Hog's stays away from “discount noise”, focuses on growing loyal customer base as part of three-year strategy
In his first interview with QSR Media, CEO Steven Spurgin explained plans to refine their loyalty programme and why flexibility remains key in supporting franchisees.
Arriving at Hog’s a month before the first lockdowns started, Steven Spurgin finds himself very empathetic to business owners suffering under current trading conditions.
“Fortunately, my personal wellbeing has been excellent. My life in Africa, and all the challenges it throws at you daily, certainly gave me a good grounding in dealing with a government-driven and assisted chaotic environment,” the chief executive revealed in his first interview with QSR Media.
This, along with his background in hospitality, gave him the mindset to ensure the company quickly pivoted to changes, splitting the team into two parts to deal with the two main facets of the business.
“Back of house was charged with managing changes from authorities and standards of operations, to suppliers and aggregator management. This team also focused on franchisee support, by keeping everyone abreast of changes state-by-state, and nationally, in operating standards, the OHS (occupational safety and health) of guests and staff, as well as landlord negotiations,” he explained. “Our front of house team focused on our marketing messaging, our product and pricing, and the implementation of operational standards.”
Understanding the nuances of local markets
Franchisees, Spurgin said, were “incredibly positive” when in-dining restrictions were first implemented.
“Once closure was mandated, each restaurant decided to follow the course they felt best for their survival. We allowed full flexibility and spoke with each franchisee to ensure we understood their wishes and were able to support each individual restaurant,” he said.
Hog’s also supported franchisees with negotiating extended payment plans for restaurants individually and with major suppliers, as well as discounts, suspension of services at no cost for services not used in the in-dining experience. Franchisee fee relief was also given by dropping them by 66% initially.
To assist in lessening the impact on the bottom line for their operators, the company also suspended birthday vouchers and the 25% discount for our Hog Squad membership programme, which they plan to relaunch once they have “some certainty about the operational environment.”
“We see this period as an opportunity to understand and engage with our loyal market, in each individual location, without the “discount noise” of the Australian retail market,” Spurgin explained. “We want to better understand the nuances of the local market that each restaurant is in, and the place that each family-owned business occupies in that market.”
Efforts to work to grow one’s customer base and customer loyalty aside, Spurgin also believes the industry has come to notice that the ability to compete on price alone is “unsustainable” and that third-party delivery is unprofitable if in-room dining is not available to sustain it.
“It becomes an overhead rather than a contribution to the business,” he said.
Over the next months, Hog’s said it remains firm in ensuring outlets remain open.
“We have a three-year strategy out of this pandemic that we are seeking to implement with contingencies to accommodate changes such as what we’ve seen in Victoria. Our focus is to keep our family-owned outlets open during these trying times and drive business to our restaurants while we’re able,” he said.
Spurgin also predicts a smaller industry, with players needing to look at service and perceived value versus gaining market share just on price.
“The customer is discerning and understands the value of their income better than ever so they will spend it where they get the best experience and memory, not just the best price,” he said. “The challenge will be to create great memories to ensure your customers return again and again.”
