuy’s will be able to leverage integrated intelligence to launch a loyalty program that presents customers with more personalized incentives.
Chuy’s introduced catering to two additional markets in the period, with two on deck for Q4. By year’s end, the company expects to have the service live in 11 markets. In Q3, catering contributed about $1.5 million in revenue. It was just $369,000 this time a year ago.
Additionally, Chuy’s tested Olo’s Dispatch service in two restaurants this past quarter, which allows it to synchronize online ordering and delivery direct from its website. The company plans to test further in Q4 and go systemwide by Q2 2020.
Hislop also noted Chuy’s is in the process of negotiating a national contract with a delivery provider that can integrate into its point of sale.
Off-premises represented about 12.9 percent of sales in Q3, up 13.7 percent, year-over-year. Delivery mixes about 2.5 percent of that.