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 1. Back to blog | How to keep your customers happy after raising your
    restaurants prices the Danny Meyer way




HOW TO KEEP CUSTOMERS HAPPY AFTER RAISING YOUR RESTAURANT’S PRICES — THE DANNY
MEYER WAY

Thursday, February 02, 2023

So you raised your restaurant’s prices. Welcome to the after party.

To kick us off, let’s acknowledge two things: 1) Raising prices can be a great
long-term growth strategy for restaurants, especially when combating the
pressure of high inflation. 2) Higher prices can often translate to higher
customer expectations.

While some patrons might be more forgiving of price increases, many will start
expecting more from your restaurant in return for the steeper bill at the end of
their meal. One study showed that nearly 80% of respondents correlated higher
prices to better experiences.

That’s why after you increase those numbers, your best bet to retain customers
and attract new ones is to focus on cultivating a guest experience they’ll have
no choice but to love.

Not sure where to start? You’re in luck. If anyone knows about how to keep
customers happy after raising prices, it’s Danny Meyer. The founder of Union
Square Hospitality Group and Shake Shack famously introduced a no-tipping policy
at his restaurants in 2015 by raising menu prices 15-20%.

Although he later reinstated tips due to the COVID-19 pandemic, during the
five-year run of his “Hospitality Included” model, Danny not only kept loyal
customers happy but managed to grow even more popular during that time despite
having markedly higher prices.

The best part? Danny recently sat down with Heartland leaders to discuss his
hard-won recipe for how to create a better customer experience and make your
restaurant a success — higher prices and all — with a philosophy he coined as
“enlightened hospitality.”

Whether you're a multi-location, chart-topping restaurant collective or an
up-and-coming hotdog cart, read on to get the ultimate guide to meeting and
exceeding customer expectations from the restaurant trailblazer who literally
wrote the book on hospitality:

 * Hire people who are great for your restaurant

 * Retain great people with an employee-first philosophy

 * Build a culture that puts hospitality above service

 * Tap into technology to deliver convenience

 * Master the art of paying attention to customer feedback

Let’s get cooking!




TOP TIPS FOR CULTIVATING A CUSTOMER EXPERIENCE THAT’LL KEEP THEM COMING BACK FOR
SECONDS — NO MATTER THE PRICE


1. HIRE PEOPLE WHO ARE GREAT FOR YOUR RESTAURANT

Aside from the food, the staff your guests interact with will likely have the
biggest impact on how they remember their experience dining at your restaurant.
That’s why it’s important to hire great employees.

We know. Easier said than done, right? First, you’ll need to define what a
“great employee” looks like to your business. You can hire a candidate with an
A+ resume and still hire the wrong person. To hire people who are great for your
restaurant’s specific culture, it’s best to look beyond the resume.

Here’s what we mean: A survey showed that 42% of customers would pay more for a
friendly, welcoming experience. So if you have a candidate who previously worked
in a five-star restaurant, but they can’t be bothered to go the extra mile for
your customers or lend a helping hand to their co-workers, do you really want
them influencing your team’s culture?

Danny recommends looking for these six emotional intelligence skills that
indicate a high “hospitality quotient” when interviewing candidates:



 * Kindness and optimism

 * Intellectual curiosity

 * Work ethic

 * Empathy

 * Self-awareness

 * Integrity

The goal? Hire a diverse team of people who bring different things to the table
but all exhibit that natural impulse to take care of what a customer needs.
Making sure your guests have positive interactions with a warm, attentive,
genuine staff is a great way to soften the blow of higher prices.


2. RETAIN GREAT PEOPLE WITH AN EMPLOYEE-FIRST PHILOSOPHY

Once you’ve got the right team on board, your work isn’t done yet. The last
thing you want is a great employee leaving just when you need them most (like
that sensitive time period right after you raise prices). So the second, equally
crucial act to recruiting those great employees is retaining them.

How do you do that? For starters, it’s about getting in the right mindset as an
operator:

“My job when I come to work is to serve the people who I am expecting to serve
our customers.” -Danny Meyer

Put your investors last: In Danny’s words, as a restaurant operator, you have
five stakeholders, and every time you make a choice you have to ask yourself how
it will impact them. But you get to choose how to prioritize your stakeholders.

Here’s Danny’s recommended order:

1

Staff

2

Guests

3

Community

4

Suppliers

5

Investors

While it might seem counterintuitive, the idea is that when you take care of
your staff first, it’ll create a virtuous cycle where one good thing leads to
another. Ultimately, you’re improving customer satisfaction and making your
investors more money by keeping your staff happy.

Treat employees as volunteers: Another of Danny’s secrets to cultivating happy
employees is to treat them as if they’re volunteering for the job. We want to be
clear — you should definitely pay your employees! But know that if they got a
job with you, they can probably get another one at the same pay rate somewhere
else. Showing your employees gratitude for “volunteering” to bring their gifts
to your business can go a long way.

Carve out a path to growth: As Danny learned from experience, the final
must-have ingredient to retaining great employees is giving them somewhere to
grow. Make a place for team members to move up at your restaurant by promoting
from within instead of forcing them onto the off ramp if they have aspirations
for a next step.


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3. BUILD A CULTURE THAT PUTS HOSPITALITY ABOVE SERVICE

According to research, 59% of consumers said they’d walk away from a brand after
several bad experiences, while 17% said they’d walk away after just one. Add
higher prices — and higher expectations — to the mix, and you’ve got your work
cut out for you when it comes to customer retention and making a good impression
on new customers.

So the question is, what makes a good experience? You might be thinking
excellent customer service that’s high-performing on a technical level is the
answer. But if you ask Danny, he’d say hospitality is even more important.
Wondering what the difference is? Think of it this way: Service is the technical
delivery of a product, while hospitality is how the delivery of that product
makes its recipient feel.

If you’re not sure how to build that concept into your staff’s daily approach,
take a page out of Danny’s book and start by providing your staff with a common
language and standard by which to make hospitality-driven decisions.

“I believe that language is the mortar between the bricks of culture.”
-Danny Meyer

The way Danny does this is by challenging his staff to think of service as a
“test” they must pass with 100%. You can get up to 49 points based on how good
your performance is technically. And the remaining 51 points come from how you
make others feel. So even if you do everything perfectly on a technical level,
you’ll fail if you don’t have the other half, and vice versa.



To sum things up: Meeting customer service expectations isn’t a matter of forced
scripts and strict uniforms. It’s about holding a healthy tension between how
you make people feel and how you execute on the fundamentals. Providing your
staff with that framework, and then giving them the freedom to create a
personalized experience that makes each customer feel seen, heard and welcome
can help you win loyal customers even when your prices are elevated.


4. TAP INTO TECHNOLOGY TO DELIVER CONVENIENCE

One of the quickest and most effective ways to up your restaurant’s game is
through technology. But as Danny would tell you, not just any technology —
technology that reinforces hospitality.

What does that mean? Basically, don’t sacrifice your restaurant’s personality
and charm at the altar of more technology. Do add tech to your restaurant that
will boost your restaurant’s efficiency, deliver convenience and help you create
a thoughtful, customer-led experience in a way that still feels true to your
business.

For example, when selecting or upgrading your restaurant point of sale (POS),
these are some features that can add to hospitality:

Mobile and online ordering: Accept mobile and online orders with intuitive order
balancing that keeps the kitchen running smoothly, even during peak hours.

Scan to pay: Elevate the customer experience with quicker, easier contactless
payments for dining in, delivery service and takeout.

Self-service ordering: Give customers more control with self-service options
that let them scan a QR code with a phone camera (iOS/Android) to see the menu
and place orders on their terms.

Tableside ordering: Empower servers to work faster and deliver better service
tableside, with hand held tablets. Servers can reduce trips to the POS, prevent
order mistakes, tell customers about 86ed menu items in real-time, add in
dietary restrictions or allergy info instantly and even accept tableside
payments.

Mobile guest app: Keep customers coming back with skip-the-line ordering,
rewards functionality, order history and even dietary needs tracking.

There are many more examples we could talk about. But since we know you’re busy,
we’ll leave you with this. According to a PWC survey, nearly 80% of American
consumers said that speed, convenience/ease-of-use, knowledgeable assistance and
friendly service are the most important elements of a positive customer
experience.

So a good rule of thumb when selecting technology for your restaurant is to ask
yourself these two questions: 1) Is it making the customer’s experience fast and
frictionless? 2) Is it freeing up your staff to deliver the special assistance
and attentiveness that excellent hospitality demands?


5. MASTER THE ART OF PAYING ATTENTION TO CUSTOMER FEEDBACK

If you’ve been avoiding customer reviews after raising your prices, don’t. It’s
a better idea to keep your ear to the ground instead of your head in the sand.

As an entrepreneur, you’re an innovator, a solver of problems. The way you get
to the solution is by gathering information from experiences good and bad, and
building up your knowledge base until you can use what you’ve learned to find a
better way forward. Customer feedback is a big part of that.

“I think that innovation is basically that you have paid attention to a lot of
things. You've got your own file cabinet in your mind and your heart where
you're storing all these dots of information, and you find the right moment to
connect dots in a fresh way.”
-Danny Meyer

We get it. Nobody likes negative customer reviews. It would be great if the only
ones you received were perfect five-stars. Unfortunately, that’s not the world
we live in. But you’re not alone, not by a long shot. Even Danny faced his fair
share of reviews that were less than glowing when he started out. However,
instead of pretending they didn’t exist, he paid attention. And it paid off.

Listening to your customers: Social media, online reviews, email marketing …
they’re all invaluable tools for gathering current intel on how people are
talking about your restaurant. Is it uncomfortable? Yes, sometimes it can be.
But it’s also a great way to hear real-time conversations about the good, the
bad and the ugly of how your guests feel about their customer journey at your
restaurant and whether or not it’s meeting customer expectations.

Listening to yourself: More than listening to your patrons, Danny also
recommends paying attention to your own experiences as a customer. What are some
things you love about dining at your favorite restaurant? What went wrong with
the restaurants that disappointed you?

Bottom line? Simply by paying attention to your customers’ dialogue and your own
roses and thorns as a diner, you can connect the dots to create a better
customer experience — and make the next review that much better.




READY TO TAKE ON THOSE GREAT EXPECTATIONS?

So, to wrap things up: How do you meet heightened customer expectations after
you’ve raised your prices? Well, the answer is a lot of smaller stuff that adds
up to something greater.

If you succeed in nailing all five of the tactics we just talked about, that’s
awesome. But it’s even better if you don’t stop there.

Danny’s final word of advice? Treat every day as an opportunity to do two things
with your team:

 1. Honor the work you did together yesterday
 2. Agree on two or three things you can do together a little bit better today

Over time, doing things just a little better every day can lead to a customer
service experience worthy of fostering customer loyalty out of diners new and
old who will stick with your restaurant through thick and thin. Sticker shock
included.

Food for thought before you go: Remember, the point of “enlightened hospitality”
is not perfection.

“No one's favorite restaurant is a perfect restaurant. Your favorite restaurant
is the restaurant that loves you the most. End of story.”
- Danny Meyer

If you’re looking for more content from entrepreneurs who have been in your
shoes, head on over to The Entrepreneur’s Studio and browse our growing library
of podcast episodes. We’re collecting tons of can’t-miss strategies, tools and
tips for how to run and grow your small business, with heaps of inspiration to
boot.

--------------------------------------------------------------------------------

Heartland is the point of sale, payments and payroll solution of choice for
entrepreneurs that need human-centered technology to sell more, keep customers
coming back and spend less time in the back office. Nearly 1,000,000 businesses
trust us to guide them through market changes and technology challenges, so they
can stay competitive and focus on building remarkable businesses instead of
managing the daily grind. Learn more at heartland.us


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