Buzz is Better than Ads

Submitted by Dave Free on Mon, 03/05/2007 - 3:35pm.

Great article in BusinessWeek about Chipotle's success without traditional advertising. If you've never been to one, Chipotle's is a burrito place. They used to be owned by McDonald's but got spun out and went public in 2006. Since then their share price has tripled. They've experienced double-digit growth for nine straight years! Here is the kicker: they don't do traditional advertising.

Actually, they do a little traditional advertising. Some billboards (see image with this post) and radio, but they spend less than 1% of their revenue on advertising compared with 4% or more for McDonald's and Taco Bell.

According to Steven Ellis, the Chipotle founder and CEO, "Advertising is not believable." When he opened his first store in Denver he had no money for advertising so he decided to let his burritos do the talking and started giving them away free. They recently opened a location in midtown Manhattan and gave away 6,000 burritos. People stood in line for two hours. It cost $35,000 (about the cost of an ad in The New York Times) and they got 6,000 promoters plus a mention in BusinessWeek out of it. Not bad.

What are you doing to get your customers talking?

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I agree with Steven Ellis

Submitted by Steve Coleman/Business Management Basics (not verified) on Tue, 06/10/2008 - 11:42am.

I agree with Steven Ellis and his statement "advertising is not believable" but only to the extent that too much advertising is false. Giving away burritos, his product, is fine in his context but not practical for most businesses.

Traditional advertising still, works if it is ethical, attractive or lets people know whats in it for them.

Gift giving has always been part of advertising and it works however one has to be realistic and not give away the store!

Steve Coleman

www.businessmanagementbasics.com

If only there was good to spread by word of mouth

Submitted by bummerburrito (not verified) on Fri, 04/04/2008 - 8:07am.

It's too bad, then, that I only have negative buzz about the chain -- i.e., taking the ubercheap, defining San Francisco burrito and packaging it as a well-we're-better-than-Taco-Bell corporate commodity.

I agree! Buzz is

Submitted by Ulla (not verified) on Wed, 03/07/2007 - 5:56pm.

I agree! Buzz is wonderful!
I just need to get some buzz going!

Buzz can be what you want it to be if you know what you want

Submitted by Drrogera (not verified) on Thu, 05/17/2007 - 4:53pm.

Too often companies hope their customers will figure out what is special about them. The company either does not know what they want to be, they want to be everything to everyone, or they know what they want but are afraid that if they tell people they'll be wrong. Patton I think, paraphrasing Robert E. Lee, said something like "Courageous execution of a weak plan beats weak execution of a courageous plan." I think we have all seen companies with week products and strong promotion or buzz best better products with weak buzz or promotion.

I am new to your blog but I really appreciate all the work you have put into it.
Thanks for sharing your expertise.

Amen. When you get down to

Submitted by Harry (not verified) on Tue, 05/08/2007 - 7:38am.

Amen. When you get down to it, Buzz is tantamount to credibility, which is the best currency there is.

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