El Pollo Loco has a 45-year legacy of serving authentic Mexican fare principally to a Southwest clientele who know the difference. So as the company looks to expand beyond not only core Hispanic loyalists but into younger demos, it finds itself balancing familiarity with novelty.
At last month’s MediaPost QSR Brand Insider Summit, CEO Bernard Acoca outlined the ways in which the company digitized quickly during this past pandemic year. In the process, this legacy brand found some unlikely digital paths to new customers – like a fast following on TikTok. Acoca was interviewed at the Summit by MediaPost’s own Lisa Singer.
MediaPost: So let's first talk about technology. Where has El Pollo Loco been most innovative?
Bernard Acoca: For context, three years ago we were deriving less than 2% of our business from digital ecommerce. Fast-forward to today, that number is closer to 12%, and we believe we can get close to 15% by the end of this year. Similarly, not surprisingly, we were spending less than 3% of our media budget towards digital. Today we're spending 50% of our media budget towards digital.
If I look at just delivery and drive-through alone, since 2019 our delivery business has grown 250% and our drive-through business has grown 43%. But I think the thing that really made a difference for us with delivery was, we asked ourselves a fundamental question: How can we be super-relevant with delivery, given how much the world has changed?
We made a conscious decision in our partnership with Postmates to say we're not going to offer free delivery for a week or two weeks or three weeks. Because people are sequestered at home, because the services become even more valuable to them at this moment in time, we’re going to offer free delivery for however long is necessary. So we ultimately wound up offering it throughout the balance of 2020 in an uninterrupted fashion. That gives you a sense of how we try to get very relevant with delivery during a critical year.
In regards to the drive-through, we think actually 2021 is going to be a real game-changer for us because we're leveraging technology there in a slightly different way than we've done it before. We are testing order-taking tablets, where we will be stationing people out in the drive-through queue, and they can take customers’ orders out there much earlier. Before, customers would drive up to a traditional menu board. And we're also able to take payments using these tablets in the drive-through queue, with our stated goal of trying to cut our drive-through times in half.
We not only did curbside pickup, which sounds pretty mundane, but, in our case, we did GPS-enabled curbside pickup, which was only possible through the robust mobile app that we already had in place. If the customer opts into that functionality, they never have to call the restaurant once they pull into a dedicated parking spot, or text the restaurant to let them know they've arrived. The GPS functionality alerts the restaurant that the customer has arrived, and we also have a stated goal of getting that order to the customer’s car side window in 90 seconds or less.
MP: Your digital sales tripled. Obviously, it’s hard to keep up with that kind of success. How are you going to continue doing that?
Acoca: Well yeah, our digital sales tripled in 2020. If there was a silver lining, it's simply [that it] accelerated the strategies that we already had in place before this ever started. We're going to go back to offering free delivery in a very dynamic way in a few weeks, [but] I can't talk too much about it at this point.
And we're exploring things like drone technology, believe it or not. We just had our VP of digital out there doing a field test with a supplier not too long ago. So we're just trying to stay on the bleeding edge of where the next innovation will take place.
MP: How has your media mix changed along with these shifts in service technology?
Acoca: Well, I think the big game-changer for us is how we go to market. As I said before, 50% of our media dollars are now allocated toward digital, and a disproportionate amount is going to social media. Social has really just enabled us to become great listeners in terms of what our customers are telling us. And we were always doing that, but the power of social is that you're able to do it in real time.
So in 2020 we launched a product called our chicken-less product. We were the first brand to launch systemwide an alternative chicken protein. And when we launched that in February of 2020, it was received very, very favorably. We heard from customers on social media, and we're on all the major platforms: Facebook, YouTube TikTok, Instagram, etc.
But what started to bubble up via social media was, hey, we're really excited that you launched a vegetarian product. But this is how astute our customers are: They told us the sauce that we cook it in actually contains an egg enzyme in it, and therefore, it's not truly vegan. And had we not had our ears attuned to what they were saying, and really kind of enhanced our social media listening capabilities, we wouldn't have caught on to that.
So we said, that can't stand. They're telling us something; we've got to respond. In a matter of three months, we took the egg enzyme out of the sauce, got the product certified as vegan with the American Vegetarian Association, and re-rolled it out.
The power of digital is just these real-time interactions, these two-way bilateral conversations you have with your customers. You can go to market with alacrity and speed in a way that you just simply couldn't go to market before.
MP: And you talked about how you're on all of the channels, I think TikTok, though, is one of your more recent ones that you sort of discovered and are really excited about. Talk about your experience there.
Acoca: I'm super-excited about TikTok. Just recently we celebrated a milestone. It was just this week when we managed to acquire on TikTok the same number of followers we have on Instagram, and it took us at least five years to get those number of followers on Instagram.
So TikTok is proving to be this really dynamic game-changer for us. We've been able to do some interesting things working with influencers and developing content that's really relevant for that platform.
I mean, right now we are promoting our tostada product. And we've partnered with Hispanic influencers that really have deep ties to that community, as well as just more general market influencers, that have really enabled us to showcase this dynamic tostada product [by] capitalizing on an insight around personalization and how everyone loves to eat that product differently.
We've encapsulated the tagline, “How do you tostada?” But the novel way that we were able to make that come alive through TikTok got millions of impressions overnight. And it's just been really, really encouraging to see. And we've only been on that platform for six months, so we're just really excited about what lies ahead there.
MP: What are your key takeaways from this last year?Acoca: I think for all brands to grow in this day and age, they have to have one foot firmly planted in their past, in their history, and they need to celebrate and elevate what got them to this point, while simultaneously also reinventing themselves for the future, and figuring out ways to make the brand relevant to new audiences that have yet even to experience the brand.
That's the thing we've been trying to do at El Pollo Loco. It's always this precarious balancing act of honoring our past, honoring our ties to the Latin community, because they've gotten us here, right. I mean, whatever success we've had it's because they've entrusted us with it, with their love.
But at the same time, we have a compelling business need to grow the franchise, to invite new customers into the brand. And what we have found to be the best way to do that is what I just described. Do it through the digitization of your business, through really leveraging social media, which tends to skew younger. This is a mandate within the company that we want to grow with younger customers.
[Also,] product innovation. I talked to you about Chicken-Less Pollo. And then, I also think, by really figuring out novel ways to serve the communities in which you do business. So it's really having a foot in both camps at all times, which is not always an easy thing, but which I believe is essential if you're going to successfully grow your brand.