TULSA, Okla. — How do you measure the business benefits of a smile?
With friendly customer service a competitive differentiator for some of the most successful brands—Trader Joe’s, Chick-fil-A and Southwest Airlines, to name a few—cracking this code could be the key to cementing customer loyalty. And as frictionless technology challenges what “service” means, it could also be a way to survive today’s retail reordering.
If any retailer has figured out the metrics, it’s QuikTrip Corp. The Tulsa, Okla.-based chain is famous for its in-house analytics and its memorable customer service. It has amassed a high level of customer loyalty without launching any formal, chainwide rewards program. This strength helped QuikTrip clinch the 2019 CSP Intouch Insight Mystery Shop, its fourth win in the program’s 15-year history. The study includes both a covert and a revealed audit, with shoppers sizing up 10 participating brands on everything from greetings to gas-island cleanliness. (Click here to see full results.)
“It’s really hard to measure the outcome on friendliness and sincerity mathematically,” concedes Chet Cadieux, chairman and CEO of QuikTrip and a self-described “math geek.”
“But my point isn’t that you can solve everything with math,” he says. “It just so happens that … you can use analytics to hire the right people to begin with. And if you hire friendly, sincere people, they’re generally, on most days, going to be friendly and sincere to the people they’re taking care of."
Service With a Smile
QuikTrip excelled in the customer-service aspects of the mystery shop. For example, 84% of QuikTrip shoppers agreed that they were greeted in a courteous manner, placing the chain nearly 20 percentage points ahead of the average.
Those specific analytics that guide QuikTrip’s interviewing, testing and hiring process are confidential, but they are soundly based on hard research. “The stuff that’s not confidential is the same thing as everybody else: well-adjusted, nice, hard-working, happy people who are really driven,” Cadieux says. And QuikTrip, which has more than 800 stores in 11 states, is making the numbers work. In the covert portion of the mystery shop study, the retailer ran the board on questions around customer service. For example, 84% of QuikTrip shoppers said they were “greeted or acknowledged in a courteous manner” after entering the store, compared to the study average of 64.4%. It also scored 100% on employees in the revealed audit, joined by ExtraMile and Rutter’s, the 2017 and 2018 mystery shop winner. Another measure of QuikTrip’s customer-service strengths is how well it scored on the question “Would you recommend this store to others?” Based on the Net Promoter Score, a metric that measures consumers’ loyalty to a brand by having them rate their willingness to recommend it on a scale of 1 to 10, QuikTrip received more 9s and 10s than any other retailer. Maverik and True North Energy had the next highest scores. That’s significant, says Cameron Watt, president and CEO of Ottawa, Ontario-based Intouch Insight, which conducts the mystery shop on CSP’s behalf. In the CSP Intouch Insight Mystery Shop, shoppers are not necessarily regular customers of the brands they are visiting, Watt says. But the fact that QuikTrip scored so high with these shoppers is considerable, “because you create customer loyalty one customer at a time,” he says. “If a person goes there and they enjoyed the experience enough at your brand, even though they usually shop at another brand, and they’d be willing to recommend you, I think that would be very highly correlated to your ability to drive customer loyalty,” Watt says. For its part, QuikTrip is most interested in how its customers weigh the individual variables of the c-store shopping experience. Its internal mystery shop assesses employees’ ability to hit these needs, and a large percentage of their compensation is based on their performance in this measure. “We’re more interested in the individual levers that you pull,” Cadieux says, “and making sure that we’re repeat-performing on each of those.” Making a positive impression in the context of the quick in-and-out c-store shopping occasion does not require a highly sophisticated formula, Cadieux says. “Great customer service in our channel is: ‘I don’t want to be here anyway as a consumer. I didn’t have time for this, so be genuinely friendly and make my experience not too horrible and get me the hell out the door as quick as you can,’ ” he says. Consumers’ expectations for c-store service may be modest, but for a retailer to consistently hit the mark on friendly and fast with nearly every transaction is a triumph. Ensuring a high batting average means hiring right the first time. QuikTrip pays above the market average, and it conducts pay surveys to ensure it stays competitive. But if the application numbers sag, the answer isn’t necessarily to get in a wage race with other operators, whether they be other c-store retailers, restaurants or big-box operators. “We generally look at it more as a supply and demand problem,” Cadieux says. “If our application flow is getting too low or the quality of our applicants is getting too low, then it doesn’t really matter where they went—we’re doing something wrong. And it doesn’t really matter what someone else is paying if our application and quality flow is still really high.” QuikTrip continues to hire a “tiny, tiny fraction” of those who apply for a job. “We’re able to hire the people that we want to hire,” Cadieux says. “That hasn’t changed.” While QuikTrip has stayed close to its formula for hiring, it continues to look for ways to reduce friction for its store employees. “Essentially, we are trying to figure out what it is that we do that gets in their way. What do we do that makes their job more difficult to do? What do we do that creates more bureaucracy or friction?” Cadieux says. Many of these impediments are old policies or procedures that have since proven unnecessary. Finding them is as simple as an employee asking, “Do we still have to do this?” Beyond these efforts to weed out defunct procedures, QuikTrip is also continually working to improve the efficiency of the retail machine. Its use of algorithms and predictive analytics goes back nearly three decades, when it first established an internal team of analysts whose core focus is to improve QuikTrip’s understanding of how its stores operate best and to provide actionable information to employees. This includes optimum staffing, inventory and in-stocks. It’s something that QuikTrip considers a core competitive advantage. “Anything over or under in inventory is lost opportunity and money,” says Cadieux, “and so if we can recapture that with math, then that means we can pay our people more, one way or another.” For this year's mystery shop, shoppers were asked: Would you recommend this store to others? This question is a spin on the Net Promoter Score (NPS), which indexes a consumer's willingness to recommend a business to others on a scale of 0 to 10. Nearly 88% of shoppers rated their willingness to recommend QuikTrip to others as a 9 or 10. When it comes to reducing the friction of the c-store shopping occasion, much of the industry’s attention is fixated on the customer’s perspective. The rise of Amazon’s Amazon Go cashierless store—as well as the many other technologies that aim to smooth over the store visit—has forced the discussion. (Click here to read more on frictionless retail.) QuikTrip is studying frictionless technology. “If it improves the customer service experience, if it reduces friction associated with the consumer making a purchase from us, then we’re deeply interested,” Cadieux says. However, the company has not yet found the answer when it comes to handling the transaction. “Most of the solutions that we’ve seen are not really about reducing friction—they’re about reducing man-hour costs,” he says. Cadieux has visited Amazon Go, and QuikTrip’s people have met with Amazon’s people to learn more about its approach. “From a design standpoint, I think that it is a good example of a frictionless solution if you are a noncash customer,” Cadieux says of Amazon Go. “I really worry about the [societal] impact of alienating cash customers. That’s the very part of the population that feels disenfranchised in many cases to begin with.” That said, QuikTrip’s IT team is “working feverishly on it,” he says. “So I do believe that either we or someone will come up with a better solution than what exists today.” More from CSP's 2019 Mystery Shop: Getting the Most From Employees Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.A Positive Impression
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