Last year was a very challenging year for Chipotle, one that was well documented and caused company officials to take strident measures to take control of food safety, experiment with a temporary loyalty program, and restore brand loyalty among its customers.
Now, Chipotle management is tying employee compensation in its restaurants to high customer service scores. Is this a good or bad idea and what elements are involved in this that could bring a positive or detrimental effect? Can this impact the overall customer experience?
Loyalty360 asked some of its members for their thoughts.
Brennan Wilkie, senior vice president of customer experience at InMoment, told Loyalty360 that, ultimately, the decision to tie compensation to customer experience outcomes is a deeply personal one for brands.
“When done correctly, it can give a customer experience agenda more visibility, while positively influencing employee mindset and behavior,” Wilkie explained. “However, it’s not easy to do well. Simply ‘paying for performance’ is a losing proposition. Without a genuinely happy and motivated workforce, monetary incentives create more risk than reward, feeding a culture of short-term, limited wins, rather than coaching and root-cause improvement for the long-term customer and financial benefits. The key to incentivizing customer experience successfully is to stay focused on building an ideal employee culture.”
Chirpify CEO Chris Teso weighed in on the topic.
“Generally speaking, good customer service drives increases in revenue and profitability,” he told Loyalty360. “So, it makes sense that Chipotle would try to kick-start a virtuous cycle of good customer service and greater revenue. However, this customer service initiative (like all business initiatives) is driven by the tone from the top and must permeate all aspects of the business, not just front-line employees. Chipotle would do well to embrace this mantra in all aspects of the business, from the c-suite to the front line.”
Meanwhile, Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, told Loyalty360 that, on the surface, the compensation plan looks like a similar structure many retailers might utilize for store managers.
“Incentivizing associates to produce results can improve overall goals, but that’s mainly sales goals,” Magliocca explained. “For Chipotle, it seems a bit more complex transitioning that idea to a quick-service restaurant and incentivizing based on customer satisfaction. More importantly, there’s a larger issue at play here and I don’t believe incentivizing employees is going to fix it alone. It’s a micro solution to a macro problem.”
Last week, Chipotle CEO Steve Ells said the company must be steadfast in executing its recovery plan, “which remains the primary focus of everybody at Chipotle. Specifically, we’re focused on delivering a safe and extraordinary guest experience in every restaurant, restoring trust and building sales, restoring our economic model, and enhancing the guest experience through innovation.”
Two important enhancements to the customer experience are menu innovation and digital ordering, Ells noted.
“We are actively exploring ways to enhance the guest experience by offering new additions to our menu,” he added. “We believe that this is a good way to entice infrequent or lapsed customers to return as well as a way to increase sales. Any time we consider new menu items, it’s important to us that they remain consistent with our food culture, both in terms of the ingredients we use and how the new items are prepared.”
What’s more, Chipotle is moving “aggressively” to make digital ordering more appealing to its customers and more efficient for its restaurants.
“Nearly all of our restaurants have a second make-line in the back of the restaurant where we fulfill digital, fax, and catering orders,” Ells said. “By optimizing the use and design of these second make-lines, we envision a time when digital ordering could account for a much larger percentage of sales than the 6 percent it represents today. Maximizing our digital sales requires changes both to the second make-line itself and to the ways by which our customers place digital orders.”
Ells said that the original second make-line resembles the service line customers see in the front of the restaurant.
“The new line is a much more ergonomic and efficient design, configured such that less labor will be required to produce higher sales volumes, and does so more quickly,” he added. “The new line incorporates an advanced queuing system that takes advantage of a heads-up digital display, which allows our crews to assemble orders without distraction. The benefits of these new lines will be enormous, including faster, more efficient assembly of orders, reduced errors, and more consistent portion sizes for our customers; all of which we believe will help us drive increased sales volumes.”