November 20, 2009
As the CEO of one of the largest full-service restaurant chains in the United States, Nelson Marchioli credits public relations for Denny’s success. The 24-hour diner operates more than 1,500 locations in the United States and six other countries.
Marchioli, who has been with the company for eight years and is a 30-year veteran of the restaurant industry, speaks with The Strategist from the Denny’s headquarters in Spartanburg, S.C., about reaching customers via social media, the company’s continued diversity efforts and leading during a recession.
How does public relations demonstrate the bottom line at Denny’s?
Most recently, this past February, we ran an ad during the Super Bowl [offering a free Grand Slam breakfast to customers on Feb. 3] and it was really the public relations that elevated this event to the level that we still enjoy. It changed the image of the brand. The baggage that any business collects over a 56-year history is significant — both good and bad. And on that day, thanks to the PR coverage that we got, we changed the image of the brand, particularly with the media and the journalists here in America. I would have never thought one event could have done that — but it did. [Denny’s served approximately 2 million free meals during the eight-hour event.]
As the CEO, what do you think the value of public relations is to your company? Is it important to what Denny’s is trying to accomplish?
It’s critical. Eighty-four percent of my restaurants belong to franchisees that have the privilege of using the Denny’s brand, and that public image not only means a lot to me corporately, but it also means a lot to my franchisees across the country. So the valuation is quite high.
It’s great to have public relations for crisis, but it feels a lot better when we’re talking about our “Better for You” products and the things that everyone in America is concerned about, like the obesity problem and what we are doing as a restaurant chain to address those things.
Denny’s has garnered a lot of attention from promotions for the new low-calorie Grand Slam Breakfast as well as this past year’s Super Bowl ad for a free breakfast meal. How have you used social media to reach an end goal?
Our new menus [that debut this fall] feature our Twitter and Facebook addresses where you can reach out to us. We use social media far more than we used to, and it’s incredibly important that your PR firm has that understanding of how important that type of media is.
Certainly, our internal people didn’t understand how to utilize it. It’s caused the marketing department to be far more familiar with it — with our late night initiatives, in particular.
What does it take to reach your audience on your Twitter feed (@DennysGrandSlam)?
In the past, and I’m going to say 10 to 20 years ago, businesses could run an ad on television — and I’ve been in the restaurant industry now for over 30 years — and sales would go up double digits. That doesn’t happen anymore. And it’s because the consumer has so many different directions that they can go in as it relates to media — it has to be more personal. I’ll call it the Internet generation. You have to make yourself visible through the various avenues, be it Facebook or Twitter. So we try to be easily accessible to those users to get our message across.
Regarding the changing face of consumers, do you think that they are more empowered or engaged with all of the interactive and social media platforms — or is it harder to break through all of the clutter and noise to reach those consumers?
I think they’re more selective. They are more engaged, but they’re more selective — so you have to move with the group that you’re trying to speak to. For those that continue to try and broad-brush through the general media, perhaps they’re not missing out as they probably will be in the years to come.
How effective are these social media tools for your company?
They’re critically important, because they’re so focused — they’re special groups. There are special groups of moms who are concerned about “Better for You” [meals] for children. There are so many different interest groups that you can talk to directly. So I think [social media is] with us — and it’s even going to become more specific. It’s the biggest challenge that marketing and PR people have.
PR folks seem to be more attuned to all the opportunities with the Internet at this particular time — far ahead of the marketing folks. And that’s interesting, but anyone who doesn’t become more aware of it and become more focused on who they want to speak to through these various sources is going to be left behind. It’s a daily challenge as to where do you go as a business. What do you use? And what do you put your money behind?
In the 1990s, Denny’s underwent several business crises after being accused of racial discrimination. How did the franchise overcome this?
I’ve been here for eight years now, and from the first day I got here, I continue to say that we are a better company because of all those allegations. [There was a series of racial discrimination allegations against Denny’s in the mid-1990s involving servers denying or providing inferior service to racial minorities.] We have often been ranked at the top or in the top five of the best companies for minorities to work for or do business with. Fortune magazine and a lot of other folks have recognized us, and diversity is part of what we do here every single day.
How did we overcome it? To be quite honest, it used to be something that I talked about with great regularity up until the Super Bowl ad and the Super Bowl event and the great public relations [we’ve experienced] recently. It’s rarely been in the conversation since Feb. 3 of this year — and I thank public relations for that.
Do you have any advice for others who are dealing with crisis management?
Tell the truth and do the right thing. And then, you better let people know about it. You’d better find a way to communicate what it is you’re doing. Don’t put your head in the sand and ignore it.
Talk about those continued diversity efforts and how public relations has led them.
We have a wonderful relationship that started way back with the NAACP, and they helped this company understand the issues [it] needed to address and the kind of solutions that it had to come up with. Today, we have that same relationship, and it’s stronger than it has ever been.
We work with people like Tom Joyner. We give scholarships to single parents through his morning radio show every week to help single parents who are trying to go to college and need financial help [through the Tom Joyner Foundation].
So, we try to work with as many diverse groups as we can and to be part of the community. Before we didn’t act that way — either we were naïve or not well informed [about] what we should be doing — and that’s why we’re a better company today for minorities, as well as a better company to do business with.
This year, in South Carolina, we are one of the lead sponsors in helping diversity suppliers become more active or successful. We have goals every year internally to grow our diversity purchases — for African-Americans, Asians, Hispanics, as well as women. And every year we do a lot better. We work very hard to be a role model for other organizations in that area.
What are some of the challenges of being a leader during a recession?
I think leaders have to be bold. If you continue to do what you have been doing, you are going to have a problem. I know many leaders are hunkering down and saying, “This too will pass, and then we’ll be ready when we get through this economic downturn.” We have that luxury as leaders.
We’d never advertised [during] the Super Bowl before. We’ve certainly never approached public relations [in the way that] we have in the past 15 months. Leaders have to lead. And it isn’t always going to be comfortable, and you’re never going to have as much information as you’d like.
It’s about taking risks. It’s not about foolhardy risk, but it’s about calculated risk. Today in our country, I see fewer and fewer leaders — and I hope that changes, and I hope we effect that change somehow.
What makes a good leader?
You have to be as informed as you can be. You have to believe — and you have to be passionate about what you believe. And then you have to do what you say you’re going to do.
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