Danny Meyer to 'Treps: Put Your Employees First, Customers Will Follow
BY Carolyn Cutrone
The founder debunked the myth of "the customer is always right" at Inc.'s latest Business Owners Council event last night in New York City.
Danny Meyer isn't usually late for anything--let alone a speaking engagement before a room full of entrepreneurs. But he had a good reason: It's bone-chillingly cold in New York City and the famed restaurateur behind restaurants like Gramercy Tavern, Union Square Cafe and Shake Shack wanted to give his employees a hug.
Before making his way to the Flatiron Hotel, the scene of Inc.'s latest Business Owners Council event, a series that brings top performing entrepreneurs together to advise each other, he made a pit stop at the nearby Shake Shack, which is an outdoor café in the middle of Madison Square Park. "I just stopped at Shake Shack because those guys are out there in the freezing cold tonight and I made it a point to say 'thank you' to every single one of them and let them know that I realize it's going to be really cold and I appreciate what they're doing," he says.
This extra effort from the CEO of Union Square Hospitality Group, a restaurant holding company with several eateries and fine-dining establishments under its purview, is central to Meyer's business philosophy: Put employees first. "Giving them that quick hug which didn't take that long-- three minutes--is going to somehow be felt by someone at the company, I know it."
Contrary to the popular mantra "the customer is always right," Meyer says the best way to ensure a great customer experience is to put your employees first. After all, he adds, there's no other way employees could outperform in front of customers if they don't feel good about themselves. And if that doesn't happen, how can your business outperform before your investors? "That's how I came up with this counterintuitive prioritization," Meyer says.
By the end of his talk, entrepreneurs and small business owners were both inspired and frustrated by Meyer's advice. One audience member, Timothy Askew, CEO of Corporate Rain, a sales and outsourcing service, couldn't fathom how to teach something you might not be in tune with yourself. He asked, "How do you teach empathy?"
Another attendee, Thomas McVey, CEO of re:think a website design and SEO company, noted the need to make changes at his company. There is no way you can make employees feel good about apologizing to a customer if they were right. "No one wants to be made wrong," he says, in reference to his employees. "We need to back our people more."
Though Meyer's "Golden Rule" business strategy might be unconventional, he's proven its efficacy time and time again. To learn how you can use it to improve your company, here are three takeaways from Meyer's talk:
1. If you don't do thoughtful things, your service doesn't matter.
Meyer says that you can split business up into two measurements. Forty nine percent of customer experience comes down to food, which is more or less service. That means giving the right meal to the right customer, making sure it's the right temperature, and giving a customer's coat back quickly and correctly at the end of the night. But the other 51 percent is made up of thoughtful things you do. So while you must get the service right first and foremost, (let's face it, the food has to be good) Meyer explains it's not enough. It has to be a combination of both great service and acts of thoughtfulness.
2. Prioritize carefully based on who really matters and needs the best care.
Meyer told the group of entrepreneurs they all have about the same five stakeholders. They are customers, the community, your team, investors and suppliers. He adds that the way you prioritize them will determine your desired outcome. His priorities? 1) Employees 2) Customers 3) Community 4) Suppliers 5) Investors.
3. Distinguish your company by how you make people feel.
Since everything today has been commoditized, even if you come up with the best idea in the world, someone can copy it overnight. Meyer says he used to be able to get a two-year run from a menu idea, but today, if it's really good, someone can take a picture of it and put it on their menu tomorrow. Since ideas don't matter quite as much as they used to, Meyer recommends making an amazing difference between your business and the nearest competitor. And that, he says, "all has to do with how you make people feel."