How Outback Dealt With Irrelevance, Killed Its Cheesy Image
The recession wasn't a tough time for Outback Steakhouse just because consumers cut back on spending -- the chain was struggling to find its voice after ditching its original tagline, "No rules, just right," in 2007.
What followed was years of trial and error with taglines. The chain launched "Go Outback," in 2007, which lasted less than a year. In 2008 came "Crave on," which lasted for four or five months. "Live adventurous," which was the first tagline by then-new and current agency Deutsch, followed in early 2009. Later that same year it settled on "Always fresh in the Outback."
But what the company was ultimately facing in 2007 was irrelevance, said Chief Marketing Officer Mike Kappitt, who joined the company in 2011. "What was "cool Australia' in 1988 became cheesy," he said, adding that not only did marketing and the stores -- nearly 20 years old at that point -- need a refresh, so did the menu, which the chain overhauled in 2010 to include lighter options.
And though he said "Always fresh in the Outback" worked for the company, it switched back to "No rules, just right" earlier this month because he knew the chain needed yet another marketing revamp. "It's an interesting place to be -- to think about changing a campaign that's working for you," he said. Cycling through multiple taglines was a time when "we were bouncing around and nothing was working. "Always fresh in the Outback' ... allowed us to leverage the differentiation of Australia."
So why go back to a tagline that the company eschewed when it needed an overhaul? "No rules, just right," which was the first tagline the chain used when it started airing TV spots in 1990, was fundamental to the company -- an operations mantra, said Mr. Kappitt. In other words, even when it ditched the line in 2007, everyone still used it internally -- as did many consumers. "It represents the things that are at the top of our commitment hierarchy. Those words never left the culture, and so as we looked at new campaigns, there was a pull toward this," he said, adding that the line is also about "challenging convention."
For Outback that meant offering something in 1988, when the chain was founded, that most chains didn't. "No one had ever served a great quality steak for $10," said Mr. Kappitt, of the chain's philosophy in its early days.
It turns out that its practice of marketing meals with a price tag was prescient. Competitors like Chili's, Applebee's and Olive Garden have been heavily marketing price points and dinner-for-two promotions in recent years. Part of the movement toward aggressive price promotion is thanks to the recession, but it's also because consumers began flocking to fast-casual restaurants such as Panera and Chipotle.
According to a Euromonitor report released this month on the casual-dining category: "The rise of fast-casual dining took a bite out of the more traditional casual dining full-service restaurants, as the former was nimble and in-touch with modern consumers, while the latter ran the risk of becoming irrelevant in today's consumer-foodservice environment. ... The category as a whole faced the threat of losing out on foot traffic to the cheaper and often quality options that fast-casual dining brings to the table."
But Mr. Kappitt knows price promotion well, thanks to his eight years at Burger King, where he eventually became North American CMO. "The challenges at Outback were kind of similar," he said. "They're both great brands that had become irrelevant, and trying to reinvigorate a brand was something I got the great opportunity to do at Burger King, and I brought some of those [insights] to Outback."
Outback, owned by Bloomin' Brands, which also owns Bonefish Grill and Carrabba's, had a 3% systemwide sales increase in 2012, up to $2.39 billion, according to Technomic. Although its sales are up from $2.25 billion in 2010, its 2012 sales still weren't back to 2008's figures of $2.47 billion. Outback spent about $92 million on U.S. measured media last year, according to Kantar Media. It's the sixth-largest full-service casual-dining restaurant in the U.S., according to Euromonitor, behind Applebee's, Chili's, Olive Garden, Pizza Hut and IHOP.
To increase its market share, Mr. Kappitt said Outback has focused on price promotion, but in the last five years it has made a commitment to limited-time offers -- a tactic that has long brought traffic to fast-food chains. "Maybe six or seven years ago you had the luxury of doing more brand advertising, but we don't have that luxury anymore. If we're going to spend money [on advertising], we have to drive traffic. We're very retail-oriented. We think like a brand but we act like a retailer."
Outback almost exclusively advertises limited-time promotions now, with the exception of the occasional spot about the chain's lunch menu. The reintroduction of the "No rules, just right" tagline is accompanied by a steak and unlimited shrimp for $14.99 limited-time offer.