Grow Customer Loyalty

During my many years in the Navy, I learned that if you take care of your people, your people will take care of you.  Business Week recently profiled In-N-Out Burger — a business that been very successful in building Word of Mouth, in  part by valuing employees.  These loyal employees create loyal customers.

Business Week recently published an article by Stacy Perman, with an excerpt from her new book, In-N-Out Burger: A Behind-the-Counter Look at the Fast-Food Chain That Breaks All the Rules.  Founded in 1948, In-N-Out Burger has remained a private, family-owned company that beats Burger King and McDonald’s on per store sales despite virtually no advertising.  The company relies on word of mouth driven by the quality of the food and staff at each of its restaurants.

According to the article, the founder’s son, Rich Snyder, shared his father’s belief that running a successful fast-food business was more about the people running the stores than cutting corners or using high-efficiency equipment.  In 1984, he started In-N-Out University to fill the staffing pipeline with quality managers.  About 80% of the Company’s managers start at the bottom, picking up trash, and they have to work full-time at an In-N-Out store for a year before attending the University.  The Company’s growth strategy is to expand only as fast as it can grow the qualified management to staff new stores.

According to the Business Week article, Rich once sought the advice of a food industry consultant who advised that the Company could save a ton of money by slashing salaries.  Rich ignored the advice and he continues to pay his associates at least $2 to $3 above minimum wage.  Store managers make at least $100,000 and are eligible for bonuses tied to store sales.  Rich also provides an expensive set of benefits including companywide picnics and trips to Europe for store managers who meet their goals.

Because they are treated well, In-N-Out employees have one of the lowest turnover rates in the industry.  A manager’s typical tenure is 14 years and even part-time associates stay for an average of two years.  This cuts the problems associated with always training new staff and it increases the quality of the food and service provided to the customers.

Because the food and service are so consistently good, its customers spread the message.  They wear the Company’s T-shirts, they put the Company’s bumper stickers on their cars, and some of them are evangelists, bringing in friends for something they call the “conversion.”  The In-N-Out website allows fans to plot the locations of convenient In-N-Out stores before leaving on a trip.

You can do the same thing for your business.  Train your employees, reward your employees for great performance, encourage their ideas for improvement and innovation, and pay to retain the best of your staff, and you will benefit from their efforts to grow the ranks of your loyal customers and build Web and traditional Word of Mouth.

If you need some help in building a work force that builds customer loyalty and drives word of mouth for your business, please contact us at 281-343-3284.