Chipotle – a brand we have long admired at Stealing Share as we watched it steadily increase its market share – has recently made headlines.

New Jersey’s Star-Ledger reported last week that Chipotle has quietly incorporated a curious practice to its pricing process: It now rounds customer checks up or down to the nearest nickel.

This is great for those customers who luck out and pay less. But what about those who pay more?

It isn’t fair.

Chipotle shared its reasoning for bill rounding:

“It’s something we do in some high-volume markets. The way it works is that prices auto-round to the nearest quarter and that’s indicated on the receipt. The idea is simply to limit the possible combinations of change on cash transactions to keep the lines moving quickly in high volume areas.”

This makes sense, but is it a savvy move for Chipotle’s brand?

No.

Any time a company takes money from customers without their permission, it violates a trust. Eventually these customers realize they’ve been duped, which creates a negative image for Chipotle.

While such minor increases and decreases in price totals are practically benign, it’s a dash of chicanery that taints a trusted brand.

Until now, Chipotle’s success has been due largely to a brand that is consistent with purpose, products and its customer base.

When Chipotle stops pinching pennies, it will return to the sensible business model that built its prosperity but will find its brand has already been damaged.

With sales of $8.5 billion in 2011, Wendy’s just the claimed number 2 spot, moving ahead of Burger King but was well short of McDonald’s $34.2 billion. This second place battle of the pygmies needs to find greater meaning in the market if either ever wants a crack at McDonalds.

My worry for Wendy’s is that its rise will prompt it to confuse activity with accomplishment. Yes, from a marketing perspective, Wendy’s is doing things, but its rise has been relative to Burger King’s inconsistent execution of any strategy.

Most of our battles at Stealing Share when rebranding companies is changing the internal mindset of those companies. Positive news, like Wendy’s received, provides a false sense of security. Fortune favors the bold and, if my past experience has taught me anything, it is that a third place Wendy’s would be strategically more bold than a second place Wendy’s.

Strategically, Wendy’s should set its sights on the white whale: McDonald’s. At the moment, however, it seems to be doing the same as Burger King by marketing product instead of brand. Copy in a recent Wendy’s ads goes: “No matter who you are, Wendy’s will make a Dave’s Hot and Juicy Cheeseburger fresh just for you, so its special, just like you.” Give me a moment while I my eyes stop rolling. Beyond its campy verbiage, it provides no switching trigger for the customer. Does anyone believe they would be refused service when they go to a fast food restaurant? Or that a competitor will not make hamburgers?

McDonald’s has been successful due to its message clarity, consistency and firm brand meaning of “fun.” In fact, that brand promise is represented as an experience rather then product.

Wendy’s is certainly in a good position. Number two is nothing to scoff at. But it will take focus to clear the gap with McDonalds and being able to spot the pivotal brand difference between its brand  and the Mickey-Dee one.

One of the fallacies of mass media marketing has always been that, if the spot or tagline is recalled and even becomes famous, it creates preference. As if awareness was all it took to beat the competition.

However, many of the most recalled advertisements have stolen exactly zero market share.

The most significant example is Wendy’s “Where’s the Beef?” campaign from the 80s. The tagline, written by advertising legend Cliff Freeman, has entered the cultural vernacular as a stand-in for what is missing, whether it’s discussing a politician’s platform or what’s inside hamburgers.

What people forget is that the “Where’s the Beef?” campaign, while certainly famous, did not steal market share for Wendy’s. It just became an incredibly recalled skit that did very little to create preference. That’s the reason why it didn’t run all that long.

It’s for that reason why I find it peculiar that Wendy’s is going to back to it in a new campaign to unveil its new line of Dave’s Hot ‘N Juicy Cheeseburgers.

Wendy’s must really be getting desperate – as I’ve noted in earlier blogs, the fast food hamburger industry is struggling – because it’s going full-on nostalgia route by also airing TV spots featuring Wendy herself, the daughter of founder Dave Thomas and namesake of the hamburger chain.

I’m all for being aggressive – Wendy’s is promising to spend millions on this effort – and I often feel advertising “back in the day” was more effective than the entertainment-style approach of today’s marketing.

But there was a fundamental reason why “Where’s the Beef?” didn’t work: It said nothing about who customers are when they eat at Wendy’s. The phrase was about the hamburger, not the customer.

This “rebranding,” of sorts, will be money wasted, I promise you, because it’s a fancy, expensive and nostalgic-wrapped version of product advertising that says we have bigger widgets. Which, as smart marketers know, does nothing to create brand preference.

The only way it would work – and I do expect a short-term bump for Wendy’s based on the media buy itself – is if the highest emotional intensities in the market are bigger burgers (something Wendy’s already tried with the Baconater and chains like Hardee’s have also attempted) and nostalgia for wanting to be like Wendy. I’d like to see the market research on that.

The fast-food hamburger industry is in trouble because, in tough economic times, the only leverage you have with customers is brand. It’s the reason why McDonald’s continues to hold its No. 1 position. It is the only one in the market with a brand.

The rest, it seems, are still scrambling for new ideas – even digging one up from 27 years ago.

On a frequent basis, Stealing Share will take a look at various markets for companies who are in position to steal market share. We send information about our process and, as brand strategists, we try to get across in a small amount of information the absolutely imperative effect brand has on a company’s success.

These attempts do not always gain the traction we would hope as many companies keep their own rose colored glasses on because taking a critical and honest look at their brands is not often an easy or comfortable task.

However, we have never had this information returned to us by the company with our unopened envelope hidden inside a new hand-addressed envelope, noting our information as unsolicited. Wouldn’t it have been easier to just trash it?

That returned letter was from Burger King, a brand whose existence in the fast food hamburger chain market has been restricted to second place, and lower than that when looking at the totem pole of overall fast food chains.

We now know why.

Burger King is obviously a company that appears to be so process driven that it takes to the time to mail back an unopened envelope rather than evaluate its contents. It is essentially claiming that it wants it to be known that: “When pursuing the success of our company and the preference of our brand, Burger King will stop at nothing short of ignorance to remain status quo.”

Napoleon once said, “If the art of war were nothing but the art of avoiding risks, glory would become the providence of mediocre minds.” Stealing market share does not involve avoiding risk. It involves being bold, memorable and intensive to your market. One can only surmise from the directness at which Burger King avoided what was so very desperate to its brand’s success that it has found comfort in its stasis.

Perhaps in time, having McDonalds eat its lunch will prompt a departure from mediocrity. In the meantime, if this is the care by which they value its brand, my suggestion to the private equity firm that bought Burger King is to invest elsewhere. Get out when you can.

A pet peeve of mine and many other Web users is the difficulty in finding the contact information on that site, no matter what business they are in.

If you share that peeve, don’t go to a restaurant site. Slate.com is running an interesting story about why restaurant websites are so bad as most of them are Flash-heavy, splashy, overcomplicated sites that leave you frustrated trying to do what one of the purposes of the site is: Finding a menu and contact info.

The part that particularly caught my attention was when Tom Bohan, who heads up Menupages.com, said it was the fault of web designers because they try to impress the client, who is often an owner or chef instead of a marketer.

I agree, and it represents the failing of most agencies, who try to impress the client instead of figuring out how to fix the problem. It reminds me of logo presentations I’ve attended when the splashiest one gets the best feedback instead of the subtler one (Nike “swoosh,” anyone?) that is the most meaningful and will stay that way for generations.

We tell clients that it’s not always the loudest that gains preference, but the one that is most meaningful, strategic and even tactical. (Like, you know, having contact info on the front page.)

Sometimes a whisper is more effective than a shout.

This goes across the entire marketing landscape, not just with website development and design. It’s also important in the branding and marketing messages that should only be intended for one thing: To create preference.

Think of it this way. If the loudest always wins, why is GEICO trailing State Farm and Allstate in market share even though GEICO screams so loud it outspends the national debt in advertising? Because it only plays on price and has no meaningful brand message. Its advertising is just entertaining noise.

Lesson here: Don’t scream. Don’t just try to wow the client. Do the job.

At Stealing Share, we talk a lot about the importance of creating brand messaging that goes beyond the category tables stakes, or the bare minimum to compete in the category. In most markets, these table stakes are values like price, efficacy, proximity, etc., and they do little to build true brand preference.

I was browsing a few news sites today when I noticed something rather surprising. It was a new category table stake I had not yet considered within the fast-food industry… Size!

The article was for the new 1160-calorie “Meat Monster” burger from Burger King (currently only available in Japan). The burger consists of two hamburgers, a chicken breast fillet, bacon, two slices of cheese, and the standard trimmings nestled between two buns. It got me thinking how flawed a brand strategy is that’s based on sheer size.

Looking deeper into the category, there are competing sandwiches like KFC’s “Double Down” (a sandwich with impromptu buns made of fried chicken), Hardee’s “Monster Thickburger,” (a heart-stopping 1420-calorie burger) or Wendy’s “Baconator” (its name is self explanatory).

When we talk about table stakes, the point we always stress is that, while table stakes might provide some immediate benefits, their lasting effect on the target consumer is short-lived. At the end of the day, “more for less” is the reason why the meat Taco Bell uses is made using very little meat.

Back in 1993, the “Whopper” was all about size and how it was the biggest in the industry. By today’s standards, it is one of the more conservatively sized burgers. Just imagine. If the brand was for people who sacrificed “time” but not “taste”, the opportunity for preference grows substantially. Being a customer with “discerning taste” seems a much more appealing idea than simply being consumers who must consume as much as they possibly can.

Fast-food chains need to take a hard as their brands, understand who their consumer is and what dictates choice, and then take new brand positioning to reflect that. Otherwise, before long an episode of “Man vs. Food” will be any of us at Burger King – and that is without even upgrading to King size.

I heard a story today about how some of the new smart phone applications that allow you to broadcast your location to others using the app (like foursquare) makes users a little nervous and markers salivate.

“Imagine you near a coffee shop at 57th street in NY and having the ability to send you an ad with a special promotion on coffee”, said a marketer.

“I think it is a little creepy that everyone knows where you are,” intoned a shopper.

First of all, we need to all get used to the idea that more and more of personal information is public knowledge. I would be less concerned that Starbucks knows you are near by than a quarter of the drivel that is voluntarily posted on Facebook.

Secondly, the real impact of such marketing strategy will be short lived. Soon we will all ignore the intrusion in just the same way we have learned to ignore billboards and the rest of the advertising mediums.

If a marketer of coffee wants to sell you a cup, the preceptual fabric of the target market is a much better target then the customer’s location.  The problem with marketers is that they are bone lazy and confuse a category benefit (like good location and price) with why customer;s really choose and as the reason to get them to inconvenience themselves to buy.

When everyone’s location is public knowledge, marketers need to remember that what audiences really covet is much more important than where they are. That’s the only “technology” Stealing Share sells.

Despite bad press and the knowledge we all know that its food is extremely unhealthy for you, McDonald’s continues to thrive. Yes, Happy Meals last six months before it starts decomposing. Yes, the obesity problem in America, especially among our youth, can be partly attributed to McDonald’s.

Yet, its third-quarter profit increased by 10 percent (a whopping number considering its size in the Quick Service Restaurant market) and its stock have surged.

How do you account for that? It’s an easy answer: McDonald’s has a brand. And brand trumps everything. It trumps bad press, an unhealthy reputation and a field full of competitors.

And that’s because a meaningful brand is based on emotion, which drives human behavior, whether we care to admit it or not. You could, for example, explain all the ways the Droid is technically better than the iPhone (the rational reasons) and it won’t make a difference. The emotional drivers of the iPhone override all the rational reasons to buy.

I bring this up because, lately, the mainstream press has asked me to comment on a handful of struggling QSR brands, such as Bojangles, KFC and Papa John’s. And they aren’t alone. Burger King, Wendy’s and Arby’s are falling faster and faster behind McDonald’s as they continue failing to find that emotional brand that drives preference.

My advice is to stop battling on price, marketing new products that come and coming up with catchy and clever taglines that mean nothing to the market. Instead, they should uncover the emotional drivers in your target audience – and stick with it.

Uncovering those drivers is what we do at Stealing Share, and I have a feeling there are few industries that need our help more than those in the QSR category. That even includes the regional chains, like Burgerville, Dairy Queen and Church’s Chicken – and all the rest.

They are all seeing market share stolen by the market leader.

I guess when it rains, it pours with fast food chains.

It seems we are entering a business phase in which fast food chains think they should all reinvent themselves and spend some serious money in the process. The problem is, as it has always been, none of them have anything to say.

Arby’s is the latest victim of the “If you spend it, they will come” mentality that is rippling through the fast food segment at the moment. First, it was the “I’m thinking Arby’s” campaign that segued ungracefully into their “value menu” campaign. Now, with sales off, Arby’s is shifting their ad strategy to national buys and hiring new creative to execute.   Increased national buys and new creative are all fine and good but what exactly will Arby’s say?

This is a problem facing the entire industry. Bojangles recently shifted their position from the nonsensical but catchy “gotawannaneedagettahava” to the meaningless “It’s Bo time.” Domino’s decided it was actually going to try to make a product that tasted good and now Papa John’s is responding with a huge media spend during the Super Bowl to reinforce its “Better ingredients, Better pizza” message (and all along I wrongfully thought that pizza that tasted good was part of the definition of a pizza delivery).

When sales and revenue are off, many fast food executive now say, “Our advertising is not working for us” and, in typical knee jerk reactionary mode, the decision is made to increase reach and frequency and hire a new agency to give the brand a fresh creative execution.

However, the real issue is not the advertising. It’s the brand strategy. And it’s not the MBA-speak of “go-to-market strategies” or “brand impact.” It is more germinal than that. In fact, the brand strategy should answer a simple question: “What does Arby’s mean?”

Though the question is simple, the answer is not. What can Arby’s mean that is not already claimed by a competitor? Fast food? Value Prices? Good Selection?  No, because those are messages all of the market’s players are saying.

The agency that takes on the creative duties for  Arby’s will undoubtedly fall to the same fate that its current agency, Omnicom Group’s Merkley + Partners in New York (who is not even defending the account), is facing: Seeing flat or declining sales and so the account comes up for review. The truth is that  Arby’s is solving the wrong problem in the wrong order. Strategy must come before execution. If you think you have developed a strategy already, ask yourself if this strategy can be claimed by any competitor in the landscape and if it has emotional resonance with those who do not currently choose you.

Arby’s, at least give your new agency a fighting chance.

Domino’s new brand of “not as bad as it used to be” continues to flail. Take a look at this:

http://www.showusyourpizza.com/

Now, Domino’s creative agency has come up with the brilliant idea of having Domino’s customers send in pics of the actual “not as bad as they used to be” pizzas delivered by Domino’s for inclusion in ads and promotions.  The intent is to show Domino’s pizzas in their natural grease soaked box goodness, untouched by an art director’s airbrush.  As a reward for the picture, customers who enter could win $500.

Actual Domino's Pizza From Site

This is just a continuation of Domino’s trying to pull the wool over people’s eyes.

First, it was admission that their pizza was not very good so they were going to somehow wave their magic wand to make it better and now Domino’s thinks that showing pictures of their pizza (keep in mind showing only the best of the best of the pictures) will somehow entice people to choose them.  Tell me, Domino’s, what problem are you attempting to solve here?

Due diligence for such an ambitious undertaking as a reformulation of the product that has brought it to its current level of success would require extensive research. Did the research come back and say that more people would switch to Domino’s if they could actually see “for real” how good their pizza is?

This is an example of something we encounter everyday – an inside out view of the market. We hear banks tell us, “If we could only make customers see that we had the most friendly people…” And food and beverage companies say, “If we could only make people see that our product tasted the best…” And service companies say, “If people only saw that we provided the best service…” All the while, they are missing out on what really drives people to make their purchasing decisions – the outside-in view.

What this latest “show us your pizza” campaign tells me is that the reformulation and $10 pizza offers are not having the effect that Domino’s hoped for. Marketing is telling their agencies that “if we could only show people that we really do have the best pizza…” and the agencies are doing their best to make its client happy. The only problem is its agency is solving the wrong problem. The pizza delivery business is not about taste. It is about a reflection of the customer and, until Domino’s can move past what it believes to be true and concentrate on what the prospect believes to be true, it will continue to flail.