Giveaways Create Spokespeople

Since its start in 1993, Chipotle Mexican Grill Inc. has kept its distance from traditional marketing. They have had no need to spend expensive advertising dollars because they have had great success with word of mouth marketing. In fact, Chipotle spends less in a year on advertising than McDonald's does in 48 hours.

Chipotle relies on its customers to spread the word about the restaurant. It does not use fancy commercials or gimmicks to lure people into the stores. They use their quality food that keeps customers coming back for more. Their continued growth is thanks to their loyal customers. Same-store sales increased 13.7% in 2006, which is the ninth year in a row with a double digit increase for this category. The consistent increases show that Chipotle is doing something right.

The main way they get the message out about their restaurant is letting people try the food for themselves. They began this trend in 1997 in Denver. It was Timothy McVeigh's trial for the Oklahoma City bombings. Chipotle regularly sent free burritos to the courthouse. From there, they began to explode and have not looked back. Burrito giveaways are now part of Chipotle's strategy. One of their latest stunts was last year in Midtown when Chipotle gave away some 6,000 burritos. Some people waited for hours on line to get a taste. This word of mouth marketing technique cost Chipotle about $35,000. The price was well worth gaining the 6,000 spokespeople who spread the word for all to hear.

People are exposed to up to 6,000 advertisements a day. The best way for someone to remember a brand is through word of mouth. Something that their friend or even a stranger tells them will have more impact than any traditional media they see throughout the day.

Chipotle uses some traditional media to get a more wide exposure. Their two channels of choice are billboards and radio. However, they spend less than 1 percent of their annual revenue advertising. Word of mouth marketing increases Chipotle's profits tremendously by reaching so many people and saving lots of money on advertising.