Value is a tricky thing to measure because it’s changing for everyone. But during the 2019 Restaurant Finance and Development Conference, Growth Partners Retail President Neil Culbertson laid out attributes that go into the value equation for consumers that goes well beyond price.
“Seth Godin, who has written many marketing books said, ‘The price is the same for every person, but value is different for everyone,” said Culbertson. “Value is a lot more than price.”
And as aging Boomers and Gen Z becoming key consumers, the U.S. consumers continue to re-calculate what value means at their life cycle and their income. That means the idea of value is further bifurcated across the consumer landscape. So every concept has to work through what Culbertson has identified as eight key metrics that go into a value equation and how they match up with their ideal customer.
While price isn’t everything, Culbertson said it’s still “the most direct line” to a consumer’s idea of value. Every concept is conscious about pricing, but the balance costs and pricing is changing dramatically, and it means concepts need to be very wary about raising price to the point it erodes value.
“Taste is a given,” said Culbertson. “But people want to know a lot more about the quality of your food today.”
Look to hip growth brands for some evidence, but telling the story of the food has become very important to both younger generations who don’t just Google locations, but pay close attention to everything from the farm to the table. But aging generations are looking to eat healthier too, so any concept with a good story to tell needs to put in the time to engrain that into the brand.
“I think customization has become table stakes,” said Culbertson. “It used to be if you had a food allergy they couldn’t accommodate you, now you go into almost any restaurant and they can adjust your food.”
And beyond food allergies, intolerances, new diets and consumer whims mean today’s menu has to flex to the concept’s core consumer.
“How easy is it for me to order and get your food via digital ordering or delivery,” said Culbertson.
As might be clear from the growth of delivery and continued growth of drive-thru sales, easy access is a major value attribute for busy consumer sets.
5. Speed of Service
Right along with accessibility, speed of service gets consumers what they want the tiny window in their busy lives. That means a continual balance of complexity and efficient execution. Scratch made high-quality and customizable concepts can keep consumers waiting to a point, but if they want a breakfast sandwich and a coffee out of a drive-thru window, they’re not going to wait long.
“People want to know why,” said Culbertson.
It’s easy to say, but hard to do. For companies who do have a cultural or operational North Star can make themselves more valuable by sharing their reason for being and connecting with consumers who align with those values.
“Do you have a cool story to tell?” asked Culbertson.
Right alongside the purpose is the brand story and for the same reason. Consumers want to give their money to brands that have an enticing story.
8. Ex Factor (Experience and excitement)
“Today, you need a little bit of that surprise factor in your brand,” said Culbertson.
He pointed to brands like the non-franchised Punch Bowl Social and Pinstripes as experiential leaders, but excitement can come anywhere from places like Paciugo wit it’s Instagrammable unicorn sundae or Chipotle’s recent free guacamole promotion.
So who does it well? Culbertson said a late entrant to the sub category ticks a lot of those value boxes.
“Jersey Mike’s is a brand I really like,” said Culbertson. “Late to the category, Subway probably had 14,000 locations by the time they came.”
Everything from the customization to community connection and the deli slicer in the middle of the experience all build value—not to mention the story of a Jersey boy bringing his love of sandwiches out to the masses. He said leading brands like Jersey Mike’s have a lot of options these days to create value well beyond price.
“Category leaders are defined by price, but there are a lot more ways to find value. This is positive for brands, there are a more levers to pull, but it requires more work, you have to think about how you deliver value today and tomorrow,” said Culbertson.