Category: Mystery Shopping

 

This has been an ongoing debate recently, about increasing minimum wage and raising wages for those jobs that currently see lower pay. While a bulk of the conversation revolves around being able to improve the cost of living, there is speculation that increased wages will ultimately lead to improved customer service, which will in turn lead to better sales and revenue. Sounds like a win-win situation, but is it true?

Recently, McDonald’s made news by sharing an increase in sales. In addition to new menu items, and breakfast being served all day, this is also being attributed to higher wages. Similarly, Walmart announced earlier this year that they were giving widespread raises to their staff.

While this seems great on the outset, it comes with some drawbacks.

• Staff may see less hours, or staffing levels may change to accommodate the higher wages paid out.

• While additional benefits may be seen (McDonald’s is offering five paid vacation days in addition to the higher wages), some may be taken away. For example, Walmart offered paid holidays to their staff; with the new changes, they now need to use their PTO if they would like to be paid for the holidays.

• Product prices, in some cases, may have to go up to accommodate the additional spend on employee wages. While this has not yet been noticeable in either company, it may be something that happens slowly over time.

But does increasing wages really account for improved customer service? Not by itself, it doesn’t. What it can do is create opportunities to motivate current employees, have a larger candidate pool to select from, since the higher wages may encourage more people to apply, and set the bar for customer service.

That last point is pretty important; you can pay staff as much as you’d like, but if they’re the wrong fit for the job and/or they are not trained properly, it’s money wasted.

Both McDonald’s and Walmart upped the ante when it comes to training when these wage increases went into effect. At McDonald’s, the company is trying to improve accuracy at the drive thru while speeding up wait times by incorporating the “ask, ask tell” training method. Walmart has always regularly had employees engage in continued education and testing through a computerized system. Shortly after announcing the company-wide pay increase, they announced the addition of Walmart Training Academies. It appears that this will eventually replace their current computer based training and will give more in depth information to new hires.

If you’re thinking that you should raise wages to get more from your employees, improve customer service, and potentially increase revenue, step back for a minute and think about your current culture:

• What is the general sentiment of your staff? If you don’t know, ask them. Employee feedback is a great place to start. If you have a bulk of your staff who have the attitude that they would work harder or better if they are paid more, then there are other issues to deal with besides increasing wages.

• Do your employees feel valued and motivated to do better? It’s not always about money, though that is a huge driver. Do you reward employees for strong performance, promote those who work hard and provide strong service? Instead of a company wide wage increase, you may want to consider a strong incentive and/or promotion program. Finding the good employees and keeping them over a long period of time with room for growth will be invaluable.

• Is a solid training program in place? It would be interesting to see if there were improved customer service reports for McDonald’s and Walmart had they revamped their training program without increasing wages. However, having a strong training program in place can go a long way in giving employees the best chance for success.

• What would a company wide wage increase mean for the company? As we saw with Walmart, there was a give and take and there were some benefits that were lost or revamped. This is to be expected, so it’s good to think through all aspects of employee wages and benefits before rolling out a new wage program.

As more pressure is put on employers to increase wages, this conversation will need to happen sooner than later. To improve service, however, it all starts at the bottom – hiring the right people, providing strong training, and creating a positive work environment with room for growth and recognition will go farther than a company wide wage increase.

That’s what happened in one Domino’s restaurant location in Salem, Oregon recently.

Employees became familiar with the customer as he ordered from them on a regular basis. After some time, employees noticed they hadn’t seen an order from him in some time. This prompted them to make a visit to his house and subsequently called 911 when the customer didn’t come to the door. They ultimately saved his life, and he is currently recovering.

This is a great story and shows great compassion in employees for their regular customers. It reminds me of our local pizza place – every Friday for as long as I can remember was “pizza day” at my house. My dad called in around the same time every Friday, and over the years it got to the point where the pizza place had caller ID, so they’d greet him and let him know it’d be ready soon. He didn’t even have to restate the order.

He battled cancer a few years ago, and he died on a Wednesday. The Friday before, he was still determined to go about life as normal as possible, even though he was in a very weakened state. I was at my parents’ house and offered to order for him. He wouldn’t let me, and told me how well they knew him there. He had the biggest smile on his face when he placed that order and said that it made him feel important that they knew him so well.

I went and picked up the order, and the young girls at the counter immediately asked where he was. I shared that he was very ill and was not up to driving. They sent well wishes home with me.

A couple of weeks later, we got a call from one of the employees. They said that they were in the night I picked up the pizza, and haven’t heard from us since, so they were checking in on my Dad. I had to share the bad news, and they felt really bad. My mom received a sympathy card from the restaurant a short while later.

Of course this is not possible for all loyal customers, but it goes to show the importance of customer loyalty and appreciation – while we have not ordered pizza from that restaurant in some time, I will never forget that experience; I’m sure the Domino’s customer and his family feel the same.

 

I remember when my three children were young and we would venture out to McDonald’s. This would often times be in the dead of winter, since they offered a Playland where the kids could burn off some energy and I could get a small break. I recall the challenge of balancing a tray while trying to fill drinks, keep track of the kids, and find a seat. It wasn’t always easy.

 

It looks like McDonald’s knows that and has been making some big changes, or at least testing them out. One McDonald’s location in the UK is testing table service at their restaurant, along with 13 others across the UK. This follows other trial runs that were done late last year in US locations, including some California locations.

 

The main idea was to alleviate the stress of trying to find a table while walking around with a tray of food, especially so for parents like I was back in the day. There are other benefits to the change as well:

 

• Customers can place orders at digital kiosks for more efficient ordering. Some locations are still taking orders at the counter, and others are offering both options.

• Table service will “force” employees to come out from behind the counter, which should lead to more customer engagement as employees are delivering meals and assisting customers at the ordering kiosks.

• Engaged employees can lead to better customer satisfaction, something that the fast food giant has struggled with over the last few years.

• While the initial impression is that self-serve kiosks may result in needing less employees, this could actually be the reverse, especially in locations that offer “traditional” ordering at the counter. Especially during heavy customer traffic, additional employees will be required to deliver meals, which could help create more jobs.

 

I’d anticipate that this change will slowly take over the chain in some capacity. There may be challenges to the new process, especially in high volume restaurants during a rush, but overall it appears that this could be a welcome change for McDonald’s. Listening to the voice of the customer and making adjustments based on this feedback is important, and it looks like McDonald’s knows that.