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Operations | By Dale Buss

The Morale Boost
Better customer service starts with happier, more accountable employees.
Service issues are the number one complaint of diners.

Money is tighter. Consumers are crabbier. So are many employees. But some executives say the recession has made it even more important for chains to leverage better service into happier patrons.

“Customers have limited funds these days and use more discretion with them,” says Tom Coba, Subway’s chief operating officer. “Their expectation is that they’re going to get good service, or they’ll go somewhere else.”

Indeed, consumers are still looking more critically at service than anything else in a restaurant. Service continued to be the main complaint of 68 percent of diners surveyed by Zagat in October 2009, with all other areas of potential griping—crowding, noise, prices, poor food, and traffic and parking problems—representing only 30 percent of the top complaints.

A variety of efforts have been put into place to boost employee morale in hopes that it turns into positive customer-service returns.

McDonald’s is taking a stab at increasing both employee morale and customer engagement at the same time. It is holding its third Voice of McDonald’s competition, an “American Idol”­–style karaoke contest for employees that is being integrated with McDonald’s social media and will culminate in a $25,000 grand prize for the winner and a headline performance at the chain’s global conference in April. McDonald’s franchisees reportedly love what the contest does for employee satisfaction, and their enthusiasm spills over into customer engagement.

While karaoke isn’t the answer for every brand, building a strong culture that can withstand economic doldrums is crucial. “It’s not enough, but that’s where it all starts, like the roots of a tree,” says Jon Gordon, a consultant and author on workplace culture and a former quick-serve franchise owner. He says the best practitioners recognize that improved employee satisfaction and customer satisfaction typically go hand in hand.

Gold Star Chili, for example, just launched a new store-level recognition program called the Gold Standard, which emphasizes quality of customer interaction, cleanliness, and other criteria that “raise the bar in the service area,” says Mike Mason, operations director for the Cincinnati-based fast-casual chain.

It’s a different way of encouraging managers and employees to think of coming to the restaurant as coming to ‘My Wendy’s.’ ”

Up I-71 in Columbus, Ohio, Wendy’s management is including prize incentives for employees and franchisees in a new customer-service program that it is testing in a handful of stores in North America. It scores the outlets based on results gathered from customer comments to call centers and online.

“It’s a different way of encouraging managers and employees to think of coming to the restaurant as coming to ‘My Wendy’s,’ and increasing their pride and ownership of it,” says Kitty Munger, Wendy’s director of communications.

Also encouraging ownership of customer engagement, Boloco requires employees responding to consumer complaints by e-mail to copy all their colleagues at headquarters on the responses.

“It keeps them really accountable because what went wrong is right in front of everybody and so is the response,” says John Pepper, CEO and co-founder of the Boston-based burrito chain. “If the response carries a tone it shouldn’t, it sticks out like a sore thumb. I don’t even have to get involved; it takes care of itself.”

Pepper has tried to exemplify Boloco’s responsiveness standard. Recently, for example, a customer complained through Twitter that the music at one store was too loud. “I just called the store to turn it down and Twittered back to the customer, ‘Done,’” Pepper says. “That caused all sorts of positive commotion over something so simple.”

A philosophy of “the customer is always right” also reigns at Conshohocken, Pennsylvania–based Saladworks. “The customer who comes to you with an issue is the one you have to take care of,” says Paul Steck, president of Saladworks. “So if someone gets the wrong item in a drive thru, it’s not about replacing it—it’s about replacing it and then buying their next meal because you’ve already inconvenienced them.”

In fact, Saladworks employees are all equipped with free-meal “recovery cards” that they’re encouraged to use with miffed customers as they see fit. And what’s more, the 100-store chain borrowed a tip from corporate neighbor Commerce Bank: It takes two people to say “no” to a customer request and only one to say “yes” to something reasonable.

CKE has invested $3 million in a new Web-based training program that it has rolled out to all its corporate Carl’s Jr. and Hardee’s stores and that is available to franchisees as well. It has all the interactive bells and whistles and allows chain management to track carefully the progress of every front-line employee and manager through the required modules.

“We’re already seeing reduced turnover beyond the norm—even in this economy—because of it and better execution of guest service in the restaurants,” says Noah Griggs, executive vice president of training for CKE.

Similarly, the University of Subway is an online training program that is available in seven languages for the chain’s employees around the world. Franchisees can offer incentives such as pay raises or bonuses for course completions.

When it comes to motivating employees who are trying to make their own way through a rough economy, however, cash is still king. Boloco’s executive team tries to link the importance of customer satisfaction and great customer experiences with profit-sharing, “by just always talking about it,” says CEO Pepper.