The Trusteeship

Member Interview: Linda Lang

LINDA LANG is CEO and Chairman of the Board of Jack in the Box, one of our nation’s leading fast-food hamburger chains, with more than 2200 quick-serve restaurants in 18 states.

You’ve been with the Company for over 20 years having worked your way up the corporate ladder from your early marketing days in the mid-80s.  Looking back now as CEO and Chairman of the Board, what do you believe have been some of your most difficult challenges? We’ve been very effective at managing aspects of our business that are within our control, like refranchising restaurants, expanding our restaurant brands in existing and new markets, and implementing margin-improvement initiatives. Some of the biggest challenges we face right now stem from something we can’t control – the economy. As the recession has worsened and unemployment rates risen, consumers have cut back on their discretionary spending and that’s had a negative impact on sales and margins at our restaurants.

Of which of those challenges would you say accomplished something for which you are most proud? We’ve been very successful at increasing our franchising activities and growing the Jack in the Box brand. Four years ago we set a long-term goal for our Jack in the Box system to be about 70-80 percent franchised, which would be more in line with the franchise ownership of other major fast-food chains. In that time we have increased franchise ownership from around 25 percent of our system to more than 47 percent, and we’re well on our way of achieving our goal by 2013. Last year, despite tightened credit and heightened lending requirements, we refranchised 194 restaurants. And in a year when a lot of restaurant companies curtailed their growth plans, we opened 64 new Jack in the Box restaurants, 21 of which were franchised.

Being a pioneer of the drive-through concept, has Jack in the Box made any big changes since its implementation to meet the needs of its consumers? The drive thru still accounts for nearly 70 percent of our business, so it is still an important part of our business and something that differentiates us from other segments of the restaurant industry. But we’ve always taken pride in being an industry innovator. Our menu, as an example, includes several products not commonly found on a quick-serve menu – like our 100% Sirloin Burger, Chicken Fajita Pita, Real Fruit Smoothies, and Teriyaki Bowls. Our latest offering, Grilled Sandwiches are unique among quick-serve restaurants and feature quality you might expect from a fast-casual restaurant, but at a lower price point and with the convenience of drive-thru service.

Jack in the Box implemented a multi-million dollar viral marketing campaign that showed Jack getting hit by a bus while walking across a street trying to sell Jack in the Box food. Viewers were directed to a microsite to check on Jack’s condition. The site featured a few “get well” videos and a banner that read, “In lieu of sending flowers, please order anything on the menu, anytime of say. Jack would want it that way.”  Can you comment on any resulting surprises? Well, I’m very relieved that Jack has fully recovered from that unfortunate accident. That was our first major campaign leveraging social media, and the outpouring of support for Jack (and our brand) was tremendous. We weren’t really surprised that our microsite attracted so much traffic, since that’s what the campaign was intended to do. The surprises were really in the details – like the fact that “Hang in there Jack” was one of the most searched keywords on Google immediately after the Super Bowl, or that people visited a makeshift vigil for Jack set up in his parking space in front of our corporate offices, or that the buzz generated by that campaign continues more than a year after the accident. One of our objectives with the campaign was to highlight the expansive menu at Jack in the Box and the fact that guests can order anything on our menu day or night. That means you can order French toast sticks for dinner or a sirloin burger for breakfast. But we also used the occasion of Jack’s recovery to launch our new website and a new logo.

What’s a successful marketing campaign?  Is it judged by dollars or product sold or a combination?  Or, is it something else? For Jack in the Box, the ultimate success of a campaign is generally measured in sales or traffic. Some of our recent value promotions, like our $1.49 Fish Sandwich, were primarily intended to drive traffic to our restaurants while advertising supporting Grilled Sandwiches is primarily intended to generate sales. And of course one of the objectives of the campaign launched during last year’s Super Bowl was to remind customers that our full menu is available all day, every day.

What percentage customer base is female?  Has that changed in the last 10 years? Young males are the primary users of fast-food, so it’s not surprising that our customer base skews more heavily toward men. And the ratio really hasn’t changed much in the past decade.

Is there a difference in male/female brand loyalty? We don’t see any significant gender differences when looking at brand loyalty.

People talk healthy-eating, but do they really put their money where their mouth is?  Has that changed in the last 10 years? Consumers are much more aware of nutritional information these days and want choices when it comes to their meals. Our menu has always been one of the most varied in the industry and is even more so today with the addition of grilled chicken strips, real fruit smoothies, teriyaki bowls and entrée salads, including a new variety (Grilled Chicken Salad) that we’re launching on March 1. We have nutritional information on our products available in all of our restaurants and post information online as well. Our website also includes a “Build A Meal” tool that enables users to customize their orders and evaluate the resulting nutritional information. Never before have guests had so many choices at Jack in the Box.

Has there been a problem that was resolved that would have been resolved differently if a woman led that resolution? I don’t know if gender can be cited as the sole factor in resolving a problem. People have different perspectives on issues for a variety of reasons. Gender may influence a decision, just as much as the various other dimensions of diversity, from ethnicity and national origin to education and physical ability. We’re proud of our tremendously diverse workforce at Jack in the Box and embrace the diversity of thought that permeates our organization. By the way, Jack in the Box was recently named one of California’s top companies for gender diversity, according to a study by the University of California, Davis Graduate School of Management. Jack in the Box ranked fifth among the state’s largest companies, as measured by the percentage of women in board and executive positions. Jack in the Box was similarly recognized in the annual survey in 2008, 2007, 2006 and 2005.

What do you hope your Jack in the Box legacy will be? I’m not at all concerned with how history will view me personally. But at the conclusion of my career here, I hope to reflect upon our success in achieving the goals we’re currently pursuing with our long-term strategic plan. Those goals are to grow our business and expand our brands, increase franchising activities, improve our business model, and reinvent the Jack in the Box brand through menu innovation and major enhancements to guest service and our restaurant facilities. If, when I retire, the Jack in the Box brand is viewed as one of the most admired by our guests and workforce, I’ll be satisfied.

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