Seth Larsen is the Chief Relationship Officer at Cheba Hut, the first marijuana-themed sandwich “joint” in the United States. Originally from Chicago, Larsen became familiar with the Colorado-based Cheba Hut brand while studying business marketing at Colorado State University. Larsen has been a franchise owner with Cheba Hut for 12-plus years and has seen year-over-year double digit same store sales growth at the modern-day fast casual restaurant. During the pandemic, Cheba Hut, with more than 35 locations in Arizona, Colorado, California, Oregon, New Mexico and Wisconsin, introduced a state-of-the-art loyalty program to keep customers engaged with the brand. We asked Seth to share his perspective on how the brand’s technology capabilities, including its updated app, has benefitted both franchisees and customers during this challenging time.
How has Cheba Hut used technology to help keep your customers engaged with the brand during the pandemic?
The restaurant industry was more or less forced to enter the digital age once the coronavirus pandemic took hold of the world. Like Cheba Hut, many brands that had relied on repeat customers and traditional forms of marketing instead sought out improved ways of reaching consumers using digital technology. For Cheba Hut, it meant we had to best understand what our customers needed from us in order to remain loyal in spite of the current economic uncertainty, and that meant a redesigned online-ordering app with added benefits in the form of a loyalty program.
Prior to the pandemic, the Cheba Hut native app and website orders accounted for only two percent of our revenue. With more time to reflect on and establish what our brand needed to accelerate its online presence and consumer accessibility we needed to make a change. The addition of the loyalty program and an in-app video game, called Cheba Hut’s Flippy Bird, integrated our brand into a space where it finally had the ability to compete with other fast-casual concepts. Consequently, with an updated, brand-aligned app that two percent of online revenue has increased to 20 percent since its launch.
What does the loyalty program look like? How has its launch, in addition to the updated app, benefited the customer experience?
The fact of the matter is that real estate on any consumer’s phone needs to be justified — in order for that to happen the return to the consumer has to be worthwhile. As a brand that, historically, has never couponed, giving 10 cents back to our customers for every dollar that they spend in the app has increased the value of our already-affordable menu. As an additional part of the loyalty program, playing Cheba Hut’s Flippy Bird rewards consumers with points they can use toward future purchases. Keeping our customers incentivized and in our app has been our most effective marketing strategy while navigating the pandemic.
What has the customer response been to the loyalty program and the updated app?
The success of the app has outpaced the prediction of Olo, the app’s developer, by 300 percent, and we’re averaging about 3,000 new downloads weekly. Since launching only three and a half months ago, the loyalty program has grown to 35,000 members — and this is only phase one. Once we’re ready to launch phase two of the loyalty program customers will be able to purchase digital gift cards within the app.
The pandemic reassured us that our food is good, but it also encouraged us to better reach our customer base and establish a stronger digital presence. Half the fun of dining in our restaurants is the atmosphere, and the best way for the brand to remain as that fun destination that consumers are familiar with was to bring the experience directly to them. At the end of the day it comes down to the ability to give back to our customers.
How has the loyalty program benefited Cheba Hut’s franchisees?
It’s exponentially more expensive to reach a new customer than it is to retain a customer. Now, with the addition of the loyalty program and the updated app, we can shout from the mountain tops that we have an industry-leading offering that can help our existing and prospective franchisees reach new customers in a way that’s exciting, engaging and brand-aligned. We’ve always offered delicious food at a fair price and that’s been our recipe for success, now that experience is improved and more accessible, and easier accessibility gets people talking.