How Chili’s Turned Listening To Customers Into A Business Turnaround

Chili’s is on a winning streak and doesn’t look to be slowing down any time soon.

During a recent earnings call, chief executive Kevin Hochman, shared Q2’s same-store sales growth results, which reached 8.6%, or 680 basis points higher than the casual-dining segment’s average. A basis point equals 0.5 of a percent, so you can do the math on how great things are going for Chili’s. The chain is putting on a masterclass in how to turn around a business.

The big question, though, is how is it pulling it off?

Three focus areas have been pivotal in spurring the near five-year uptick: improving the food, service, and atmosphere. Part of its strategy to ensure better customer service is being receptive to customer sentiment. Following pushback, the popular Chili’s Skillet Queso was added back to the menu just weeks after being discontinued, resulting in a 20% increase in its sales, compared to the Southwestern Queso that was meant to replace it.

Nachos became another Q2 highlight after Chili’s decided to relaunch them, with overall sales growing by 170%. The chain also introduced thicker bacon strips, and added them to its bacon cheeseburger, thereby acheiving a 40% sales increase compared to the original. Hochman cited menu upgrades as another potential way to increase same-store sales. Chili’s decided to introduce an upgraded chicken sandwich lineup after noticing that 80% of customers purchased at least one chicken sandwich last year. The new menu items are scheduled to launch in April. 

Value-focused marketing is the goal. According to Hochman, customers are tired of the high cost of dining out, so the company plans to continue emphasizing its unbeatable value. Aside from relaunching and adding menu items, it’s mindfully eliminating some as well. In the same way that Chili’s has paid attention to its customer base, it’s also responded to the workflow operations at its locations. Six menu items were removed in Q2, each of which made employees’ jobs more challenging and orders inconsistent. 

Moving forward, rather than offering a slew of limited-time menu items, Chili’s plans to hone in on food innovation, which it believes will result in core offerings that not only taste better, but also help to simplify operations.

At the end of the day, Hochman said it’s all about the menu, operations, marketing, value, and customer experience.