Schwan: On millennials, marketing and Mexican food

There’s much to be learned from selling Mexican food to millennials.

It seems like most every business is trying to reach this generation, born between 1980 and 2000, largely because millennials are positioned to overtake baby boomers in terms of spending.

It will require innovative marketing, for which I often look to the retail industry as a leader. And for whatever reason, Mexican restaurant chains have emerged as some of the most cutting-edge.

There’s Chipotle Mexican Grill, which drew in young customers with its fast-casual, customizable format, engaged them on YouTube and other social media platforms, and won approval through approaches such as eliminating GMOs.

And yes, I do think we will have one in Sioux Falls — probably in the next couple of years.

Then there’s Taco Bell, which was using Snapchat to reach young consumers before I suspect marketing executives at some businesses even knew the app existed.

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The company even features a “millennial word of the week” at its headquarters, according to an Associated Press report. It said the words are curated by a group of employees in their 20s and emailed weekly.

An example earlier this year — “lit” — was defined in the company email as an adjective “used to describe a certain situation, person, place or thing as awesome/crazy or just ‘happening’ in general.”

So, basically, most businesses want to be “lit” in the eyes of millennials.

That includes Taco John’s, which works with Sioux Falls-based Lawrence & Schiller on its marketing campaigns and recently rebranded to be more appealing to a younger customer base.

I learned about the effort while reporting on last week’s Sioux Falls Business Journal cover story on businesses rebranding.

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“We wanted to make sure Taco John’s was adjusting with the times and ready for the time when millennials are in charge of the nation’s pocketbook,” said John Pohlman, a Lawrence & Schiller executive vice president.

I figured many businesses could say the same.

But understanding the need to reach a new audience and actually accomplishing it are two different things.

So I thought looking at the approach this one business is taking could provide insight for others.

Taco John’s is a 40-year-old brand with about 400 locations, but it’s looking to grow in new and current markets.

Along with the expansion, however, came a need to understand how the company “can stay relevant with today’s guest,” said Billie Jo Waara, chief marketing officer at Taco John’s.

“There’s been a lot of growth and transition in the industry as millennials have shaped what they’re looking for in terms of high-quality items, affordable convenience, unique flavors,” she said. “Their tastes are more exotic, and those things are focusing the entire restaurant industry to take a closer look at how we remain relevant.”

The key from the start was “not just in making assumptions about what we know to be true,” she said.

That meant significant research to get a feel for everything from how younger customers perceive Taco John’s to how they responded to different menu options and restaurant layouts.

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“Taco John’s was willing to really rethink and commit to redoing the way they do business in a top-to-bottom way, involving marketing, menu and operations,” Pohlman said. “The research gave us ammunition to work down all three of those areas.”

On the menu, Taco John’s decided to introduce a walking taco and a street taco.

“We can’t walk away from our roots,” Waara said. “We aren’t completely reinventing ourselves. We need to go through an evolution instead of a revolution, and in a way that’s relevant. I don’t know the taco we served 40 years ago is the same taco we’ll serve tomorrow.”

Take the word “taco” and think about how it might apply to your business. Then consider what Taco John’s leaders asked themselves next.

“What are we unapologetic about?” Waara said. “What are we going to put a stake in the ground on, and what are opportunities to evolve the menu?”

Tacos, they determined, are still relevant to today’s diner. Their portion size and pricing support that.

“But at the same time, we wanted to do it in a way that’s innovative and relevant to how people eat today, which is new and interesting flavors,” Waara said. “It’s a twist on the original.”

Operationally, that led to new interior designs and new uniforms.

“We went from the standard uniforms to T-shirts that have sayings on them that had a little more attitude,” Pohlman said. “It gives the brand a little more swagger, and people like working for companies with swagger.”

Waara agreed the uniforms “absolutely had to change.”

“Millennials for us are not just customers, they’re also part of our workforce and how we’re viewed in the marketplace as an employer of choice,” she said. “It’s forced us to take a look at how we hire and train. All those things were part of the overall rebranding. It wasn’t just new advertising.”

That hits on a critical point for any business trying to refresh its product, image or operation. It takes commitment at every level of the organization to ensure the new brand reflects a real improvement.

“We can say we’re something different, but ... actions speak louder than words,” Waara said. “And that’s been a big part of our success.”