QSR Interview | By Lisa Fey
MASON: It’s also really important to think through all the conflicts that you’re going to have where you might have a disgruntled customer that comes in. In a large metropolitan area there’s always professionals who try to create a scene to get free food. And there’s other odd things that happen in the restaurant industry that people aren’t familiar with. So just being prepared for that so that people understand that, “Hey this might happen, and here’s how we’ll handle it.”
You can try to hire the best people and make the best food, but issues happen. What direction would you give other operators about how to handle those situations?
MASON: Set up your phone system so you know who’s taking the order at what times because customers might try to claim other things happened. The way to deal with it is not to be confrontational. Just say, “I understand what you’re saying, but it doesn’t match up with what we’re doing here.” Try to keep it at a level that makes sense,
Then also know when to pull your release valves. If someone’s going to stand in your store and scream or cause problems, be prepared for that. Typically you want your manager to step in quickly. They’re more adept at handling that than hourly employees.
CROSBY: We take a very regimented, but somewhat different approach. What we found that works the best for us and in the markets in which we’re growing and competing is we actively train every employee how to handle any situation. The manager’s not supposed to step in unless it just really gets out of hand. We train people in how to be the company representative and we give each employee the right to make it right for the customer. We want them to be the customer’s advocate. We focus them on the lifetime value of that customer.
We currently estimate, looking at the age and the lifespan of people wanting to eat a hamburger, that each customer is worth about $33,000 to us. So we’re making a decision to create loyalty with that customer to keep them coming back so that we get the entire lifetime revenue stream from the customers. We’ve empowered any employee that’s on the frontline. If you see them, talk to them. They can listen to and solve your problem. They make commitments for the brand. They can give money back. They can take your product back. Whatever it takes we’re going to make it right for you.
Now if they see the repeat offenders, someone trying to abuse the system, then the employee says, “Well, let’s put this into the system, notify management, and management will fire the customer.” We do have that step in place if we have to use it.
We don’t do coupons, but if they’ve got a coupon for Five Guys or anybody, we’ll say, “Fine, here’s what our menu items are. How do you want us to use that coupon?” One, we get a competitor’s coupon out of the marketplace, and we’ve got them thinking about us. We build this reputation of being easy to deal with.
ANDREW: Our strategy is real simple: We just kill them with kindness. If somebody tells us they thought something should’ve tasted different, we’re right away asking them, “Would you like to have that made over again?”
If you do find somebody who is a repeat offender like we just talked about, I think that’s absolutely appropriate to fire your customers. We’ve been fortunate we haven’t had to do that yet. More times than not we’ve been successful turning around a negative situation into a positive situation.
According to some of the latest research, customers are going to outlets where they perceive there is a deal or some type of discounting. How are you addressing demand for a deal or value?
ANDREW: When we were building the model, we realized that, especially with the economic conditions, every day value is critical. We really ingrained it into the DNA of the brand. We sell pizzas, subs, and salads for $6.50. We think we’ve got a great value proposition. When you add the drink on there, you’re still in the $8 range.
What we didn’t want to do was be like a lot of pizza chains, especially the big three delivery guys. I don’t think they’ve ever sold a pizza at their retail rate. I couldn’t even tell you what their prices are because they’re so heavily dependent upon the coupon strategy. We wanted to be everything opposite of that.
We don’t want to discount our product. It’s already value-priced so we don’t have to set a price and then sell it for 50 percent less than that to get your attention. The big chains have gotten a lot of customers hooked on coupon strategies. But when we look at the brands that we want to emulate long-term in the marketplace, a coupon hasn’t been a big part of their strategies.
MASON: We follow the same thing; we don’t coupon. Our food is priced at a value. We have a core following. About 10–15 percent of our customers are people who used to live in Chicago. They’re our hardcore ambassadors. They eat with us if not once a week, twice a week. And they tell everybody about us so we have to retain our quality and make sure that we are a good value and a good experience. We are a fast-casual so people come to the counter to order and then they go sit down. What we’re seeing is people are coming in to our place on a Friday night instead of going out to a nicer restaurant.