August 28, 2019
Joining us on the Marketing Mix Podcast is Jay Livingston, CMO at Shake Shack. Jay discusses his decision to move on from a Fortune 500 company after 20 years, his role as the first ever CMO at Shake Shack and the importance of an art and science equilibrium in marketing. Explaining how the chain is creating more personalized in-store experiences through digitalization, Jay shares the importance of measuring customer satisfaction through both data and instinct.
Jeff Ragovin: Is it true that you were flipping burgers in your first week working at Shake Shack?
Jay Livingston: Yes, one of the great things about Shake Shack is that every employee here spends time working in the shacks at all the various stations. That way, you are learning the business from the inside out. I spent that first week at 5 different shacks around New York City and got to learn every station. It really is such a great thing to do because it gets everybody at the home office to understand what’s happening everyday at the shacks and also creates a cultural consistency of the words we use and the way we think of hospitality.
Jeff Ragovin: What was the hardest part of working in the back of the house at the Shake Shacks themselves?
Jay Livingston: I really think its the grill because we are known for huge lines and crowds and when you have 6-12 burgers on the grill and are leaning over it, it’s hot and physical combined with the pressure of it. So that gives you a great respect for the work. And the fact that we cook everything in the kitchen. I think that was the biggest surprise to me because it is not like a typical assembly line. It is a fast food chain with fine dining roots because we cook everything fresh.
Jeff Ragovin: Before you were at Shake Shack, you were the CMO at BarkBox and prior to that you were at Bank of America for about 20 years. Can you give us background into what kept you at Bank of America for so long and what was it that made you decide to move onto your next job?
Jay Livingston: I knew I wanted to be in marketing, even when I was still on campus, but I thought if I learned finance, technology and operations, it would make me a more interesting candidate when I was to go to business school and get a marketing degree.
I was recruited right out of school to Bank of America. The Chief Brand Officer asked me to do one more before business school, and that was in marketing. From there, we bought over 450 banks over the next 15 years and went from a mid-sized regional bank to the fourth most profitable company in the world. So the growth exploded and there were so many opportunities to work in the marketing and strategy side of the business. We had a multi-billion dollar marketing budget and there was always something new to learn. I got other offers that I turned down because you cannot really replace the trust you gain from starting really young at a company where all the executives know you and your peers start to take leadership positions. One of the things you start to see is kids now jump from job to job but they never establish that deep credibility and relationships, which is the key to ending up in senior positions.
Jeff Ragovin: With BarkBox, Bank of America, and now Shake Shack, you really have three incredible and very different companies under your belt. What do you think are the key components of building a brand that you have learned from each different company?
Jay Livingston: One is that it starts with product and distribution. The fact that you see your customers as pulling you towards them as opposed to you having to push. I’ve always followed the philosophy of the customer really telling you what they want. When I started angel investing, I would look for companies where the consumers are really excited about the product, almost like you don’t have to market it. You can keep pouring money on a product to try and market it, but it's more interesting finding a product that grabs people’s attention right away on an emotional level. When I think of a brand, I think of layering that emotional aspect on top of whatever the experience is because we all know great brands are all about emotion and most decisions in life are emotional decisions.
Jeff Ragovin: One thing in particular that I noticed with Shake Shack is that you have new digital kiosk screens. How are you maintaining that personal experience with your customer as people are going to put their orders in on a screen?
Jay Livingston: We have done a lot of research over the last couple of years on what we call guest experience. We have been looking at what makes that emotional connection and what guests find most and least appealing. One of the things we found is the ordering experience of talking to someone is actually not a huge driver in satisfaction or likelihood to recommend. They want to put in the order quickly and have the pick up go smoothly, which is something we are working on right now as well.
We are really committed to looking at digital ways to make that a faster, cleaner, and easier process. It’s funny because its faster to use the kiosk, but you can actually take more time to decide what you want because you do not have the pressure of someone in front of you. We are testing kiosk around the country, but I’m not sure if that ordering process with a cashier is really the key to creating the guest experience we want.
Jeff Ragovin: Are you guys leveraging any type of consumer data to improve on the entire customer experience?
Jay Livingston: I would say a lot of Shake Shack growth has been fueled by instinct. The first shack was there for over 5 years before we even added a second shack. We learned that secret recipe just by trial and error.
As we are scaling up and opening a new Shake Shack every 4 days over the next 3 years, we have realized we need to be leveraging that data into our fact-based decision making. We recently hired a lead for consumer insights and analytics so we can bring that data into our decision making. It’s good to have data to balance the instincts and opinions between the executive management at the company.
Jeff Ragovin: Why did Shake Shack decide to bring on a CMO after 15 years?
Jay Livingston: It really starts with how fast we are scaling up. The company has a very good sense of who we are and what we do well, but when you talk about the mass amount of growth we are going through, you need more key leaders, such as the Chief Information Officer we just brought in. I think the thought was to bring in people who have also been through huge scaling experiences to add that level of expertise on scale to grow well at the pace we are growing.
Jeff Ragovin: Do you see the Shake Shack brand evolving in a different direction over the next 3 to 5 years?
Jay Livingston: I think of it in terms of evolving the basics because we are still a burger place at our core. We do a few things really well such as with our ingredients, the way we cook our food, etc. We want to evolve those things such as with the sustainability of our packaging with making it so it's less non-recyclable and compostable waste and also keeping our food warmer as delivery is becoming a big deal for consumers in general. We are also thinking about how we can evolve using technology and web ordering and kiosk to make it work for our guests and staff. We are constantly doing collaborations with some of the best chefs in the world to stay on the cutting edge. With that, we are not going to move away from the core of who we are which is great burgers.
Jeff Ragovin: What has been your favorite collaboration and what were some of the results you saw?
Jay Livingston: I think of collabs as two different categories. There are the promotional collabs, such as when HBO came to us and said they loved Shake Shack and wanted to work with us with Game of Thrones. We developed a DragonGlass Shake that bled down the side in a Game of Thrones cup and a Dracarys Burger with a fiery shack sauce. We then brought a throne to the Shake Shack in the West Village and did an organic program with them because we truly liked each other’s brands. We love doing collaborations to stay in the fabric of the cultural conversation. The other thing we do is highly culinary partnerships, such as the one we did with EMP Winter House where Madison Park had a pop-up in Aspen. We also have done a breakfast sandwich collab with Dominique Ansel. We are constantly thinking of chefs we can partner with to learn ourselves and keep putting new things on the menu.
Jeff Ragovin: Thank you for joining the Marketing Mix Podcast.
Please note, the above has been paraphrased for editorial purposes