June 20, 2013
BrainTrust Query: When You Think Fast Food Retailer, Do You Think ‘Customer Centric’?
We are in the age of the customer, when understanding what your loyal customers need is paramount to long-term loyalty and financial growth. But how do you know where to start? Where do you focus, considering that the customer is now exceptionally savvy, seeks product knowledge across multiple channels, and comes with higher expectations than ever?
For food service retailers, this is an even tougher battle to tackle. In an industry that sees high levels of employee turnover, it can be difficult to create a workforce that is customer-focused without constant employee training. Additionally, the franchise model complicates the ability to provide a consistent experience across all outlets. Finally, customer behavior is constantly changing. It is critical for food service retailers to have the flexibility to adjust their processes to meet changing needs — and to be able to translate those changes to the customer.
Almost every company wants to reach their customers, and most claim to focus on customers in the decisions they make. But are they strategically aligning who they want to be as an organization with what their customers need? And even more important, are customers taking note?
The dunnhumby Customer Centricity Index (CCI) is a comprehensive research study that measures how customers feel retailers are meeting their needs. Scoring retailers on each of our "Seven Pillars of Customer Centricity" illustrates how customers perceive their total customer experience — from their assortment of products, to how feedback is applied to operations, to how customers feel about the pricing on the items that they purchase most often.
In dunnhumby’s first CCI report, focusing on food service retail, fast food retailers scored significantly lower across most of the Seven Pillars and on their overall customer centricity scores than fast casual and casual dining. In fact, dunnhumby found that there was little differentiation in the CCI scores among fast food retailers, indicating that there is currently high switching and low loyalty within the fast food sector. With the scale and reach of fast food retailers like McDonald’s and others, there could be a huge opportunity to drive loyalty and define what this space could look like for fast food retailers.
Discussion Questions
What steps can fast food retailers take to be seen as “customer centric” by their current customers? Can you cite any fast food operators that you would classify as being customer centric? Are there practices that fast food retailers can borrow from traditional retail or other sectors of food service?
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I’m not sure that being customer centric is even important to fast food retailers. Certainly you don’t want a bad environment, but my expectations are pretty low when I go to Wendy’s or Burger King. I’m expecting clean, edible, consistent quality—maybe their 7 pillars aren’t as relevant to this industry.
Fast food operators in general bought into the trap that it’s all about speed and accuracy. As I found in this interview with a successful franchisee, success in fast food franchising is still about people. It’s no different for most retailers from Sears to Nordstrom—how can an encounter with your employees be more human?
Quick service restaurants, as they prefer to be called, could learn a lot from traditional retail, such as loyalty and loyalty cards, or smartphone apps. Starbucks seem to be ahead of the curve, but if the others wish to get on board, they should start now. A loyalty card that keeps track of my favorite menu items, so that no matter where I travel, once in the store they know me and what I like…plus points to get free stuff would be nice too. Panera Bread has a pretty good handle on that, as does Dunkin’ Donuts.
Fast food retailers need to create an employee culture of involvement in which the staff see themselves as more than taking and filling orders. Probably the best fast food customer experience comes from In-N-Out Burger. In-N-Out Burger has created a culture of employee involvement and engagement with the customer. In addition, it does not pay new employees minimum wage as most fast food retailers do. Instead, it starts employees at $10.50 per hour, provides scheduling flexibility to accommodate school and family needs and claims that “All of our managerial personnel is developed and promoted from our hourly Associate levels.”
If you are not going to invest in people then you will need to invest in technology to minimize the human contact, e.g., ordering and payment kiosks, and smartphone ordering apps.
Although I agree with Stephen’s comment that perhaps it’s not critical among fast food operations, it’s still important to have the customer walk away with a positive experience, even though the expectations are low. Is it asking too much for the counter person to at least enunciate their words enough so that they can be understood? Half the time, the counter person is so un-motivated that they mumble. How about prizes or cash bonuses each week for the employee that is most enthusiastic and cheerful with the customer?
Simple answer: become employee centric. Your employees treat your customers the same way you treat your employees. Your actions speak louder than your words.
The first step is to hire the right person.
Fast food retailers typically hire young employees and don’t pay much over minimum wage. Many times there is very little requirement other than someone willing to show up on time. Unfortunately, that’s not the best way to hire. Young is fine. Even low-pay might be fine for entry level. (I won’t get into that here.) However, the employee has to be more than just willing to show up on time.
I look at amazing companies like In-N-Out Burger, who deliver amazing service. They have a good hiring process that gets great employees. They have a very generous/competitive wage they pay. They train, train and train. They work to create employees that can be promoted into higher levels. They motivate with great mangers and work as a team.
Many of my clients in the fast food industry work to differentiate themselves with customer service. Lenny’s, for example, sells personality. When you walk in to the restaurant, you are greeted and the employees engage with the customer. They take the order with “personality.”
Pita Pit does a lot of training that is very customer focused. With all of the places a customer can go for a meal, they want to be more than just a place that sells good food. They want the experience to be good as well.
The bottom line is that one thing takes the customer’s experience to a higher level, and that is when the employee has a positive interaction (engaging) with the customer. The customer, who typically deals with just one employee during the experience, will walk away and say, “I like eating there. THEY are so friendly.” It typically wasn’t a group of people, but one person who represented the brand and all of the employees.
So, hire the right people, with engaging personalities and train them to work the system. That’s what the best fast food retailers (and many other retailers in other industries) do.
Haven’t we been trained over the years to expect little more than some eye contact, maybe a smile and our order which at one time was inexpensive?
The key to fast food success is a constant stream of new products. Of course, other elements such as quality, price, consistency, and service play important roles. But the most important element in fast food marketing is new products.
That’s why dunnhumby’s Customer Centricity Index that measures “Seven Pillars of Customer Centricity” among fast food companies showed a dead heat. They measured six “pillars” too many. For fast food, I’d recommend concentrating on just one “pillar,” which dunnhumby calls “assortment of products.”
While the issue of being customer-centric and standards-compliant is not limited to quick service restaurants, it certainly is a critical issue in this category. Food preparation is unforgiving and following standards is a matter of health and safety.
Being customer-centric also means that your service standards are upheld every time and everywhere. Different franchisees tend to execute differently and there is a big risk in a franchise-environment to have the brand tarnished by one sloppy operator. Customers don’t know, and don’t care, whose name is on the franchise agreement. They expect all “Brand X” restaurants to be clean and friendly and in this age of social media, brands need to deliver.
EVERY SINGLE successful quick service restaurant chain and multi-unit retailer now has a retail audit program in place. You need to train on the one hand and audit and coach on the other.
Being customer-centric does not happen in vacuum and it doesn’t happen by chance. You need to set the standards, communicate the standards, audit the execution of store standards and address deficiencies when they are found. And guess what? There is software that does precisely this. It’s called retail audit software and you should not operate a multi-unit retail business without it.
Whether it is writing your name on the coffee cup at Starbucks or being greeted with “Welcome to Moe’s” at Moe’s Southwest Grill, upon entering a fast food establishment, customers do need to feel a personal connection and that they are not just another sale. Creating these one-to-one engagements helps puts the focus on the consumer and leads to brand loyalty and ultimately financial growth.
Fast food retailers can learn from the leaders in this survey. Chick-fil-A and Panera have shown strong results and staying power amongst a very crowded segment. Visit their locations and you’ll learn that their “secrets” to success are not really secrets at all. Here are my top three observations as a loyal customer of each:
Simple strategies to write, but tough to implement in companies that are short term focused, cost centric, and where strategy is one year versus ten.
It’s funny to me in that everything you’d want to know about doing fast food right is on just about every street corner: Starbucks or Chipotle.
For starters; associates that like people and enjoy engaging with them—everything else is downhill.
I agree with what folks have cited as favorites.
To answer your question relating to retail practices, I believe it might be helpful to include a focus on franchise retailers (to match models with models). I think that includes Ace Hardware and RadioShack.
I did some observational research for one of the pioneers in the healthy quick serve space—that meant intercepts—the insights were obvious and important but the culture was focused more on selling franchises and not messing with the template.
Philz coffee here in CA does a nice job as well BTW, also, come to think of it, most NYC mom and pops who are the masters for flow, quality and empathy. The customer/restaurant relationship in NYC is special however because New Yorkers are instinctively connected to flow and that plays well into the quick serve dynamic.