As a proud alumnus of the University of Connecticut, “March Madness” is one of my favorite times of the year (probably thanks to UConn’s 14 combined men’s and women’s National Championships…but who’s counting?). The excitement and unpredictability of the NCAA basketball tournament makes it one of the most enjoyable times of the year for sports fans across the country. As a result, it is also one of the best months of the year for many businesses that successfully associate themselves with the sport, including TV networks like TBS and TNT, and sports bars like Buffalo Wild Wings. It is easy to see how a TV network can use their exclusive broadcast rights to increase viewership; being the only channel that carries the games will do that for any event.
Buffalo Wild Wings’ growth story is much more impressive to me. After all, it’s not like they are the only restaurant in most towns with TVs, or the only one showing the games. Instead, their growth is due to the incredible power of brand differentiation.
Buffalo Wild Wings’ Brand Differentiation
BWW’s numbers and growth are incredibly impressive no matter how you slice it: restaurant sales have increased at a 65% CAGR for the last nine years; over the past three years, the stock has doubled while competitors like Bloomin’ Brands, Darden Group and
Yum! Brands have increased 4%, 20% and 46% respectively; the company has grown to over 1,000 locations and plans to open another 1,000 over the next several years. Overall, it is a growth story that any investor would love to be a part of – and in fact, an investor who invested $1,000 in the company’s 2003 IPO would have nearly $19,000 today (vs $2,350 invested in the S&P index).
Chain restaurants have been a part of American culture for generations, and have been a major economic force ever since Ray Kroc started expanding McDonald’s in 1954. For most, the key to success has been to create a unique brand, as Kroc did with McDonald’s famous golden arches and Big Macs. As I think about all the chains that have seen success over the years, the ones that come to mind are the ones that, like McDonald’s, have been able to stand out from the crowd.
In the Casual Dining segment, where Buffalo Wild Wings operates, this is very much the case. One “thought experiment” that I like to do is especially relevant for this segment. Picture yourself in a Ruby Tuesday. What is on the walls? How is the wait staff dressed? What is on the menu? Now do the same thing for TGI Friday’s. Then for Applebees, and so on for a few of the other chains that have the biggest presence near you. Can you tell much of a difference? I know I can’t. Now, picture yourself in a Buffalo Wild Wings and think about the same things. This time the differences are overwhelming. Comparing BWW’s differentiation to that of other chains is like watching a game between a #1 seed and a #16 seed.
BWW differentiates itself significantly thanks to its singular focus on sports. Everything in the restaurant is designed to optimize this experience, from the menu (focused on wings and other finger food that is convenient to eat while watching sports), to the wait staff (dressed in referee outfits), to the setup of the restaurant itself (with multiple TVs visible from every seat). Like the follow-through of a great free throw shooter, the consistency is remarkable. As a result, if you asked customers what makes BWW special, “sports” would be one of the first words out of their mouths nine out of ten times. This ensures that when March Madness comes around (or the World Cup or major sports’ playoffs, etc.), everyone knows that BWW is going to provide a great place to watch the games.
At the same time, BWW knows that this differentiation might make it a less desirable place for other customers. For instance, it may not be great for a family that wants a quiet Saturday night dinner – and BWW is okay with that. While some restaurant chains try to be everything to everyone (for example, Ruby Tuesday’s dinner menu includes entire sections for Salads, Seafood, Chicken, Steak, Pasta, Ribs, Burgers, Sandwiches, and more), BWW’s menu has wings, burgers and shareable appetizers. Again, it may not be the right place for every dinner out, but for those times when it is right, it is very right.
So what does all this mean for your business?
While not all businesses will be able to capitalize on consumers’ love of sports, organizations of all types can learn from BWW’s differentiation and focus. First, think about your customers. What can you do to stand out in their mind? Think back to our thought experiment on the different restaurants – in your industry, could your customers immediately recognize your product or your store? If not, what can you do better to make your company stand out from the crowd? Even if customers can identify your business, there is almost always room for improvement. For BWW, the store’s appearance has always been focused around sports, but perhaps the menu could use improvements to become more viewer-friendly (in fact, the chain has gone through several menu updates to perfect the experience). For your company, make sure that every component of the customer experience is singularly focused on that point of differentiation. At strong, lasting companies like BWW, customers almost always use the same words to describe what makes them great. If all of your customers are pointing to different attributes, you might need to narrow your focus and aim to do just one thing really, really well.
In the end, the product or service that customers choose usually comes down to which ones they remember best and most positively. Buffalo Wild Wings has used sports to make sure that all customers know what the company is all about, and it has worked incredibly well for them. While other chains continue to build shallow and easily replaceable relationships with a wide variety of customers, BWW is building deep relationships with customers who know exactly what makes the restaurant special. For your company to succeed, aim to please those loyal customers by making sure they know exactly what makes your company great. You may not be able to match the enthusiasm of a crowd at the Final Four, but you can generate excitement of your own.
The post March Madness: How Brand Differentiation Drives Buffalo Wild Wings’ Success appeared first on HourlyNerd.