Danny Meyer, CEO and founder of Union Square Hospitality Group, believes providing good service is only the starting point to delivering on customers' expectations. Instead, hospitality, which involves connecting with consumers at an emotional level, is where retailers should be looking to tap the "most powerful differentiator" for their business.
Mr. Meyer, who owns 25 restaurants in New York City ranging from Union Square Café and Gramercy Tavern to Blue Smoke and Shake Shack, spoke Tuesday at the ARIL Customer Service Awards luncheon at the NRF convention. He is also the author of the best-seller, "Setting the Table."
If a dining or shopping experience was graded on a 100-point scale, only 49 points would relate to service or performance, with the remainder tied to hospitality, contends Mr. Meyer.
Good service — roughly defined as providing a quality product and delivering it efficiently — is now largely expected across businesses, especially with blogs and websites like Trip Advisor and Yelp spelling out shortcomings. He also noted that the "shelf life of a good idea" has evaporated with the word-of-mouth capabilities of the internet.
With the challenges of differentiating around quality and service, Mr. Meyer said that retailers must increasingly endeavor to create "an experience where people feel like if they don't come to our place of business, they're missing out on life's great experiences."
That's where hospitality comes in. He said hospitality "is about the experience on the part of the person receiving your performance whereby at the end of receiving your performance, they are made to feel that you are on their side."
At his restaurants, hospitality comes from the servers that command a high HQ (hospitality quotient). A high-HQ person "is at their happiest when they're making someone else feel good." They have an innate ability to make others feel comfortable and particularly "know when I want them and they know when I don't want them."
He urged retailers to similarly focus on hiring high-HQ staffs and then "unleashing their personality" at the store level. While competitors can replicate many of the service aspects of the business, "no one on earth can take out their iPhone and take a picture and copy that feeling."
Adds Meyer, "It doesn't cost more money to look somebody in the eye and smile and ultimately it doesn't cost more money to hire people who care deeply about how they treat each other."