Money for marketing or manpower?

Dec. 5, 2005

Editor's note: This article originally published in a longer form on as MARKETING: Money spent on star employees is a great marketing investment.

I love In-N-Out Burger. Know why? Because the service is so outstanding.

It's just fun to watch the staff ...everybody hustling ... orders coming out quickly ... employees smiling.

One day I decided to find out how they managed to get their hands on these fantastic employees. So, I called In-N-Out corporate to see if they would tell me.

Nothing doing, they said.

This, of course heightened my resolve to find out their secrets — which I did — when I called an friend who'd once had been an In-N-Out manager. And under the promise of not revealing his identity — he agreed to spill his guts and tell me everything. We'll call him "Mr. X."

The secret to good employees

When opening a new In-N-Out, they hang a banner on it that reads: "Now Hiring — Starting at $8 an hour." (Of course the hourly rate changes over time, but they always pay more than everyone else.) This floods them with applications, which then positions them to choose from the cream of the employee crop.

What's the No. 1 thing they look for in an applicant? A smiling face! That, Mr. X told me, almost always translates into a positive attitude. And when you combine that with a clean-cut look (no side-burns or tattoos or facial piercings) you've got a winner. He also tells me "even if they're not the 'sharpest tool in the shed,' they'll still hire someone who smiles and shows a high energy level over someone who doesn't."

In-N-Out Burger also runs their operations "like the military," he added. There are policies and procedures galore. Training is ongoing, and there's a checklist for just about everything. They encourage employees to bring in friends to apply because birds of a feather flock together. Employees also can advance as quickly as they want. Once they've mastered one task — they can move up the ladder. Pay raises follow.

Most people I talk to would love to devote more time to marketing. But they constantly have to deal with employee issues. But because In-N-Out Burger pays better than everyone else, they can choose the best: only smiling, friendly, clean-cut people.

And get this: They hardly market their business! The experience is so good, customers just naturally keep coming back!

How do pizzeria operators use this information? If you currently spend $1,500 a month on advertising to keep replacing lost customers, could you simply hire star employees and — maybe — cut back on your advertising because you aren't losing as many customers?

Would your life improve because you had friendlier, more dependable, employees?

Moral of the story: If you are constantly wishing you could use a bullwhip on your employees and also forking over big dollars to keep the phones ringing, maybe you can test diverting some of your marketing dollars to higher pay for some really outstanding employees. And that would solve two problems with the same dollars spent.

Topics: Commentary , Operations Management

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