We talked with Reed Daniels of Red’s Savoy Pizza and Arjun Sen of ZenMango about how they are able to identify friction points in the customer journey and optimize their customer experience. Watch the entire webinar below, or if you prefer reading, you can find the full transcript available as well.
Webinar Transcript
Brad: “Hi, thank you for joining us today for the webinar, How to Improve Your Customer Experience by Shifting Focus. My name is Brad Brooks, and I'm with SpeedLine Solutions, a leading pizza and delivery point of sale developer. I'm really excited about today's webinar and I'm delighted to have two funny, engaging, and extremely knowledgeable guests with me today. Todd Vierra from Spinato's Pizza was planned to join us, but unfortunately will not be there. He was called away unexpectedly, but he was gracious enough to provide some questions and we're going to work those into our conversation today.”
“Reed Daniels is the owner and CEO of Red’s Savoy Pizza. He has 18 locations and it's headquartered in Minneapolis, Minnesota. Over the past eight years, he's seen his sales double as a result of the customer experience and customer engagement programs that he's putting into place. Arjun Sen is the president and CEO of Zen Mango, a marketing consulting firm. He works with restaurants, retail firms, service brands, and charities, along with nonprofits and academic institutions. He was previously with Pizza Hut, Boston Market, Einstein Brothers, and his most recent corporate gig was with Papa John's International as vice-president of marketing and operations services that led the chain to four years of record-breaking growth. He's also the author of the book Customer Karma: Why Stop at a One Night Stand When You Can Have a Lifetime Relationship With Your Customers?”
“Be sure to stay with us for details about a giveaway that we'll talk about a little later on. Reed and Arjun, welcome, and thank you for carving out some time in your busy schedules to be with us today.”
Reed: “Glad to.”
Arjun: “Glad to.”
Brad: “All right, let's jump right into this. Arjun, I'd love it if you could tell me a little bit about the difference between customer experience and customer service. What does that look like in your mind?”
Arjun: “So to me, customer service is literally a checklist of things that we think we want to do in our restaurant, but the end experience is what a guest or a customer feels. So if we do all the checklists, but if it doesn't connect, what's the point of doing it? And that's the reason I really think putting this question out there makes everybody right away realize to look from the perspective of the guest and see how what we do lands literally in their heart.”
Brad: “Interesting. So Reed, in your locations with your chain, what does that look like in practicality? How do you apply that type of principle?”
Reed: “One of the things, and don't trademark this before I do Arjun, but what we talked about is like running for pizza mayor. We want all of our franchisees and all of our owners of all locations to run for mayor of their community in the pizza category. So one of the things is like we want them to be out and about in their community and know what their customers are like. At the location that's pictured in the background here, we know that Ruth and Jim come in on Sunday nights for pepperoni pizza. When they walk through the door, they're greeted with a name and an interaction that the regular customers don’t get. Removing those questions to make them feel like not a number.”
“And then additionally is when it comes to the data piece of it is, using our rewards program to thank them for choosing us. Our program is called thank you rewards. And being able to highlight guests that haven't been in a while or guests that come in regularly, VIP guests, that we can actually build those relationships a little bit stronger. So they have a feeling tied to the brand versus just a commodity.”
Brad: “Excellent. Arjun, you talked about customer karma, or good karma. Define what that means in terms of how you see it.”
Arjun: “I was fortunate to grow up in India with my grandma, and she always instilled that the word karma means action. Anytime you want the result, in this case, the relationship is what we want. Good karma is the action that we put in consistently, which means for any pizza chain or any restaurant, it's very important for us to look at what every customer gets every time and what we are doing about it. And the result of that is the relationship. And if you look at a relationship, many a time, we need to see both from a brand promise and the value. And if you are selling a pizza, let's say the average ticket is $20, which is $40 a month, now that customer spends on an average $500 a year, which is nearly $5,000 over a 10 year period.”
“Which means when you look at the customer every time, see the customer as a $5,000 customer, and the relationship you want will come from the customer. And Reed, I have to compete with you because I love that run for the mayor because when you run for the mayor and you become the mayor, the search stops there. When the search stops, that means you are in a relationship. So karma is the path, experience is what they feel, and relationship is the end result.”
Reed: “I'm going to hop right onto that. I apologize for interrupting, Brad.”
Brad: “Oh, go ahead.”
Reed: “There's a term called the ZMOT, zero moment of truth. There's an article, I think it's done by Google, and it talks about the moment of truth was traditionally in like the sixties and seventies, when housewives would go down the aisle and search for dish soap or whatever they were buying at the time. And you picture all of the wall of cereal, for example, that you have in front of you, but the zero moment of truth is that relationship through marketing or through other relationships or past experience that when they go to that aisle, they're not thinking about, ‘Do I get Tide or Downy?’ They are like, ‘I have a Tide family. No matter what I'm buying Tide, no matter what, because of the relationship, and I know they're going to take care of me and my family’.”
“You translate that to pizza. You translate that to autobody. You translate that to whatever. It's giving a damn, and knowing that they have your back, or you have their back as a family, providing them a service, and they'll stick with you forever. That's what relationship with that karma is that Arjun's done so well with over his career.”
Brad: “That's great. Thanks for that, Reed. Arjun, in your book, you talk about this concept of butterflies and terminators. Just explain to us what that means and how it helps us to understand customers.”
Arjun: “In any relationship, you have to start by getting to know each other. Which means, we as operators, we really need to get to know the customer. It's not about just demographics. It's also about situational, which means Brad, you as a customer, if you came to my pizza store, there are days you're a butterfly. Butterfly means that day, you have a lot of time. You can ask questions about my nonprofits, where my tomato sauce comes from, all those. You also want to know about our daily specials and what's coming next.”
“Terminator is the day you come in, literally you want your order, just eye contact and a smile, take and run, because maybe you're in a conference call. And for us, we really need to be present to understand guests and see how they are different on different dates. Which means, you have to keep a highway for each one. It could be even from an ordering point of view, on your online ordering, you may need to have this. They want to order the last order within a few seconds, versus there are days they want to really get to know about new items, new things on the menu, a little bit more. So that's the whole balance. But in a way, being present and being mini micro shrinks is very important to get to know the customer and start the relationship.”
Brad: “So Reed, how do you take something like what Arjun just said and teach somebody who's on the frontline for the very first time, maybe it's their first customer service job? How do you teach them to read those signals so that they treat people appropriately?”
Reed: “When it comes to that Terminator piece of it, we talk a lot about, wanting to have a great level, or a consistent level of service and not be a computer, right? Not be that. And so one of the things that we rolled out recently was when someone walks in or someone calls on the phone, you say, ‘Where are you? Who are you? How are you?’ So, ‘Thank you for calling Red’s Savoy Pizza, Udina, this is Reed. How are you today?’”
“And so you have the first few times we do it, people are like, ‘Why is a pizza place asking me how I am like that?’ That's just usually for a takeout or delivery. Sometimes, our name is Red Savoy Pizza. Sometimes it's Savoy. Sometimes it's Red’s Pizza. Red’s Savoy, Red’s.
“No, it’s ‘Thank you for calling this one, this location’. They also could have some customer service problems if they go to the wrong location. But then stopping and being able to connect with that guest and say, ‘How are you?’ and giving a damn about the person that is choosing you tonight. What if they are, "We have to go to a funeral. My dad died and I got to feed my family"? What an opportunity for us to know what's going on in our customer's lives and do something about it. It’s taking the time to actually connect versus be a transaction. That's what we're working on.”
Brad: “I love it when people answer the question that's on the next slide, which is about first impressions. Walk through those steps again. I want you to just walk through those steps again that you have in terms of the four things that you ask. What were they again?”
Reed: “Well, it's just, ‘ Where are you?’ It's our internal thing. You say ‘Where you are, who you are, how are you?’ So, ‘Where are you?’ as like the actual Red’s Savoy and the location name. So we have some stores that are close, and based on where you are on pinging on your phone, you might be closer to one location, but you're going to drive to the other location. So it's really important for us to say, this is at Edena Prairie. We have people that will order from one location and then go to the other one because they called the wrong one. That's a customer disappointment.”
“And then saying ‘I am Reed’, and knowing that there's a person on the other line that's taking your order. Also, if there's a problem, we know where the buck stops. And then the, ‘How are you?’ is the piece where it's like actually reaching out and saying, ‘Hey, we're all humans in this world together. We all put our pants on the same way every morning’. I am wearing pants, even though it's a zoom call.
Brad: “Thanks.”
Reed: “Yeah, you're welcome. But then it's actually saying, ‘How are you? We're humans. I can't wait to share this pizza with you’. One of the things we talk about is the pizza is the center of whatever you're doing that day. It could be a work meeting. It could be a family dinner. It could be you haven't seen my friends in forever. Whatever, and so tying that into the relationship and the feeling piece of it is really important for us.”
Brad: “Great. Thank you. Arjun, obviously from the subtitle of your book, you use a dating metaphor in order to describe the relationship we have with customers, walk us through the next phase is here in the beginning of that relationship.”
Arjun: “So to me, I looked at it more from the corporate world. I didn't get all the details, but the moment I translated that to a relationship, things jump out. Like Reed, what you talked about, I really think that tone with the guest changes and feels based on, as you gave an example, it could be a funeral or a birthday. That makes them realize you connect. And in any of these, the first impression is the most important. Just like let's say, Reed, if you were single and we just connected you to a person, the first few seconds you are either texting me, ‘Arjun, you really know me’ or ‘Arjun, I'll kill you’. We are in that ADD world where the first few seconds goes by and it just defines everything.”
“And then, exploration is very important, especially if this is a butterfly, to make the person feel at ease, to ask questions as you go through. Confirmation is that phase where you feel either during the ordering or the experience, that I made the right decision, because every time is a risk. And the very fact you made that decision, that's the confirmation. But the final thing is the most important. So Reed, visualize if you were single, when we set you up on this date. Before the date gets over with her sitting in front of you, you have to put her in one of three buckets. Either, ‘I really, really want to go out with this person again’, or ‘Never’, or ‘Maybe if I have an extra ticket to a football game’, but that decision happens. You make it in front of her, and she makes in front of you.”
“Which means for brands, we really must understand that future purchase intent, the decision happens with our product and our experience in front of them. So it's such an amazing opportunity for us to realize that and influence that.”
Reed: “Just to tee off on that. It's like, in the Tinder world where you just swipe in one way or the other, you're trying to find a match, and it kind of gets set up for you. But in a dating world in this instance, and I think a lot of brands are a little bit too forward in their courting phase. Where it is, you bring an engagement ring to the first date and you're like, whoa, whoa, whoa, whoa, you don't know me. I don't know you, you don't know me.”
“They're jumping to that sale and it's a little bit different than pizza, looking for that second one. Think about going to a car dealership and they want that you by the time you leave there. You're buying something of theirs, and you're like, I don't even know what you have, and you haven't earned the right yet. And that's the piece that I think that that relationship and the communication piece tie in so intrinsically to being able to ask for that next piece.”
Brad: “I watch customers walk into a new restaurant, and sometimes I'll just sit and observe and I'll see them. They look like they've maybe entered or landed on a new planet. They're confused. They walk in, they're not sure. They don't know where to look. They don't know what the process is. They look at the lineup. They're not sure where to stand in order to order. There's a bunch of moments that happen there. And I think that it's so important to be able to meet that customer and provide them with exactly the right amount of information. If you start rattling off all of your toppings and all of the things about you, they're not at the point where they can actually even absorb that yet. You have to walk 20 feet into a grocery store before you realize you're shopping, and it's the same sort of idea.”
Reed: “If you look at the picture in my background, I don't know if you can see it very well, but that's one of our storefronts. And we have menu boards up there. And actually, at the beginning of the year, I took all of our menu boards down and I replaced the five menu boards with our 10 specialty pizzas and our three pastas and our two salads and all that stuff. And I just put like, ‘Join our rewards program. Here's an offer. Have you tried a side salad?’ and stripped out all the complexity. And then we have a separate journey that says, ‘Hey, welcome in. How can I help you? Here's a menu’ and start bringing them on the journey versus you walk into a fast food place, you know to look up, but you just get inundated with, you don't even know where to start. I think that's a really good point, Brad.
Brad: “Taglines and headlines. So Reed, you actually touched on one of them. What do you call your rewards program?”
Reed: “Thank you rewards.”
Brad: “So you have your thank you rewards. Arjun, what other taglines and headlines have you heard that you think really bring a brand together? And why is that so important?”
Arjun: “So to me, if it's any brand, first the reason for taglines and headlines are important because that's the way we communicate. I just was looking at this data that 70% of news articles be forward to each other, without reading the article at all. So as we start going through, at Papa John's our initial tagline was better ingredients. But when I joined, I was guess not that smart. I just didn't get it. What do ingredients have to do with it? But then when we connected it to the better pizza, it became very important.”
“So I just feel when you look at these, it's also internal and external. And Reed, your take about running for mayor is very important for internally. And that also extends to having a common language, which has to be their language. And for that, I would request if you don't do it, anybody who's listening, please be a customer at one of your restaurants and a competitor every week or every month. And just see all the pain points Reed was talking about because we talk in different languages.”
“It feels like a different planet we are coming from. And the last part about breadcrumbing that you put there is especially with millennials, they are very smart. If you don't tell them everything, they’ll figure it out, and that's amazing. If you have an amazing icon, you don't have to show tomatoes are fresh, they get it by putting the tomatoes, dropping in front, doing something to show them, then they'll figure it out instead of you telling them.
Brad: “Right, that's a good point. I want to shift over to talking about giving. So the idea of the rewards programs that you're talking about Reed, and just in general, the karma of giving. What and when are really important, according to your book, Arjun? Tell me about what people should be giving and when should they be giving them?”
Arjun: “So, first thing is what is the most important thing, is if I gave something to Reed, he has to feel ‘Only Arjun gave this thing only to me’. If it doesn't feel that way, he right away puts it on the side. That means it was a wasted effort, and many times, brands focus too much on things like trash trinkets, which we buy for cheap, and giving it out as rewards. But I just think it doesn't work. It just has to be something thoughtful, and there are two parts to it.”
“One is of course, with rewards, people plan, they want to get the reward, but then there are surprise elements. If during these times a customer is coming in every Thursday, Reed's team chooses to just say, ‘Hey, we're just giving you an extra salad, something more just because. Because we love you’. That randomness makes the person really feel wow. Because I think we really have to look at what we give, but both of them have to connect with the guest.”
Brad: “So Reed, in your rewards programs and in your stores, maybe rewards programs, are outside of it. What are you doing in order to create this magic moment where the customer feels like you're giving a gift just to them and it's just from you?”
Reed: “So, I'm writing notes. So I don't forget things because I could talk for like three hours just on this. So as a leader of a pizza chain, I think that a lot of times people go to discount, discount, discount. Two for $5.99, all this crap, right? Our brand is on the opposite side. We're right on the top. We're a large house special three and a half pounds thin crust is $23.99. We're not trying to fight for the race to the bottom. There's a brand local here called $5 Pizza. Well you know what you're going to get, you're going to get a $5 pizza, but I like to give stuff away for free, not a discount. So it's very, very distinctive. It's not a $5 off a large pizza. We do that for our happy hour for our rewards members, but it's almost like negating in terms of like a Walgreen's special pricing.”
“But when it comes to free, it's not expected every time. So if you give someone a free cheese bread or free wings or a free side salad, they're not calling back and saying, ‘Well, last week I had a coupon for $4 off a large pizza. Can I have it again?’ or ‘Hey, last week you gave me free cheese bread. Do I get free cheese bread again?’ It's not assumed that you're going to constantly be giving such a nice value. And where Arjun's talking about it, it is something of value, significant value. Whether it's $6.49, $8.99, whatever those values are, versus a discount which cheapens your customer’s perception of your value.”
“The other side of it is where it comes to Arjun and karma and, Arjun talked a little bit about karma being action. For me, it is you give and you will get something back in return. And it's like giving good. And it is almost like a boomerang, but it's not with the intent. That's not your intent. Your intent is to give unconditionally and know that you are being good, acknowledging a fellow human, doing whatever. But there is a psychology behind that. When you give something to someone, they are compelled to give you something back, unless they're just an asshole. That was my first one. That was my first swear.”
Brad: “That's your first bleep. We're counting Reed's bleeps today.”
Reed: “I talk like a sailor. My father would not be proud.”
Arjun: “What Reed said was, what is so important is the word magic. Think about the first time you saw a coin in front of me in a hand game, and the coin, I'm not a magician, but the coin vanished. The five-year-old in you said, ‘Wow, what just happened here?’ That's the importance of that magic is when Reed was talking about the surprise unexpected, it's not just giving, give it in a way mentioning names to create that, ‘Wow, what just happened?’ moment, because that connects deep in the customer's heart. Magic is very important.”
Brad: “Arjun, let's go beyond the world of pizza for a moment. You have some very important lessons in your book that you've sort of taken away from your experiences at Chick-fil-A. Why don't you talk a little bit about those?”
Arjun: “Yeah. So to me, first I have to confess Chick-fil-A is my therapist. There are days I have a bad day. I just go to the drive-through just to order maybe a lemonade or anything else to hear them say, ‘My pleasure’, when I say ‘Thank you’. Because their ‘My pleasure’ lands all the way in my heart. And there are days I do twice back to back. And then once I walked inside, what I noticed is, their real difference is every time it’s the same ‘My pleasure’ and then they pause. They just literally look at you, even in a drive-thru, they think they're telling you, but because that's the part when the intent is ‘My pleasure’, it lands on your heart.”
“And if you take everything else from Chick-fil-A, what I realized is most of us don't take service to be a product. We are very strict about what can or cannot happen in our product. I feel Chick-fil-A teaches me every time I go there, they look at service to be another one of their products that the standards are always maintained every time. So that's what I would also request is from the Chick-fil-A lesson is, please set your standards for every service element and make sure to define what your guests get every time, from every experience, both in product and service.”
Brad: “So, Todd Viera had a question and it relates to this idea of giving, but it relates on more of a macro level in terms of community involvement, and what you're doing in terms of the charities that you support. And I'd like to ask this question. So I'm just going to read it here. ‘We've always been a big part of the community, and the family has given more back to the public than they would ever know. We've always wanted to give back practicing good karma and not accept press or recognition for that.’ They just simply want to live out their core value of community.”
"Most marketing companies and social media teams will encourage companies to showcase those or post their good deeds of what they're doing. The reasoning is that, of course, it helps the brand and it makes people want to come into restaurants that are involved in the community. So his question is, ‘How do you balance the desire to be humble with the idea of branding? Is it possible?’”
Arjun: “Yeah, so to me, I think there are two different parts. Part one is the actions. And as we do talk about the actions have to be from your heart without expecting. It's just that you're a good neighbor. If the little kid is struggling with his bike, you run across the street, help the kid up, put him on the bike, and as he just rides the bike by, waves at you, that's it, that's the neighbor. You didn't do it just to capture it on film.”
“And second, I really feel is for you to communicate. I think it happens in a different tone, but both cannot be connected. If you connect, and if I ran across and I had the camera, my wife hold the camera, that to me is not authentic. Because the core, the question was, is we have to be authentic, and as we act and also celebrate. The sharing has to be celebrating where the light has to be, not just on me, but the community also.”
Brad: “Right. That's good. Reed, I want to talk about authenticity, but I want to talk about it in the context of something that you mentioned earlier, and then combine it with this idea of the Chick-fil-A ‘My pleasure.’ You take the, ‘My pleasure’, or you take your person answering the phone who's asking, how am I? Turn that into, that can be very trite. It can feel like that's perfunctory or mechanical, very, very easily. So how do you guard against that? How do you get people? So they align that intention that you have, and that passion that you have, how do you do that in someone on your front lines?”
Reed: “So I think it comes back to hiring from the beginning. We've gotten to a place where hiring is hard. Obviously right now with COVID-19 where we're dealing with a really high unemployment rate. That being said, for a long time, we could barely staff our stores. there weren't enough people that needed good jobs. But, when I hire a manager, I meet at a Starbucks. I'm a big Starbucks fan. I like it because I think their mobile ordering is amazing, and I like the fact that they do a really good job in that their concept of the third place. Your home, work, and then your Starbucks, or it could be any Starbucks, but, it's their third place that you feel comfortable.
“But I look at how they interact innately with others. Like they're on an interview, but you meet them at a Starbucks. Do they hold the door open for someone? Do they pick up trash? Is it in them to just know that? And then my goal is then, as leaders in organizations that they're doing that all the way down. Whether it is you're hiring for someone that- we call it, giving a damn. We create kick-ass pizza while giving a damn every time. That's our vision. Our mission, vision, values are if you don't give a damn, then that's not going to work for us. And then for us, it is, life's too short. I use the mantra personally and professionally that we have 80 orbits around the sun, give or take and making the most of it. And if you're just phoning it in, that's not going to work for me and my team.”
Brad: “Right. So you're looking for that initial engagement. You're looking for a bias for customer service that's innate, and not looking to train from scratch necessarily. Just saying and care, like show up and care.”
Reed: “Yeah. Culver's is the other, sorry. I was going to say Culver's is the other one for me. It's Culver's and Chick-fil-A where it's just like, you have a 17-year-old working at a drive-thru and they're happy. They're happy, and they're smiling, and they never screw up. And if they do, they're going to go above and beyond for it. And it's like, that's the magic that we're talking about.”
Arjun: “I also would push one more micro nugget there is, if you're hiring somebody whose job would be standing all day, interview the person standing because standing energy and sitting energy are totally different. So for every role, find that person in that energy and see how that person performs in that phase or that state.”
Brad: “That's good advice. And you can probably, even for you Reed, your first contact might be over the phone, understanding how they communicate over the phone. I know that's something we do internally with our sales team. The first interview is always over the phone because we spend so much time communicating without having the benefit of body language, right? Arjun, you talked about not making people feel stupid. Just dig into that a little bit. Where have you been made to feel stupid in your experience?”
Arjun: “To me, it's like any restaurant, anywhere you go, most of us feel a pressure. Like Einstein Brother's Bagels, initially we were selling so much of plain bagel, plain cream cheese, and then it was just simple observation. What I realized is that I walk in, I get eight seconds to look at the menu board, which is like 30 feet left. And within eight seconds, if I cannot give an answer, the order taker takes eye contact from me and the person behind. Which literally telling me Arjun, you bozo, didn't use a swear word. You can't even place an order at a bagel store.”
“Of course I say plain bagel and cream cheese. And once we changed that immediate, give the control back to guests, it changed the business immediately. So anywhere you look at pain points, and I think Brad, you talked about observing is we must observe our guests anywhere. There is a little bit of a pause, the eyes keep moving left and right. There's an experience element where they feel they're being stupid, and people don't pay us long-term if you make them feel stupid.”
Reed: “The stupidity thing is really important. And I also think that like I saw a question come in about discounting and stuff like that. I have very strong opinions on stupid offers and coupons, and what I deem as stupid. I go and I do a lot of competitive research. Papa John's, Domino's, all those other things. And it's like, I think that two-topping, three-topping, five-topping pizza, is the stupidest possible thing you could offer. I just wanted a damn pepperoni.”
“You're either going to increase my food costs for me to add extra cheese, or pick a topping that I don't want. So like dumb it down. And, hey, I got to go pick and I got to go yell at my wife in the other room. Hey, I want pepperoni. What do you want? We got another free topping. You're making it hard for them. It's just like, make it simple, keep it simple, stupid, and just work on the relationship versus the complexity of deals.”
Brad: “Arjun, there's a section in your book that just jumped right out at me and it just simply read loyalty is not a program. And I think in this industry, it's so rare for us to talk about loyalty without pairing it with the program that we have going along with it. So take us back to your dating metaphor and put loyalty in perspective for us.”
Arjun: “Absolutely. Let me just put you in a situation where you guys are my best friends and this is Arjun. Imagine Arjun is single, is his dating practice. I put this coupon out, go out with me this weekend and I'm buying ice cream. What's wrong with Arjun? And then Arjun comes out with an even bigger plan where I say, guys, wait, I have this punch card. If anybody chooses to go out with me, I give them this punch card. After five punches, five dates, you get carnations, after 10, roses, and after 15 box of chocolates.”
“I don't think I may even get a second date, but think for a second, we do this in businesses. Why are we trying to buy love? Because that's the reason I feel that this whole concept, everything we're talking about is everything you do think about connecting relationships and what will move the relationship forward, connecting with the heart and not just buy a transaction.”
Brad: “So Reed, I want to ask you a question from one of our attendees who's asked. Karen Beavers asked this question. She said, ‘Reed, why do you believe that a discount cheapens the perception of the product? And have you thought about ways to offer discounts that do not lessen the perception or that ensuing experience?’”
Reed: “Yeah, so I think that there's two things. This is what I went to school for is consumer behavior, and looking at that, one of the things that we talk about, loyalty programs. I'm going to connect these dots, I'm really good on tangents. But if we talk about like loyalty programs as programming, it's a system. Whether or not we use an integrator of SpeedLine’s, Paytronix to do all of our data and stuff like that. And the system itself is a program, but it gives you the best ability to give insights and stuff like that.”
“When it comes to the discounting piece of it, full circle from how that interacts together with the discounts is, there's a place called that rhymes with Baba Murphy's. It's an international chain, it's called Papa Murphy's. I was trying to be funny. But they have deals all the time. And so they have mailers and they have, on their website, you can go get a coupon right before you order. Well, am I ever going to pay full price there? Am I ever going to go choose to pay full price? No, because I feel slighted.”
“There's a local restaurant by our house, and they had buy one, get one burgers. And I remember my mom saying, ‘Hey, let's go to this restaurant tonight.’ And we didn't go out a lot as a kid. And so I remember she would go over to the mail pile and everybody's got that mail pile of like, six inches thick. And she would go through and go through and go through. And she couldn't find the coupon. And I was so excited for these burgers. And then she said, ‘Well, actually I can't find the coupon. We're going to go somewhere else tonight.’ And so that relationship wasn't built, we were looking for the discount, didn't get it. And so where it comes to those freebies and those free delights, it's like that personal connection says you get something for free. Not often because you're not willing to have a mini discount always.”
Arjun: “That's great. Let me touch on one more thing is, that what program is very important, that loyalty is the final thing that we are fortunate to earn. So for us, it is each guest’s one at a time action, good karma. Get to know them, but the moment to make it a program, there's also a danger. That means your team members in restaurants feel loyalty is not what we have to worry about, it's getting taken care of outside now. Every interaction is where the decision is made. And remember, they will decide at the end of that interaction to come back. So loyalty, it's a reward at the end, but our focus is good karma every guest, every time.”
Reed: “I was just going to say the key there is, framing it up when you do have a loyalty program of how you're selling it internally and externally. If you go to Walgreens at the end, and they say, ‘Hey, do you have a whatever?’, but we've designed a program that says, it's called, thank you rewards. So you're not saying, ‘Hey, would you like to be a member of our program? When we can mine the hell out of your data?’ It is, ‘Do you have a thank you card?’ This is our way to say, thank you for choosing us. And like, it's all about how you frame it because having someone join a loyalty initiative or, or your company, it is still a sales thing.”
Brad: “You've talked about this in terms of outsourcing. And I think about this in terms of, there's no less love that I have for my mother, when I say to my wife, go get my mother a mother's day card, right? My mother's not listening. You guys are all sworn to secrecy. So is every listener, but there's a sense that, I'm certainly not engaged with that. I've outsourced that to someone else.”
“If you're in a larger company, though, and you're right, Reed. If you're on the front line and you think somebody else is looking after- Oh, the marketing department looks after loyalty. If that's the attitude on the front line, that shows through to the customer, and it's impossible to then do some of the things that Arjun is talking about, where you actually engage that customer on a very personal level and give them a gift that only comes from you. All of those things we've talked about. That was really driven home in the book, and also in this conversation. You talked about discounting the unconditional part of it, Arjun. Talk about what that looks like in practical terms.”
Arjun: “So discounting, I think many a time as we talked about, I think it's very important for you to stay true to your brand's actual price. Discounting could be a strategy, but never forget that you have a price and eventually guests must be willing to pay the normal price. I go back to Chipotle's early days. They had a very simple principle. We will either buy our burrito at full price, or we'll give it to you for free. They used to give out these bronze coins when there was a new restaurant opening.”
“And of course, some of us even thought the coin was more valuable than the burritos, so we never cashed that, but that was brilliant to look at. And I really feel that there could be times you want to get a new customer in, but at every point, you must have the intention that longterm to survive in the business and flourish. You cannot stay in a discount, discount, discount model. Especially, for some of us who have smaller, fewer number of units, then you are just literally playing into bigger brands who can out discount you. So staying true to your core price is very important.”
Reed: “Well, and with that comes like price versus value. It's always value. Whether your value is a cheap, crappy pizza for five bucks or whatever. There's a line. I don't know which way I'm going on your screen. But like, as price goes up, so should quality. But it also goes to, there's in the States, I don't know if you guys have these in Canada is, Kohl's. You walk into a Kohl's, everything is on discount. Not one thing is full price in the store. So they have these MSRPs that are whatever they are, and everything's just kind of 20%, 30%, 40%. And so then at some point you're like, what is the value of this thing? If you're going to constantly have a $4 off a large pizza coupon, why don't you just change your price to $4 or $4 less?”
Brad: “Arjun, one of the questions that comes up is what do you do when you have a guest who no matter what you've tried to provide for them, they're just simply not willing to accept anything that you're doing in terms of a service recovery? Do you have a strategy for dealing with that?”
Arjun: “Yeah. First thing is, I'm not a spiritual person, but when a guest comes in and complains, that's the day I pray, and I pray out of happiness. Because in today's world, this guest could have just vanished and never come back. The very fact that guest is talking to me, that means there is some connection between us. There's still hope in this relationship. I also realized that if I listened to this guest and do not try to buy him or her out every two minutes by saying, okay, $5, okay, $10. Now, listen.”
“But at the end, there's a potential for this person from being so irate, to being a vocal loyalist who will go and put it on word of mouth everywhere on the media, about how amazing we are. So the two things I always request anyone in that position is to take a deep breath and look at how fortunate you are. This person could have just vanished and put a negative review out. He or she didn't. Talking to you, giving you a chance. And secondly, at the right opportunity, realize you can move this person straight to a loyalist, because the person is interacting with you one-on-one.”
Brad: “Before we jump into questions. In our preparation Arjun, you shared an amazing story about how you celebrated top customers at one of the chains you were with. Why don't you take us through that story again? I just love it.”
Arjun: “Thank you, because what I felt that many a time when we talk in a corporate office, everything is cool. But to me, every person living and breathing, this is very important. So when I would visit any of the restaurants, I would just ask, looking at the database who is my number one customer? Let's say it comes out to be Reed Daniels. I would write and say, ‘Hey, how are we doing today?’ because Reed spends close to $5,000 with us. I need to know every second, how Reed is doing, how Reed’s car's tire pressures are, because if it goes down, I should go and take care of it. And once we talked about it, then we just said, okay, let's do something for Reed. We all put in a bowl just ideas. And then we picked four. We wanted everybody's ideas to count. And the ideas would be something as simple as, take a cake or balloons or anything like that.”
“So we call, Reed and say, ‘Reed, we have a delivery for you.’ He's like, you didn't order. I said, we know. We show up, five of us unchoreographed. We sing a thank you song. Give him balloons and say, Reed, on a Monday or a Tuesday, can you please come to our store, because the rest of the crew wants to meet you. And also if you want, you can work for us for two hours, make pizza with us. We would love to donate $500 to a charity of yours. Will you say yes or no? Always yes. He comes in, and what we do is we have the right spelling on a cap and an apron and a shirt for Reed. And few minutes, he makes pizzas, takes pictures. Of course, he loves to burst the bubbles on a pizza, that's a fun job. And after half an hour, we literally leave Reed alone.”
“Reed starts going to a corner and starts calling his buddies by saying, guess what? I'm at my local favorite restaurant. And he starts using ‘my’. Come over. I'll show you how to make pizza. So what we did was a few things. One, we created amazing excitement in our restaurant, and everybody participated. Second, Reed now becomes a lifetime customer. Will he cheat with us ever ordering pizza anywhere else? Never, because he wore my uniform. And third, inside the restaurant, we never talked about customers. We always told them, Reed, Brad. Now we have a face to the loyal customer, and that changed the culture for us forever. So please, I request that, take every person in your team and help them together, celebrate every customer. And that will change your culture.”
Brad: “I want to just mention a couple of things. We're coming to the end and we're going to jump into questions in a second. We do have a giveaway that I promised we'd talk about. So, everyone who is listening live will be entered automatically into a giveaway for one to five signed copies of Arjun Sen's excellent book, Customer Karma. We will notify you via email if you've won. And if you don't win, I encourage you to go out and I'm going to plug this shamelessly for you. You specifically asked me not to do this, and I'm just going to do it anyway, because it's written in a blog-style format, there's lots of tidbits that you can take out, but there's also an overarching strategy in terms of transforming your customer experience.”
“There's elements in there that we're taking to heart here at SpeedLine. And that's how you know that it transcends just the experience you've had in food service, but really it goes across the board. So thank you for that, and that's an amazing gift that you're providing for listeners and viewers of the webinar.”
“I do want to open this up to questions. You have lots of questions that have come in through the time here. I have a simple one for you, Reed. So a person calls in, and this is from an anonymous attendee. They say, ‘How do you handle a request for a pizza topping that you don't have, like anchovies, for example, what happens when you feel like you're disappointing?’”
Reed: “Hello, anonymous. One of my favorites, since I'm kind of a nerd, a closet nerd, is ‘Yes, we don't have that.’ It's like, oh, that's kind of funny. Yes, we don't have that. So you're not saying no to the guest. Also, we put sauerkraut on our pizza, which people like. Some people have never had it. And it's kind of one of our taglines is don't doubt the kraut. And I would say, ‘We don't have that, but have you tried sauerkraut on pizza? It's delicious.’ And so it's a compliment or a substitution of something a little bit different.”
Brad: “Okay. Very good. I've got a question from Michael Brown. So he has seen over the last 40 years, he's been passionate about customer service. And in the last 20 years, he's seen people accept terrible service and just ignore great service. And, and I would suspect that what he didn't add there is likely in terms of people valuing price or, or a discount on top of that, do you think that our guests don't care about service anymore, Arjun?”
Arjun: “To me, I think there are different occasions, certain occasions, certain elements of service become very important. And the very fact, Michael, in your question you talked about they're not caring. I'm assuming they're going to different brands. So I really think there's the right balance. Of course, if the price and other elements don't work, it doesn't work, it doesn't align, but it's all about relationships. Because think about how do you get to the search stops here. And with every customer, you have to believe there is a way to get to search stops here. And again, I personally do not believe by just crappy service, sorry to use the word, you can get there.”
Reed: “I also think on the positive side of it, when you're looking at people have a great experience and, or a great service, and they're not saying anything back on it. I think that one of the reasons I don't like Yelp is people expect great service now. That's like table stakes. The expectation is great service, and so they're not going above and beyond because that's their expectation that that's just the job.”
Arjun: “So add a little magic to it because that's the part where I add a little magic to it. Make them feel well, that's very important.”
Brad: “Reed, this one is for you. It's from Steve Jennings. He's asking what technologies are you using that delivers that philosophy that you ascribe to, this idea of customer karma? What are you using in your store to accomplish that?”
Reed: “So we have four technologies. I talk about my tech stack from a POS perspective as having three legs on it. And whatever those three legs are, or whatever you use for those components is that you have your POS, your online ordering, and your loyalty. And so with that, we have SpeedLine for our POS. One of the magic pieces of that, what I always love is the caller ID popping up, and you say, ‘Hey, Jan, how are you?’ And Jan's like, ‘Hi.’ And then she'll hang up and put it in the order. She'll call back. And it says like, Jan is calling back again with an order in here. It's like, ‘Jan.’ And she just started laughing. She's just not expecting it, not having to go through the rigamarole. So that helps a lot with just knowing your guests and knowing their name and a little bit of that magic.”
“We use Paytronix for loyalty. And that helps us have closer to those one-to-one relationships on a micro-scale. And then online ordering is through Paytronix as well. They just rolled out a new online ordering provider. The key to that is, as Arjun talked about earlier is, being able to have that guest pull up their favorite word, or explore the menu or whatever you want, but those are my three.”
“And then we just signed on with a company called Tattle that we're just about finishing, rolling out. It's a guest feedback, and that brings back operational issues. And it gives us a way to actually hear from our guests in a more poignant way. Like they can give speed of service or quality of food, or whatever different types of ratings. And then it gives us touchpoints and the ability to say like, ‘Hey, we're sorry,’ and actually get more robust feedback than a Yelp review or a one-liner on a contact form.”
Brad: “Very good, thank you. I know that we have other customers who are using, they're using for loyalty, they're using a company called Punch. We have that tightly integrated with some of our systems as well, like your in-store system with Paytronix.”
“For online ordering, of course, there's SpeedDine. There's also Brygid. There's a few other solutions out there that integrate with SpeedLine Solutions. And I'm not saying that as a plug, I'm saying it to provide a little context on this. I've spent over 25 years in restaurant technology. I was on the other side of the table for about 10 years. And I understand when people have different needs. It is never one size fits all. It's always finding the right solution for a customer.”
Reed: “And this is an unshameless plug for SpeedLine. And that's actually, when we did, it's probably about seven years ago now, we did an RFP, if you will. Kind of like looked at a bunch of different services. And one of the things that I like about those services is that it wasn't a one-stop solution. What I like about SpeedLine is, I could pick out my online ordering provider. I could pick a loyalty provider that would work and then integrate together within those three parts of that stool. And SpeedLine's been very stable. And so that helps with that those other pieces that are dependent on the internet to work.”
Brad: “I've got a question from Steve Jennings on this, and this is probably along the same lines of just staying in the same thread here. He's asking Reed, if you believe in having a mobile app, and do you have a CRM or database to improve customer karma?”
Reed: “The short answer to that is, oh, hell yes. Yeah. With open dining and Paytronix that's our mobile app, we have an app with some updated, integrated, online ordering coming through to that. But then Paytronix is our customer record. With Speedline and having all of our stores server-based, I know that that's kind of our customer record. That doesn't have everybody, but it's the people that choose to be those in badge lists and those brand ambassadors. And then with the online ordering and then integration, we know how they're ordering when they're ordering, all that kind of stuff.”
“Super, super important, but the mobile app and, I'm a kind of a data nerd as well. And it's awesome to see the progression to mobile. So mobile ordering and mobile apps and everything are really important. What is kind of cool about mobile apps specifically is the ability for push notifications. So, push notifications and text, there's a lot of legal around texts. So we haven't really gotten into that, but the light touch mobile notification, we're going to start working on in Q3 to kind of hit people as a lighter touch than an email or a text and stuff like that.”
Brad: “Got it. Arjun, what are your thoughts on this?”
Arjun: “Yeah, so to me, I would take it at a higher level because, let's strategize with what we are doing, because once we get into a lot of different elements, all of them have to be aligned with one goal. Is the person who is interacting with our customer is best equipped to deliver the service, and the customer feels it? And this becomes very important as you start looking at with AI and everything else coming in, we really have to be careful about how and what information we use. And the rule I'll put very simply in front of you is if you're dating at any point, and the person sitting across feels that you are even slightly stalking, that relationship is not going anywhere. So I think responsible use of information integrating and remembering why you're using this long-term relationship is very important.”
Brad: “Great. I've got an interesting question from Jeff Skoke on this. He's asking about menu management. So in the traditional world, you'd use the stars, dogs, cash cows, and plow horses, that that would be the way that you'd analyze your menu. He's asking if that's still a solid framework, or if instead, you should include things like your labor costs, because we know that time is money and you can trade it. If you do your own vegetable prep, for example. Or your shredding, your own cheese, you're trading off that labor for that food cost. And also brand reputation and brand perception. Have you, have you had an experience with that, Arjun?”
Arjun: “Yeah. So to me, I really think as you go through the menu, everything that we are analyzing has to be not only with guest preference today, but also the evolution of the guest. And one of the things it's very important to start looking at based on, I think everything you talked about Jeff, there is to also go to the Amazon mindset. People are ordering this, also what do they order? Secondly, also to look at what are the evolving trends? And I also would balance this by, don't be scared to go the route Reed did because simplification is very important. You do not want to have that one menu item that Arjun will order one out of 10 times, but you really want to make it simple. Think of in total overall experience.”
Reed: “I also think that that's really important, like two things. When it comes to keeping it simple, everything is cross utilized across all our menus. So we have meatball hoagies and spaghetti and meatballs. I only have spaghetti on spaghetti and meatballs, but I use penne for my other stuff. I'm thinking about getting rid of spaghetti and just having penne. So just simplifying it so when it comes to that labor percentage, one less screw up of, ‘Oh, I dropped the wrong noodles,’ or whatever that is.”
“But the other idea is the idea of bundles, and being able to do bundles that don't have significant discounts. If you would do the math on like a McDonald's meal, whatever, that's actually sometimes only like $0.03 that they're giving you a deal, but they've packaged it for you, and people really like packages right now.”
Brad: “Thank You. I want to thank our panelists here. Reed Daniels, the CEO of Red’s Savoy, and Arjun Sen, the author of the book, Customer Karma, and CEO of ZenMango. As I mentioned, he's the author of this book. We are doing a giveaway and we will let you know if you've won. But thank you again for this and thank you to Pizza Marketplace for allowing us to host this webinar. Tremendously informative. I thank both of you for the lessons that I've learned today.”
Reed: “Cheers.”
Arjun: “Thank you.”
