Soul & Science
Soul & Science

Season 2, Episode · 3 weeks ago

S2 Episode 6: Shake Shack CMO Jay Livingston | There’s More than One Way to do Things


In a special live recording from New York’s Advertising Week, the week’s episode features Shake Shack CMO Jay Livingston. Livingston, who has held top marketing roles at Bank of America and BarkBox, is emulating Shake Shack’s foundational, high-low strategy of elevating basic fare and democratizing fine dining on a national and global scale. It was a pattern set by founder, New York City restaurateur Danny Meyer, whose first Shake Shack was a cart in a park across from his Michelin-starred restaurant. Now, Shake Shack is well on its way to becoming a billion dollar burger brand. Seeding each restaurant in local chef and art cultures, Livingston upholds Shake Shack’s emphasis on quality ingredients and premium experiences. He’s also venturing toward a mass advertising test, morphing Instagram fame to TikTok and putting a virtual Shake Shack in Sims 4.

In this episode you’ll learn:

  • It’s tempting to stick with what works, but dabble in what’s new.
  • Great companies build marketing and product development side-by-side.
  • Listen to what focus groups tell you, but don’t let them run the company.
  • Think before you quit, you might be leaving a good network and foundation.
  • Shake Shack’s new drive-throughs prove the adage, never say never.

Brought to you by Mekanism.

High film marketers. This week, we've got a special episode of the Soul and Science podcast on October nineteenth in front of a live studio audience, re recorded at Advertising Week New York with Shake Shack CMO Jay Livingston. We had a great discussion about passion brands, building marketing and a product innovation and how there's more than one way to get things done. Stay tuned for our conversation and if you like our show, please don't forget to subscribe and share with your friends and colleagues and give us a follow on social media at Mechanism with a K mechanism M E K A N I S M. Thanks so much for listening. We appreciate it. I am Jason Harris, and you're listening to Soul on Science. Fast forward your marketing mind. In about twenty minutes, we are joined today by one of the best brands in the world that everyone knows, Shake Shock, and this is the CMO j Livingston of Shake Shock. Give a round of applause for j for being here. He took time out of his busy day of opening stores and running product and innovation and marketing to come here and and share his wisdom with us. As Chief Marketing Officer of shake Shack, Jay is responsible for marketing product and the digital experience, including the Shack app, which I know a lot of you guys have. Prior to shake Shack, he served as a CMO of Bark makers of Bark Box, and before that he was Vice president goal Marketing at Bank of America. So he's had a lot of different turns in your in your career. He's also an Angel investor if anyone wants to hit him up after the panel. Yeah, So, J before we get into shake Shack, tell me about Jay Livingston. What's your origin story? How did you get into marketing? Were you did you always know you wanted to get into it or did you kind of find your way there? You know, when I was in college, I was promoting concerts. I went to Miami University in Oxford, Ohio, and we had the only student run concert uh fully student run concert promotion UM basically facility in the country. And I realized that I was kind of good at getting big groups of people to do things. Uh so sometimes getting ahead of you know, if we were trying to talk people to come to a band before they even knew they were interested, and I still say the same thing today. That's kind of what I'm good at is storytelling and getting people to get behind and get excited about something. So I started in music. Yeah, so I started music and that storytelling I knew the true story is. I knew at that time if you want to get into marketing, you had two options. You go work for a consumer package goods company like Craft or Procter and gamble you stocked shelves in Iowa for a couple of years and then you go back to business school. Or do you moved to New York City and make sixteen thousand dollars in a year working for an ad agency. And both of those seems sort of daunting to me. I don't think we can pay people six year. I'm aging myself a little bit. And so I was like what I already felt like. I was good at marketing. And the most prestigious sort of programs interviewing on campus were the banks, and they had these management programs. We'd rotate around for three years in different areas. You'd learn finance tech. My thinking was, I'll go join one of these programs. I'll go to business school, and I'll jump into brand management. Afterwards. Um, so that was my plan. And then I got to Nation's Bank at the time in Charlotte, North Carolina, and we just started exploding in size. So we bought four fifty banks in sixteen years. When I started there, we were sort of a regional, big regional bank, and sixteen years later were the fourth most profitable company in the world. So that growth was just off the charts. People sometimes say like, well, you've never been in a growth company before, when I tell him I was at Bank of America, and it's like, actually, it was a massive growth company. So learned a lot there. Uh.

And then basically from that stage, there's a thing at the bank called the rule of sixty, which is your age plus years of service. So when I turned forty one, I hit that and you get to retire with benefits. They got rid of it years ago, but I was grandfathered in. So I told him a year out, I said, I haven't had more than two weeks of vacation in twenty years. I want to travel the world, restore it old muscle car, like, start a political effort. I wanted to produce a couple of films. I wanted to do all this stuff knowing, I jumped back in and b a CMO somewhere. I know there's a little bit of a long story, but I'll finish soon. So I was also doing some angel investing during that time, and I love being close to these aggressive young founders that were really on the cutting edge of the spaces they were in. And I missed being that close to the company or close to the customer again. So I knew the guys that were running bark Box and basically UM. When I was ready to start after about two years, they said we need our first ever CMO. So I started there, had a great experience there, and then I met Danny uh and he said, we're hiring first ever CMO, shake Shack. You should come talk to Randy Grouty, our CEO. I think you guys would get along. Had a conversation, we got along. I love passion brands like shake Shack. There was so much energy. We're opening one every three days somewhere in the world. That was just super exciting to me. So jumped on. So he pulled you out of early retirement. That's right, it'll be four years in January, and what do you what's the commonalities or differences between I guess banking, you know, selling pet products and fast casual what what do you see, like is there a thread in how you look at marketing or is it all completely different? Well, one is if you think about the three biggest things people might be passionate in life about dogs, food, probably babies which I haven't covered yet, and money, right like, these are the these are the things that really drive people. And I've said I want to work at a consumer facing business it makes a physical product that brings people joy, and bart Box was certainly that, and shape Shacks certainly that. So that's a consistent theme. I think. Do you feel like you staying in banking too long? You know, after after having those two other experiences. The the huge benefit of staying with a company pass where you can jump out and make more money or jump to a little bit higher position, is you have a network within that business and you have credibility and the ability to get things done. And I could have left many times for early in my career would have been consulting firms. Later it was ad agencies, you know, where you could have jumped. But the bank said, whatever you want to do here will help you. Do you want to live in Chicago, will move you there. You want to live in New York, will move you there. If you want to work in one of these other areas, will do that as long as you continue to perform. And I think people are way too quick to run away from that, because my whole goal was when I step out, can I do it at an equal or higher level? And as long as I'm still moving up through the company. Uh, And I feel like I could do that. When I step out, I'm gonna stay there. And I love my experience. I counsel young people all the time. I think before you jump, like if you just do a year and a half at every business, you're not gonna have the same sort of founding love that. I did an interview with the CMO of g Linda Boff, who's been a JEEF and she's well known, and she says, you should always try to reinvent yourself first at the company you're at, before just jumping to another company to reinvent yourself. I thought that was good advice, which you share. Um. All right, So during the pandemic, obviously have to ask a pandemic question, because like, why not how did you have to pivot your strategy to sort of digital from hospitality, and how did that affect the company And how how long have you been there when the pandemic started. I've been there about two years. Okay, so you're in. Everything's changing, people are staying at home. How did you what did you have to do as a marketer? So I recely digital as well, which is...

...lucky for us to be able to do in marketing. And the day before covid broke out, sales at shake Shack were eighty five percent physical in the shacks. In other words, eighty five percent of our orders were in a shack, fifteen percent digital. Three days later it was eight five percent digital pent in shack. And it's been coming down, but it's not It's about forty three percent digital now, and I'm not sure it falls that far below that. Ever, the massive switch for us, it made us look and say, we've got to accelerate all these things we're doing around digital innovation. We need a better app, we need a better website. UH. We blew up our delivery relationship with just one provider and went to six UH and immediately built that and it basically accelerated a lot of the digital investments that we knew we needed to make, whether it's curbside pick up, whether it's UM, you know, having more basically loyalty built into the app. And it even made us say we're gonna launch drive throughs, which we'd always say we'll never do because the way we cook our food that's not a digital effort, but it requires a lot of digital engagement to run a great drive through. So we launched our first one UM about six months ago, and we'll continue to open drive throughs around the country over the next ten years. So you see that staying Yeah, yeah, I mean unless something bad happens. It's hard when you cook everything to order. We're not like a restaurant that's basically pulling out pucks right and frozen food and heating it and turning it out. We make everything to order and that's much harder in a drive through. For us, it's it's a little slower, but we're figuring it out and we think it's important. Yeah. I also read an article last week that you're doing virtual burgers and simms for we are. What's that all about? I mean, we want to understand all these uh new places of where guests are watching and looking and participating, whether it's gaming, whether it's the metaverse and f T S SIMS for UH, we had a teammate with an authentic passion around building a presence within that game, and so we said that's a fun place to learn, Like, let's build a shack in there and kind of see what happens. It's been fun and how do you like do you is it just more experimental or is there some type of measurement you're trying to get out of it. My attitude with all these technologies and frankly all these social channels and even influencers is you want to be dabbling a little bit. It's tempting to go with what's been working and stay there. So you think of all the DTC businesses that learn performance marketing really well, but then when they made changes to iOS or something else, they were they didn't have other places to invest money, UH, and it caught them a little bit off guard. My thing is, you always want a car, even if it's painful, a little bit of money out and I want to understand be real, I want to understand TikTok, and I want to understand these So when one of them blows up. We're not sitting on our heels, were ready to actually invest more. But it means you're gonna have some failures. Um, it means you're gonna invest in a few things that you know won't take off. But I think it's a worthwhile spend to do. When you think about your marketing mixing that way, do you think of this much goes to you know, physical, this much goes to digital, this much goes to experimentation or is it not as measured as that is it? Is it a little more that I really do. One of my mantras is go where the eyeballs are. So part of that is going where they're going. Right. Um, I think we were a little too slow to TikTok early, but we're really good on Instagram. We have a massively engaged platform there, and you know, it's hard when you get really good at something to make that pivot. But the eyeballs are going to TikTok, So we're gonna need to establish more of a presence there and we have to some degree. But that's I think that's a marketer's job is to be ahead of that. Figure out how do I allocate capital to the things that are going to get us the most exposure, uh, and not wasted on things that aren't. So in terms of fast casual, what do you see as the future? How do you think about where you're going next, and how you differentiate yourself from First of all, how do you think of fast casual in your competitive set? Because...

...people want to maybe lump you into QSR, but you're not really QSR. So I guess I'll start with how do you think of your competitive set? And then how do you think of the future of your of your competitive set? I mean shake Check in some ways kind of established this category, right, this better burger category that has been highly copied now. But we have kind of two guests, which is interesting. We have guests that will not eat fast food, but the lead shake Check, right, so that's a big guest for us. And then another guest who eats fast food pretty pretty regularly, and we're a little bit of their splurge, their celebration. It's date night, it's taken the family for a little bit of a special thing. Challenge for us has always how to go from special to habitual a little bit more. And so when we think about our products, you're trying to get the frequency of that of that customer. Yeah, so we're launching a bunch of cool things, not all of which I can talk about right now, to kind of help do that this year. Um. But also we're never gonna chase trends like people love a great burger. You know. Are three things that we focus on is our ingredients raised the bar, like all of our money and our company goes into our ingredients and making those ingredients great, being an asset to our neighborhoods. So we want to feel local. We talk a lot about when someone says, my shake shocks the Upper east Side or my shake shocks on Lincoln Road, I know we've kind of got them. That's a great place for us a shake shock, right, So my shake shock is a big thing. We want to be part of those communities, not feel I can chain. We do a lot of local things. And then lastly, we want to provide like an uplifting experience. So it's not just food, but do you have fun? Do you love the experience? I mean, you can see the vibes from how we kind of came about when somebody people all the time, when I walk out of here, I'll have five people say I love shake Shock. That's not something I'm doing from marketing standpoint, that's just the experience they've had there. And we want to lean in onto that passion like all the time. And so how do you that passion that I like, that idea of the ingredients and community. Um, how do you articulate the shake shock magic? Like if someone didn't know about shake shack, how would you position it or articulate what makes shake shock so unique? One is because I think everyone agrees it is absolutely something different. So how do you articulate that not getting distracted off that ingredient story and telling that story. So a lot of folks know that in New York City because they know that Danny Meyer origin story. They know kind of how we came about out of fine dining. But you know, when we're opening in Kansas City and uh all over the country in the world, we're gonna have to work to tell that story a little bit more. Some places, you can just were an expensive burger and we're compared to places that don't have the same level of ingredients. So you walk out and say, Wow, I just paid eight bucks for that burger and this other one was part of a value deal and the whole thing was tin Bucks. Why wouldn't I do that? Our job is to tell people that ingredients story without having a ton of money to spend on advertising right now, because we're actually not that big even though we're growing. So that's a challenge. We talked about all the time. What do you guys like seven hundred millions something like that in revenue? I will get close to a billion, close to a billion revenue. And so when you think about that shake check magic and that difference, and then you think about your two customers that you mentioned, Um, how do you think about and community? So, like someone who's in New York and is very familiar with shake check, and then you go to you said, Kansas City or you're opening somewhere new, is there like a national or international consistent story or is it a like our shake check story in Kansas City? Is this our shake check story in New York? Is this is it local marketing? Or do you think about it in in a national international level? I think the reality is a little bit of both, kind of kind of like politics, all marketing is local. So when we open somewhere,...

...we really want to go in with the bang. We want to have a great opening, be a part of that community. Work with local chefs. We have local artists that do hoardings around our shacks and in our shacks. Um, we want to be part of that community. Our general managers have a lot of autonomy. We really empower them to act like entrepreneurs and run those restaurants. And I have a regional great regional marketing team that's out there supporting them in all those markets. They live in those markets, so they need to be a part of those communities. They do do nation days, they get involved in charitable giving locally, all that stuff. Well, that said, our ingredients are not going to vary same internationally. We shift ingredients all over the world because if we can't find it in a certain country and it comes from our beef provider or chickenfire, we're going to make sure they get the same thing you have here. So we will not compromise on the food or the ingredients or the way they cook it. And you so you're in I think we talked about this. You're in sixteen countries, about a little over, going to add a few, and you think about, uh, the ingredients is the consistent you have to find in those countries, like basically local ambassadors to carry the story forward, but add the international twist to it, is that how you look at it or or or how do you look at it from a national perspective. One is we own all shake shacks in the US, except for stadiums and airports, which you kind of have to license. We license shake shacks to one licensee per country overseas. Often it's a family in that country that owns maybe one or two other really great franchises. They're own Starbucks or someone like that. That licensee we pick very carefully because they are going to help dictate our brand and how we go in that country and the rest of the world. We have a great international marketing team that works really closely with them to make sure they're demonstrating the values and everything we want them to do. But then they have some freedom to localize that to work with local chefs. They come up with all sorts of Like we had a cherry blossom shaking a pan that was so successful there we brought it to the US. It's been hugely successful year. Korean style fried chicken was a great sandwich there. We worked on with chefs in Korea that we um and then we basically brought a lot of that to the U S and it was a huge hit here. So we we do do a lot of that, but we want to work with the best chefs in the world, work on these really interesting products, and then share all that information. And you have a unique job as a CMO, which I think is different than almost any CMO that I've talked to, where you oversee the marketing but also product innovation. And so I know hot ones has been like very popular. For example, how do you determine as a marketer because maybe the way you guys market the product is part of the marketing, right, you think about that holistically? How do you determine what partners you're gonna go after, and how you do product innovation? Because also people love what they love at shake check, like they want a little innovation, but they don't want a lot of innovation. They don't want like a new thing like another at qusr s, which you're not because you're fast casual. But you know how many times can Taco Bell come out with a new taco combo? Right? Right? How do you think about product innovation for shake Shock? Well, culinary is part of marketing, which is a huge advantage because nobody ever comes to marketing and says, hey, go sell this, and then when it doesn't work, they come to marketing and say, why didn't you sell this very well? And my mantra has always been like, great companies build marketing into the product, and an example of that is hot Ones right now. So you know, when you think about we don't have a ton of money that's been on advertising at this point in our game. We don't do mass advertising yet, um et cetera. Hot Ones we have a great relationship with First we Feast. It's a program that Sean is out there sitting down with celebrities and they eat progressively hotter chicken wings on the Hot one show. And they've got this big reach, and so we said, why don't we build our next...

I see chicken sandwich with them. We know guests one it, We love their chefs and the and their their hot sauces. Let's do it together. And now we've sort of built in this media network and this show and Shaan Evans is out there talking about us in a big way, and and the product that partnership comes with a whole audience that comes with the mega built in UH, and it's it's really killed it. And that's an advantage of having the product be in the marketing organization. I don't sit down like there's a group about ten of us that make all the decisions of the product. I don't sit down with Randy and Danny would come in sometimes in our we've got these celebrity chefs Mark Rosotti and they're awesome and say, man, the mouth feel on this is not right for me, or I don't like how these acids are balancing, Like I don't do any of that. My job is to say, like, what's the story we're gonna tell around this, like and and having those two together and work really closely has worked well for us. You mentioned you don't have enough money to do you know, mass awareness and pain. Do you think that would hurt the brand if you did have the money to do it, Like if you would you do it if you could? Or do you think the way you're building the brand kind of local with partnerships store by store do you think that's a better model. I think Jeff Bezos said uh years ago, like advertising is what you do when you have a bad product. Um somehow. Uh, and he's now Amazon is the biggest advertiser in the world. Uh. So these things change, right, Yeah, when you get big enough these things. Yeah, what I would say is, as long as you're authentically who you are, if you want to grow fast, you've got to tell people about who you are. I believe with mass advertising ultimately you can do it. Like we're up against competitors, UM that have been around for sixty five seven years and they've gone really slowly, and they have the ability to kind of ease their way into that, right, they don't have to bombard it with a lot of advertising. We're gonna have to tell our story out there. It's gonna be with experiential so l great pr a lot of those things. We do all our design in the house. That gives us a big advantage. But you got we gotta tell that story. I think it's scales. So we're gonna test our way into some mass advertisings to understand what that does. Um. All right, winding down here, Uh, the Soul and Science podcast is about this marketing live and the head of the heart. As a marketer and CMO, do you make decisions based on more data and insights or do you make decisions based on getting together with Randy and and the team and saying this is what we're gonna do, So why do you do that? When I got to shake Check, we were all instinct and it was even apparent to me in our interviews. Everything is done by instinct. And Randy said, who would you hire first if you come in? And I said, I'm gonna build a guest insights and analytex function because I want to be instinct lead, but data supported. So I don't want to take away that great instinct of like a bunch of great chefs and foodies that we want to be ahead of where people are, but I want data to report that. I want data say hey, maybe you should look in this direction because your guests really love this, or maybe you shouldn't do this because you're about to walk into a trap. Right, And so that's really what we've done is we're gonna be instinct, glad, we're gonna be dead data supported and manage a little bit more by fact. And now we have a great data organization that helps us really figure that out. And you sort of brought that when you came in. Yeah, for sure, Sometimes where they're like, no, we don't need the course. Of course, they don't like it when someone says you know, they'll say, you're gonna let focus carew I'm just this is real talk. You know, you'll get a founder led business and they'll say, you're gonna let focus groups run this company. Like, we're not gonna do it like Brandy, We're not gonna do focus We're not gonna let him run the company. But it's great to hear, you know, the nuggets that you get, the color that you get when you actually talk to guests and when you hear what guests have to say, it's gonna make us better. It's gonna make our instincts better. If you lean an advertising agency, I'm sure you feel like you're very instinctive creative, but if you're never out there talking to people and getting inspiration, you're probably not. You're gonna make some...

...mistakes. Well, you have to also sell work based on data, so you have that's that's the way you have to do it, all right, Some final soulful questions, I got like two or three for you. What has Jay Livingston learned in his career that you wish you knew sooner? That I wish I knew sooner. Um, I think one is so the angel investing I started doing. I think of this lesson a lot of the time. I decided I was going to set aside some money and invest in a bunch of unsexy, income producing businesses around New York. Uh. And I sat down with this kind of well known VC and I told you my strategy, and he's like, you're doing it all wrong, because that is such a bad way to do it. He goes, you need to take that money and invest in the smartest, most interesting, most authentic people you can find in areas that you're passionate about. And you're probably not gonna make write it off because you're competing against people like me when it comes to really making money. But he said, if you have all those relationships and align yourself with those smart people and learn from them, that will pay off in spades for you and your career more broadly. And I remember why he's even saying that, like, oh, he's so right, that's the really the way I should be doing it. And I've kind of followed that now. But I think that's just a good thing to think about in life, is aligning yourself with smart, interesting, diverse, fascinating people that think differently the way you do and get skin in the game, like help this whether you're investing, angel investing or investing in yourself. That's right, good rule to follow, all right. Last question, do you have a mantra or a quote that you always go back to or that you sort of drives your career or the way you think? If I could put a billboard up because I got that question before, I said the same thing, there's no one way to do it. And I believe that in your life, the personal life and the decisions you make in your personal life. I believe it in your work. There is no one way to do it. You know. I grew up in which I love the South, like up in in Knoxville, Tennessee, and things were kind of traditional. That w into banking and things were kind of traditional. My role has always been to be provocative and contrarian and try to get people to think about is there another way to do this because it doesn't have to be this one way. So that's kind of been a little bit of mon mantra. That's awesome, all right, Well, let's give it up for Jay. There's more than one way to do it, Livingston, and thank you for coming. And I hope you guys got a lot. I hope you guys go get a shake shock Burger after this, please, but thanks for being part of the podcast. We really appreciate it. Thanks for having all right, thanks so much for listening to Soul and Science and we'll see you next week. Soul and Science is a mechanism podcast produced by Maggie Bowls, Ryan Tillotson, Tyler Nielsen, Emma Swanson, and Lily Jablonsky. The show is edited by Daniel Ferreira, with theme music by Kyle Merritt and I'm your host Jason Harris m.

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