Chipotle did not weather the e.Coli problem well. Since news about tainted food hit the news, people have been flocking pretty much anywhere else to get their “healthy fast” fix. Now the company is resorting to outright paying people to get fans to come back, literally giving food away.
The current offers include a free Izze drink or a free entree if you buy one of equal value. This offer is the latest in a line that stretches back at least to the Super Bowl. Back then the company offered $50 off catering, gave away free chips and guac and offered BOGO meals. All these freebies are starting to bring customers back, but not quickly, and it’s costing the company huge – $30 million in losses in this quarter alone.
Analysts expect Chipotle to rebound, but it will take time as well as a strong and successful public relations effort. While not the first company to face a food-borne illness scare, it is one of the first to face it in the social media era, especially tough considering their target market is extremely web savvy and active on social media. It will take more than free food to make people forget what happened not that long ago to several diners across multiple states.
For example, CNN is reporting a couple for BOGO entrees was claimed 5.3 million times, but only 67% of the coupons were redeemed. That’s only 4 percent of all transactions. The company will need a lot more than 4 percent win back if they want to pull out of this dive.
To get there, they will need to regain control of their message and narrative in the market segment. For too long now the company name has been linked directly to e.Coli in headlines and social media memes. They need to get people thinking about who they used to be – the go-to spot for fast casual and (relatively) healthy dining.
The offers aren’t bad, necessarily, but they can’t be the only method the company tries. So far, they’ve announced plans to run the freebies through the summer and, if they are not successful, increase offers. If this doesn’t work, is more of the same really the answer?