May 1, 2012

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The Soft Sell

TCBY Goes Soft to Remain Strong

Tom Haraldsen

May 1, 2012

Who says you can’t teach an old treat new tricks? For decades, ice cream was primarily the one and only frozen confectionary that tantalized our taste buds. Then three decades ago, frozen yogurt became a new craze when TCBY, an acronym for The Country’s Best Yogurt, introduced the product to the nation. How could it get better?

Five years ago, someone discovered how. That’s when the first self-serve frozen yogurt shops began to make their appearance in America, albeit in small cities and towns, and without a national “parent” company driving the concept. That changed a little over two years ago when national players such as Yogurtland, Red Mango, Menchie’s and Utah-headquartered Farr’s Fresh Cafes began franchising the idea. TCBY joined the parade in July of 2010 when it brought self-serve “fro-yo” into both its Sugarhouse and Murray corporate store locations.

When TCBY first started, frozen yogurt was perceived as a healthier alternative to ice cream. It was sugar free and fat free. It also added appeal to a food group—yogurt—that many consumers had previously scorned. Yogurt suddenly became a dessert as well as a health food. Now, with health issues being more pertinent than ever, and with terms like “probiotics,” “live cultures” and “antioxidants” considered assets rather than liabilities in selling product, frozen yogurt, especially the self-serve variety, is the coolest dessert and hotter than ever.

Proof of Concept
The rebranding to self-serve has proven to be a very popular shift in TCBY’s philosophy.

“We started with our corporate stores here in Salt Lake City,” says Greg Allison, senior director of global branding, innovation and licensing for TCBY. “Since then, it’s been a whirlwind. Both of those stores gave us a chance to understand the self-serve platform first hand, to see customer reaction and engagement. With that understanding, we’ve been able to make adjustments in how we market this concept and how we communicate it.”

Self-serve means just that. TCBY customers can choose from a variety of flavors of frozen yogurt, which they draw themselves from soft-serve machines into cups. They can then top those cups of fro-yo with sauces, syrups, fruit, candies or other dry ingredients. Prices are determined by the weight of the dessert. TCBY, like most if its competitors, charges an average of 39 cents per ounce for the finished creation.

After a successful corporate launch in 2010, the company has begun spreading the concept to its franchisees. Allison says the self-serve platform is now in about 130 of TCBY’s 600-plus locations, including foreign markets. But there are still choices for TCBY store owners.

“We still provide options for our operators,” he says. “We have two models—the self-serve model or the full-serve traditional model. All of our growth and interest right now seems to be coming from the self-serve model.”

Some existing locations have combined the two concepts, allowing customers to top their own desserts once they are served over the counter by employees.

Positioned for Success
Frozen yogurt is a highly competitive, hotly desired concept for franchisees.

Salt Lake City alone has many of the national-name shops, as well as some independently owned stores. But there has been fallout already, particularly among the independents.

“The fro-yo category is in the midst of a revolution, and we are certain there will be casualties,” says Tim Casey, CEO of TCBY. “For TCBY, we are rewriting our future. We are packaging up those differentiators around a new customer experience inside our four walls.”

“It’s all about remaining relevant,” Allison adds. “With so many competitors, concepts that have spent years building their brands have the advantage. Location is important, of course, and customers are going to have increased choices of where to go and where to spend their dollars. So we started this process a couple of years ago knowing we had to develop a contemporary design, and capitalize on our heritage of being the category inventor for frozen yogurt shops.”

Allison says the No. 1 thing TCBY leaders did was “listen to our customers to see what they thought. Not what executives, management, operations, or R and D thought—but what our existing customers thought. We wanted to know what they felt our brand is, what needs of theirs we needed to address. Customers today are looking for an experience, not just great frozen yogurt, so we needed to let the customers drive us in what we needed to do. That’s how we positioned TCBY’s new concept for success. You can never rest on your laurels, and unless the customer drives where you’re going, you’ll have a challenge to remain relevant.”

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