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Shaking things up

Shaking things up

This post is part of NRN's newsroom blog, Reporter's Notebook.

The news Tuesday that Steak 'n Shake was first out of the gate in 2012 with a significant promotion — which didn't involve the diet- and resolution-related themes I expected from restaurant chains — struck me in a way I had not felt for a couple of years.

However, I realized pretty quickly why the brand's announcement of a freeze on its menu prices got me thinking about the beginning of 2010. If done right, Steak 'n Shake's promotion could be as big as the "Pizza Turnaround" campaign for Domino's Pizza, which broke just before New Year's ushered in 2010 and two successful years for that chain.

Before I explain the parallels of these different promotions, let me stress that I think Steak 'n Shake could be on to something big by announcing publicly that it won't raise prices this year. I'm not definitively predicting a smash like Domino's campaign, which yielded a 14.3-percent lift in same-store sales in that first quarter of 2010 — a number so momentous I can cite it from memory. But I see similar potential for Steak n Shake, for a few reasons:

It follows a steady string of innovations that worked. Even before Steak 'n Shake's price freeze, which I'm slotting at more than a gimmick but probably less than a game changer, the brand had put together several solid moves that have turned around same-store sales and traffic. Since winning control of Steak 'n Shake through a proxy fight, CEO Sardar Biglari upped the value focus at the brand, aggressively marketing 4 Meals Under $4, 1/2 Price Happy Hour, Kids Eat Free and $3.99 All You Can Eat Pancakes. That brought people back. Similarly, Domino's swung for the fences with its "new, inspired pizza" after it loaded the bases with popular new product introductions like Oven Baked Subs, Pasta Bread Bowls and Lava Cakes.

It's kicking off a new year. I can't quantify it, but I think Domino's benefitted greatly from rolling out its campaign at the very end of 2009 and going with heavy advertising once the new year came. Getting credit as the first mover on something makes a difference. Later, when dozens of other chains pivoted from their ubiquitous value messaging to commercials about product quality, Domino's already had a strong claim on those perceptions. Would any other chains copy Steak 'n Shake this year after it laid down its marker as the brand that wants to "protect its customers from inflation?" Perhaps, but they probably couldn't announce it, lest they appear like copycats.

It's paired with an attractive offer. The free Orange Freeze beverage offered for three days with purchase of a steakburger and fries at Steak 'n Shake isn't exactly a barn-burner, but it should reinforce the price freeze for a little bit. Domino's was more aggressive with its offer: a two medium, two-topping pizza deal for $5.99 each. I haven't seen any commercials or print ads for Steak 'n Shake's offer yet, just a press release, so maybe the brand has other offers planned throughout the year to keep the news of this going.

And that's the real question with this offer: Does Steak 'n Shake's price freeze have the legs that Domino's "new, inspired pizza" had? It's a radical move, because Steak 'n Shake is the first chain to say it won't take pricing in a year where commodities are going to be up at least 5 percent. It may be the only chain to do so, and very likely the only one to say so.

But "no price increases" is something consumers love hearing, so Steak 'n Shake now has a marketing tool at its disposal that it can use repeatedly this year. It can only help the brand get people to think about Steak 'n Shake differently, which is good news for a chain ready to unveil its new "Signature" prototype, also debuting in January.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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