In our post last month about the viral Chipotle Scarecrow video blah blah blah, we told you to watch out for the company’s October 17th Q3 earnings call. As expected, there was no mention of the video’s impact on Chipotle’s revenues.
[In that post, we also told you how we planned to assess the video’s impact when Q4 results are announced next January.]
In the lone reference to Herr Scarecrow on the call, Chairman and Co-CEO Steve Ells referenced how the story had “generated more than half a billion media impressions” and that “Ultimately, our aim in making the film was to spark conversation…”
Yet it didn’t do that with the ten Wall Street analysts on the call. In nearly 30 questions, not one of them asked about the Scarecrow.
But we captured a bonus. In his opening remarks, the CEO offered this gem:
To help keep Chipotle top of mind with customers we have continued to run our skillfully made advertising campaign in Chipotle markets around the country…During the course of the campaign we saw noticeable sales lifts in sales comps and average daily sales compared to our non-advertising markets.
Our improving sales trends are benefiting from the greater awareness we believe we are achieving with our marketing campaigns...
You will hear this sort of marketing-sales cause-effect statement in a public company’s earnings discussion less than 10% of the time. It’s so rare that analysts always want more detail.
But in response to such a question [“Could you talk about how great that lift was, how sustained it was?”], Chipotle’s CFO said this:
“…we’d rather not parse the components of the comp…But we did see in markets where we did advertise compared to markets that we didn’t advertise that we saw a lift and it was a meaningful lift. But in terms of saying how much of that was in the comp we’d rather not say.”
That last bit harks back to this post of ours, in which we debunked the notion of marketing best practices and benchmarks. The Chipotle CFO’s statement is Exhibit A for why you’re never going to find detailed campaign measures in the public domain. So the next time your client or boss asks for some, point them to the above statement.
One more bonus in this Chipotle’s earnings call. The CFO said that the company’s marketing costs were up significantly in Q3 and year-to-date compared to last year. And he said they would go higher still in 2014.