Creating a Unique Experience at the Doughnut Shop With Betsy Hamm, CEO of Duck Donuts
Betsy Hamm is the CEO at Duck Donuts, where she previously served as COO and Marketing Director. Known for her ability to motivate and engage teams to achieve positive results, Betsy leads the development and direction of Duck Donuts’ short and long-term goals, oversees and guides the day-to-day operations and marketing, and is in charge of financial goal management. Responsible for all facets of franchisee openings and performance, she works alongside her team to identify and provide the necessary resources allowing franchisees to gain maximum profitability and success. Born in the Outer Banks in Duck, North Carolina, in 2007, Duck Donuts has expanded to over 115 franchises and is still growing.
Here’s a glimpse of what you’ll learn:
Betsy Hamm explains how Duck Donuts began
What makes the Duck Donuts experience different from other doughnut shops?
How Duck Donuts plans to grow to 250 stores without ruining the personalized customer experience
What does Betsy look for when vetting a potential franchisee?
Why Duck Donuts’ business remained steady during the pandemic
How Duck Donuts franchisees connect with their customers
Betsy’s biggest worry and her biggest reason for excitement
The worst advice Betsy has ever received
What you’ll learn in this episode:
How does a doughnut shop personally connect with its customers? While offering loyalty discounts on an app or running an email campaign may have its benefits, how do you make a visit to a doughnut shop particularly memorable and unique?
A typical doughnut shop visit includes choosing from an array of pre-prepared doughnuts waiting on a shelf. Not at Duck Donuts! The Duck Donuts’ experience is entirely different. Customers select their doughnuts and toppings, then watch the entire creation performance. Excitement and anticipation build as they see their personalized donuts dunked into the fryer. When the doughnuts are freshly baked and still warm, customers witness their chosen drizzles and toppings added. The customer walks out with their customized doughnuts, a sweet staple of happiness ready to be consumed.
On this episode of From Persona to Personal, Roger Hurni is joined by Betsy Hamm, CEO of Duck Donuts, for a conversation about growing a doughnut brand through franchisees that share Duck Donuts’ values and are committed to a memorable customer experience. Betsy talks about their high expectations for franchisees, how they provide the resources needed to produce the unique Duck Donuts’ signature experience, and how they create a personalized customer experience every time.
Resources mentioned in this episode:
This episode’s sponsor:
Today’s episode is brought to you by Off Madison Ave. At Off Madison Ave, we create meaningful moments of brand trust and influence how people interact and engage with brands.
There is a science behind tapping into your audiences’ desires and motivation. After all, if you’re not changing your audiences’ behaviors, you can’t truly unlock all of your brand’s potential.
The proven models and methods of Behavior Design is the strategic foundation for your brands’ success.
Episode Transcript
Intro 0:02
This is From Persona to Personal podcast. Today's episode is brought to you by Off Madison Ave. Off Madison Ave creates meaningful moments of brand trust and influences how people interact and engage with brands. The science behind their approach taps into your audience's motivations and desires. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. Now, let's get started with the show.
Roger Hurni 0:34
Hello, everyone, I'm Roger Hurni, the host of From Persona to Personal where I get to speak with top leaders changing customer behavior so they can propel their brands forward. Today I have with me an amazing guest. One that's near and dear to my heart as far as the product goes. But before I get to her, today's episode is brought to you by Off Madison Ave. At Off Madison Ave, we use behavioral science to create meaningful moments of brand trust with influences how people interact and engage with companies. Our behavioral approach taps into your audience's motivation and prompts them to shift behavior. And if you're not changing your audience's behavior, you can't truly unlock all of your brand's potential. These proven behavioral models and methods are the strategic foundation for your brand success. Is it offmadisonave.com to learn more. Now I am super excited to have with me Betsy Hamm who is the CEO at Duck Donuts. And before I even go into the rest of her introduction, I have to tell everybody that I believe doughnuts deserve their own place on the food pyramid. So this is going to be very special for me. At Duck Donuts, Betsy oversees the complete direction of Duck Donuts and leads the development of the company's long and short term goals as well as its strategic initiatives. She is committed to building and protecting the 115-plus unit growing franchise brand by generating awareness and driving revenue. She works alongside her team to identify and provide the necessary tools and resources to ensure franchisees achieve the ultimate and profitability and success. Betsy, welcome to the show.
Betsy Hamm 2:07
Thank you. Thank you so much for having me.
Roger Hurni 2:09
All right. How was the intro? Did I mess anything up?
Betsy Hamm 2:11
That was perfect, especially the doughnuts on the pyramid. I like that a lot. I obviously completely support that idea.
Roger Hurni 2:18
Feel free to steal it. I'm sure you will use it in a meeting at some point. That is very true, actually. Because I freaking love doughnuts growing up in New York City doughnuts and bagels. Were my jam. So I was very excited about today's today's conversation. Let's get let's jump into it to that end. I know the restaurant started in in 2006. And I think a space around 1000 square feet or so. Yes. Yeah. Okay, well, it's been growing nicely. It's a really interesting concept can let's just give the listeners just an overview of a Duck Donuts sort of the roots of it.
Betsy Hamm 2:52
Sure. So, Duck Donuts started in the Outer Banks of North Carolina and as you mentioned in 2006 2007 is when our first location opened in Duck, hence the name, which is a very quiet little beach town and at the time in 2006 2000 Well before 2007 They didn't have any donut shops. So our founder Russ DiGilio was on vacation with his family. And one night they were reminiscing about these warm doughnuts they used to get in the boardwalk growing up as kids, and how there just wasn't an option for any doughnut and the Outer Banks. So what started as just a fun evening conversation, Russ being the entrepreneur that he is decided to open this new donut concept in in the Outer Banks in Duck North Carolina as well as Kitty Hawk. So luckily, her name is not Kitty Hawk doughnuts that would be even more challenging. So it started off as two locations took a few years to really get the local or the loyal groups from the guests coming back year after year. But after about year three, that the concept of Duck Donuts really took off. And people were asking for Duck Donuts to be in their hometowns because they were only getting them you know, once a year when they're on vacation. So after so much fanfare and people just wanting these doughnuts year round, Russ decided to start franchising the locations. So slowly started opening outside of those towns that feed into the Outer Banks from a touristy area and continued to grow. And what makes Duck Donuts so special is is when you walk into our doughnut shop, you're gonna smell doughnuts, but you're not going to actually see any doughnuts cased waiting for you at the cash register. So you walk up to the cash register and you order your doughnuts and everything is a warm vanilla cake doughnut. And then you choose your coatings or toppings or drizzle so you can pick a chocolate doughnut with rainbow sprinkles or maybe one of our favorites is a maple bacon donut. So you pick your doughnuts and then you get to watch the entire experience. So you see them dropping them into the fryer. You see them taking that out of the fryer all nice and warm, and putting those toppings that you just chose on top and then handing you a box of warm customized doughnuts.
Roger Hurni 4:54
Well, it's an amazing experience. I I use my background and behavioral marketing to talk a lot about of personalization in terms of marketing, but I've had company owners ask me like, oh, how do we personalize that operational challenge, you know, the operational challenges that we have? Is that an operational challenge for you to get such a customized experience each time, or are people not that much in a hurry to like get out the door?
Betsy Hamm 5:19
You know, it depends. So if somebody walks up to the cash register, and they customized Well, doughnuts, and maybe it's the first time they've been there, it definitely takes some time. But what we've gotten good at the last few years is at the counter that we have counter mats with some recommended fan favorites. So and we always have a seasonal assortment. So that really takes the the thought process out for the for the customer if they don't want to customize their own donut. So they may quickly point to, you know, 12 different terms that we have right there in front of them, that does speed up the process. So I would say the, the more of the challenge is on the customer side, from our team side, ticket prints, they have everything on there, and then they stand there. And they can we have some pretty quick toppers, you know, who can deliver those top doughnuts very quickly. So it really comes down to more on the customer side where especially if they're a new customer or the first time in the shop, it does take them a while to pick up their doughnuts, but that's why we give them so many options of our fans favorites.
Roger Hurni 6:11
Duck zillion, I think you call it?
Betsy Hamm 6:15
A million combination. Absolutely.
Roger Hurni 6:18
Screw 31 flavors you need
Betsy Hamm 6:22
Icing and the toppings, and you can get a drizzle on top. So I mean, I did see. And I have to find this. I just mentioned the third day there was a math class like in a high school or college, who took our menu and did tell us how many toppings or how many options there were. And it was a pretty impressive number. So I need to find that because I think it's probably even grown because we've added a few more toppings. Well, I think
Roger Hurni 6:41
Somebody told me once that he knew three chords, you could write a million songs. I don't know if that's true or not. But I gotta imagine, if you have more than three different kinds of toppings, you've got a million combinations right there.
Betsy Hamm 6:52
Yeah, Duck zillion. See?
Roger Hurni 6:54
There you go. Well, I know that growth is one of your primary responsibilities. And I've been fortunate to work in a couple of startups that went from five to like, a few 100, in very short order. And it's a challenge, because you, you have to maintain the brand. And I think, you know, we were discussing that you've got this goal of getting to 200 stores, maybe 250 In the next two to three years. How what's the plan there that you can share that allows you to do that without ruining the experience?
Betsy Hamm 7:27
Yeah, that's a great question. And it's something we're very cognizant of. So, you know, when you go back to those few locations that started off in the Outer Banks, and then you fast forward to, when I started in 2016, we had 22 locations. So getting that 22 was a pretty quick opportunity for us to grow. But then it was like, Okay, what do we need to do to get to the 100 150 shop into 100 stops. So, you know, we've been really smart along the way of continuing to build out the team and evolve the brand, but also not forget where we came from. So it's that whole crossroads of innovation versus tradition, and being true to our roots, but also then growing to be this, you know, much more sophisticated brands with a very fun personality. So, you know, as we grow, it's been really important to make sure that we have the right team here in place first at headquarters, because that really drives everything from a support standpoint. And then the other piece is to make sure we're partnering with the right franchisees because as you know, that can make or break your brand. So having the right team here having the right strategies that were focused on the right structure, and then the people piece from the headquarters part as well as the franchisees has been key to this point. And I think that that's obviously something that we have to continue to focus on.
Roger Hurni 8:35
Well, so the question is for me then next because you mentioned the franchisee, that seems to be the challenge, because you've got the operations, you've got this amazing product every time you bring a franchisee in, that one location could eventually pivot and you certainly don't want that. So what do you look for in a franchisee?
Betsy Hamm 8:58
Yeah, that's, you know, as growing up as a marketer, you know, if somebody would have painted this as a case study of like, we're gonna take your brand and you're gonna grow it and then you're gonna give it to everybody else to execute, you know, that's, it's very overwhelming feeling to have that loss of control. So, when we're looking at franchisees, you know, our franchisees have a very diverse background, most of them have not had food or franchising experience in their past. A lot of them were in business, whether they were in marketing or accounting, or maybe in health care. Some of them are teachers, we have a fair amount of military retired military people. So what we look for somebody who wants to take the initiative to own their own business and you know, sometimes there's, I think some balance between some franchisees will say, Well, I'm an entrepreneur that's why I want to own it. I own a franchise Well no, you're if you were an entrepreneur, you would open your own donut shop you know, you have Roger’s donuts, but what you are is a small business owner so as a small business owner, you have to take the initiative and the drive to grow your business. So we will give you all the tools and all the resources you need in order to succeed but it comes down to the franchisee actually executing so You know, looking for a franchisee who's driven, who can take the tools and resources, and execute is really important. And knowing that, you know, we have to have a consistent experience. And the one thing that we keep hitting home to our franchisees over and over is, we want McDonald's to be known for delivering a superior product with exceptional customer experience. So we know the product is amazing. And actually, we have a little bit more control over that. But we really need the franchisees to deliver on that customer experience that everybody has an exceptional experience when they walk into a Duck Donuts.
Roger Hurni 10:29
That's great. So there's hope for me. Basically, when I retire, I could become one of your franchisees. I could ride bikes all day and make donuts. I really,
Betsy Hamm 10:38
Yeah, I mean, for as long as you don't eat all your profits, it sounds like that might be an opportunity for you.
Roger Hurni 10:45
Everything in moderation, everything in moderation. You know, I have an article coming out soon in Forbes about, about how businesses need the recession proof themselves. And we might be going into that. Your category, like the pandemic, is comfort food, and it's this affordable luxury. So I feel like it's very recession proof from my experience. Was it the same in the pandemic that you didn't see a huge dip because of the way your model works?
Betsy Hamm 11:16
Yeah, and affordable luxury is a great way to position that because it is comforting. And you know, of course, in the very beginning of COVID, it was very tough, because you know, people grab Duck Donuts when they're out maybe running to the mall, or they're going to school or they're going to the office. So we're that really that kind of grabbing group girl mentality that was certainly lost, but people just weren't going out, especially at the very beginning of COVID. But that's where we really had the opportunity to buckle down. And what we have been using ever since COVID, is sprinkle happiness. So you know, it was hey, grab doughnuts and deliver them to your neighbors or drop them off at your friends. So we did see that we could really sustain our position and continue to grow our sales, despite the challenges, we just had to do it differently. So whether it was curbside pickup or doing community drop offs and neighborhoods, we just had to do business differently. But you know, people still loved their doughnuts. And it was about opportunity to put a little sunshine into everyone's day. And I think knock on wood. Hopefully we'll see that same response if if or when the recession does happen.
Roger Hurni 12:17
Yeah,well, I mean, they travel well, so picking them up and bringing them home. It's not like certain kinds of foods you order for takeout? They don't, right? 10 minutes later, like this isn't very good. Yeah, you're doing
Betsy Hamm 12:28
A little secret, you can put it in the microwave, if you my kids have become very spoiled that they always need their doughnuts warm. So heaven forbid, I bring them home to them. And you know, I have a 30 minute drive home or whatnot. And they're still even slightly warm there, put them in the microwave for a few seconds to get them as warm as they are when you get them in shop.
Roger Hurni 12:45
Alright. That's a good trade off for the affordable luxury and food pyramid ideas I gave you. It's just us you it's just you and I here, we're not going to tell anybody that. Well, in terms of marketing, your your business is primed for word of mouth. So I'm just going to take that conversation off the table, because clearly there's going to be a ton of that. What else are you doing to find ways to connect with customers?
Betsy Hamm 13:10
Yeah, so of course, our budgets are very small, but mighty. So really our biggest I think that for connecting with customers is on our franchisees actually to be involved in their local community. So you know, again, it goes back to us giving them the tools and resources for programs for catering. But we see our most successful franchisees are the ones that are involved in their local community and going out and getting those catering orders at offices or doing weddings, partnering with PTAs, at schools, in ties into really that word of mouth piece. But I think those who are involved and enable to get their roots in there, our shops are locally owned and operated for the most part. That's where we really see those sales drive.
Roger Hurni 13:48
Excellent. Well, I also know that I speak with a lot of, obviously a lot of CEOs CMOS in the in the restaurant space, several of them have mentioned their reliance on their mobile app. And beyond utilitarian, so yes, there's table stakes, right rewards ordering, you know, finding locations, that kind of stuff. But more and more, they're starting to dive into marketing automation programs, where they can personalize the communications experience on a one to one basis at scale, the way they personalize their operations. I know that you've got an app that I saw, looks fun. I mean, it just looks fun to go through. Are you doing anything along those lines? Or is that a goal to start to move the app in that direction? What are you doing there?
Betsy Hamm 14:35
Oh, interesting timing for sure on the app. So we launched the app in the loyalty program in January of 2020. So right before COVID. So really great timing on our part of getting that out. Just another way of being able to engage with our guests. So the last really, what are we going into year three of the app we've gotten better each year but that's our goal is make that more of a CRM. And you know, I I start With the app some time for someone like us, because our frequency is not incredibly high, as much as I would love to say, our frequency is people coming once a month, that's not the case currently. So to your point, how do we get that customer engagement? How do we give them offers based on their behavior versus just hey, we're pushing out this, you know, free latte on Mondays to everybody within the system. So that's something the marketing team is actually working on right now like is the app the best vehicle for that is or some other CRM, our email program is incredibly strong, and our online sales are incredibly strong. While the app is great, it's very hard to customize donuts and an app because again, it goes back to that customization piece and picking the coating and the topping and the drizzle. So it takes more time. So you know, working through that from a customer experience standpoint of how people are ordering, but then also how are we going to drive that frequency and have that more one on one relationship with our customers versus just pushing out these mass offerings. So that's all things that we're working on that hopefully, we'll have a really good game plan for that and be able to execute on that in the next couple of months.
Roger Hurni 15:58
So this is probably premature as well. I mean, everything in the last month and a half has been chat GPT and brain and like, are you incorporating AI into the app or in any other your marketing?
Betsy Hamm 16:11
I would love to say yes, I think we're not there. I think we I think we have like a few more steps before we can get to the AI piece. I think if we can if we need to start with looking at what people's behaviors are and what they're buying, and try to tap into that first on like a very basic level, I guess you could say, but I mean, that ultimately would be the goal, of course.
Roger Hurni 16:31
Excellent, excellent. Well, franchise seem like they're going great store sales. As far as franchisee sales go, you're on an hockey stick trajectory. I will, I will forego, like going public and doing those kinds of things. It's really great growth. What's the what's the biggest challenge you're facing now? Like what's keeping you up at night?
Betsy Hamm 16:53
Our biggest challenge is getting shops open. So that was the biggest challenge of 2022. Selling to your point has, has not I don't want to say been easy. But it's been it's not been difficult, we're able to there's a ton of interest in the brand, we're able to continue to sell and see the great development numbers, the last nine or 12 months has been getting them open, you know, the beginning of 2022, it was delays because of supply chain or equipment not being available, or them just not having workers to go out and build the shops. At the end of 22, we were running into more permitting issues and permits taking forever. So our length of time from when a franchise agreement is signed to when the doors open is way too long. So we're really working on how do we get back to six months, essentially. Because it's that time period is too long, we would love to be able to sell a shop and open it in less than a year. And we got some months to cut off. So there's a lot that's in our control. And then there's a lot that's not in our control, like permits, for example. So just trying to be able to control and impact that as much as we can. That's really going to be you know, what makes or breaks us again, and 23 is being able to get shops open quicker.
Roger Hurni 18:00
Well, what's the other side of that coin, then? What's the thing you're most excited about? That's your biggest worry.
Betsy Hamm 18:06
Um, you know, I think we have done, we've evolved and grown a lot as a as a team and as a brand over the last year, and we had a lot of new team members and new positions. Because of that growth last year. And we did we had a really good 22. But I think 23 is our year where everything's firing on all cylinders. And we're really able to make an impact. Because as much as we want to open shops, that's awesome. And of course, it's how we're going to grow the brand, equally as important as getting our sales up at all of our existing shops. So you know, wanting to see a nice significant increase in not just sales, but in transactions. And again, I mentioned frequency is a struggle for us. So how do we continue to grow that frequency number throughout the year? So we've been testing some stuff at the end of last year this year from marketing, you know, promotions LTO is offers that we're seeing some good results on. So I think as we continue to fine tune those programs that really drive sales. It's exciting.
Roger Hurni 18:59
Excellent. Wow. All right. I love it. Here's my you've been great with your time. I have just one last question. Here we go. We show this way. Oh, I'm a little scared. What's the worst advice you have ever gotten? Oh, gosh, everyone always says the best advice so I just I just take the other side of that.
Betsy Hamm 19:22
You know, there's been a lot of that through years I think I think one thing that sticks out to me this was probably young in in my career but I had a boss who thought that like the longer you work like the better it would be so you know a ton of hours like sitting at this you know, back in the day we just sat at your desk you didn't work from home, but like that was working hard and it wasn't really working smart or working efficiently. So I think you know having a boss say like you need to be here all the time. You need to be working all the time. Like was such bad advice because when I look back at what kind of role he did he I don't think he was very productive or very efficient. So you know, it's not about the hours you're putting in it's about how efficient you are when you when you are working in what you You're focused on versus just the busy work. So it's someone telling me that like, early in my career, I was like, I need to be here all the time sit at my desk. It's kind of like I'm really busy. And it really was just not a good use of my time, or the best approach probably to growing professionally.
Roger Hurni 20:15
Well, I mean, that's a lesson for everybody that the whole idea of working a lot of hours came through the industrial age, when like you're producing something. So if you literally weren't working, nothing was getting produced. Now, you know, you can sit around and have a conversation over dinner and start a business. And that's not a lot of hours. That's just, I mean, there's always a lot of hours. Don't get me wrong, but isn't is it's not. It's just not putting in time for time sake, and it's using your time and the best and highest use of it. And that's super smart. Okay, see, that wasn't such a bad question. Right.
Betsy Hamm 20:52
Now. I'm gonna think about this for the rest of the day. I might have to like email you a couple other really horrible advices I've gotten.
Roger Hurni 20:58
I'm just I'm just wasn't, Oh, yeah. My best friend. Don't take the CEO job.
Betsy Hamm 21:07
Luckily, no one ever told me not to come here. So that was good news.
Roger Hurni 21:12
Well, you have been gracious with your time and I really appreciate it. I had been speaking with Betsy Hamm, the CEO at Duck Donuts. Betsy, where can people learn more about you and Duck Donuts?
Betsy Hamm 21:23
Yeah, check us out at duckdonuts.com For our website and be happy. I'm happy to look me up on LinkedIn, at Betsy Hamm.
Roger Hurni 21:30
Excellent. Excellent. Thank you again very much. I'm Roger Hurni. And this is From Persona to Personal and we'll catch you next time.
Outro 21:39
Thanks for listening to From Persona to Personal, the podcast that takes a closer look into how organizations personalize their marketing. We'll see you again next time and be sure to click Subscribe to get future episodes.
