The Recession Transformed Hungry Howie's Into a Pizza Titan
As CEO Steve Jackson puts it, Hungry Howie’s grew up in Detroit. This is more than just a literal reflection of the Michigan-born brand’s 44-year history. The Motor City is also where the pizza chain was forced to leave its past behind.
In 2008–09, the decimated auto industry was clawing for survival. Typically, pizza brands weather—sometimes even thrive—during economic storms. But this was something different altogether. “It didn’t happen,” Jackson says. “And it didn’t happen for anybody in that [pizza] category because I think the whole world was kind of paralyzed with what was going on.”
Sales weren’t exactly plummeting for Hungry Howie’s, but Jackson says the turbulence served as a wake-up call for the brand. It was time to challenge the status quo. With some new hires in place, Hungry Howie’s embarked on a brand refresh that stretched over a seven-year span. From remodeling stores to changing the way it trained employees, the company lifted the shell off a legacy model and looked for a bigger one.
A new ad agency was brought in. Marketing completely redone. A retail hook emerged, and a new corporate identity was formed.
It would be difficult to imagine Hungry Howie’s without the $5, $10, $15, and $20 deals that highlight online coupons and storefronts at more than 550 locations across America. But that idea was born in this brainstorm.
“It’s a large percentage of our business, and our customers know what those promotions are even though maybe every six to 12 months the offer could change within that dollar segment,” Jackson says. “We have a promotion for every size budget and family, and we’ve been living with that mnemonic phrase for eight years now. It’s really been identified with our customer base.”
Before diving into more changes, here are some of the numbers. Hungry Howie’s has reported same-store sales growth for 28 consecutive quarters. In 2016, that number was up 2.84 percent. Hungry Howie’s expects to open 25 locations this year, in markets ranging from Raleigh, North Carolina, and Houston to Bakersfield, California. The broader goal, Jackson says, is to add around 250 units in the next three and half years.
Hungry Howie’s emerged from the fog of the recession with a business model that was sturdier and more scalable than before. And the key building block was technology.
A decade ago, Jackson says, the brand’s tech budget was literally the salary of one person trying to manage a few things. Now, it exceeds seven figures. “It’s kind of mind boggling,” he says.
Jackson admits he was one of the early naysayers.
“I said, ‘You mean to tell me a customer is going to go turn on their computer, find the website, and try to place an order?’ They can pick up the phone and call in two minutes. Why would they go through that trouble?” he says.
He even recalls what it was like in the 1990s, when a team came to his desk and asked for a $1,500 investment to develop a website. His initial reaction? “Nah, I don’t think so,’” Jackson says with a laugh. “It’s interesting looking back on those times. We obviously did it. It didn’t long for them to convince me, but that was my first thought.”
Everything Hungry Howie’s has done to reboot its brand since has had a technology base to it. Print, especially in the pizza industry, was once where the lion’s share of marketing dollars were spent. Remember those coupons in the mailbox that showed up along with six other pizza competitors?
Well, now Hungry Howie’s can focus its marketing and be a bit more strategic thanks to digital. The company aligned itself with data scientists out of Los Angeles and, thanks to POS information, figured out a way to track customers and, in turn, market to the right people. Speaking of the POS, Hungry Howie’s unified its brand to one system during the last three years. “It has really brought us down a path of complete standardization where we get real-time information,” Jackson says. “Our franchisees literally have the ability to watch what their restaurant is doing on their smart phone in real time. So it’s giving them great communication and understanding of their business. And by having standardized menus, I get a report at 9 every morning of what exactly took place in the country yesterday with every single metric that is important to us. So we can make decisions quicker.”
The amount of information that has come out of this has been staggering.
“We cycle and watch how often people order. And when they hit a certain cycle where we don’t see them after x amount of days, they’ll get an offer,” he says. “And if they don’t come back, they might get a little bit better offer the next week. It’s kind of tracked in a pretty sophisticated manner that brings customers back and it’s all automatic within our system. That’s pretty important to the way that we manage our brand.”
This is especially vital in an industry where guests and operators seldom get to know each other. Jackson again recalls the rocky road to get here.
In 2009 and 2010, when sales were flat, trying to remodel and rebrand Hungry Howie’s wasn’t exactly met with enthusiasm from franchisees. Imagine trying to talk a survival-mode operator into spending $8,000 on a new sign. That’s exactly what Jackson and his team had to do, however.
The logo changed. Designs were cleaned up. This led to some franchisees being let go as the company realigned its goals.
“We had to do a lot of show-and-tell with our franchisees where we would take some of our own stores, we would remodel a store, and we then we would share with them sales six weeks before, six weeks after and show them the differences. So it took them a while before they started to drink the Kool-Aid. Then it seemed like the decisions we were making were paying really good dividends.”
Hungry Howie’s also narrowed its charitable focus in 2010. The company decided to commit to raising breast cancer awareness. In October, during Breast Cancer Awareness Month, Hungry Howie’s prints every pizza box pink. It makes a donation for every pizza sold and puts together emotional videos to air on Facebook and on the Hungry Howie’s website. The Love, Hope & Pizza campaign has rolled out every year since and is responsible for close to $2 million in donations.
As for the pizza itself, Hungry Howie’s continues to innovate while leaning on its core—flavored crust. Every quarter the brand rolls out a new crust to take advantage of trendy flavors. Spicy sesame and Sriracha are some recent examples. Hungry Howie’s also has a gluten-free crust now so it doesn’t lose the “veto vote” on family pizza night.
“Our EVP of marketing, Rob Elliott, constantly reminds us that Hungry Howie’s owns the two most important words in the restaurant industry: Hungry and flavor. And if we’re able to utilize those and market around those, it’s really an advantage for us,” Jackson says.
In the last two years, Hungry Howie’s has also hired a business leadership team coach. There are quarterly meetings to meet with the coach, as well as weekly meetings in-house. These revolve around company culture. Hungry Howie’s was asked to identify what the core values of the brand are and what the core focus is.
Five values were identified: Treat everyone like family. Have integrity. Do what you say. Be hungry for growth. Have positive energy.
“We literally hold a standard to the people we work with that they really have to have these five core values,” Jackson says. “Our teams meet with all the different departments and they evaluate all their people and really with that goal, if people don’t meet those values, they’re going to have to be replaced. And if you’re going to hire somebody, you better make sure they have those values. And if we’re going to sell franchises to someone, we really want them to have those values.”