In-N-Out Burger: Customer Value the Old-Fashioned Way In 1948, Harry and Esther Snyder opened the first In-N-Out Burger in Baldwin Park, California. It was a simple double drive-thru set up with the kitchen between two service lands, a walk-up window, and outdoor seating. The menu consisted of burgers, shakes, soft drinks, and fries. This format was common for the time period. In fact, another burger joint that fit this same description opened up the very same year just 45 minutes away from the first In-N-Out Burger. It was called McDonald’s. Today, McDonald’s boasts over 34,000 stores worldwide that bring in more than $88 billion every year. In- N-Out Burger has only 281 stores in five states, good for an estimated $625 million a year. Based on the outcomes, it would seem that McDonald’s has emerged the clear victor.
But In-N-Out Burger never wanted to e another McDonald’s. And despite its smaller size-or perhaps because of it- In-N-Out Burger’s customers like the regional chain just the way it is. When it comes to customer satisfaction, In-N-Out Burger beats McDonald’s hands down. It regularly posts the highest customer satisfaction scores of any fast-food restaurant in its market areas. Compared to McDonald’s customers, patrons of In-N-Out Burger are really “Lovin’ it.” Just about anyone who has been to an In-N-Out Burger believes it’s the best burger they’ve ever had. It comes as no surprise, then, that the average per-store sales for In-N-Out Burger eclipse those of McDonald’s and are double the industry average.
Breaking All the Rules According to Stacy Perman, author of a definitive book on In-N-Out Burger, the company has achieved unequivocal success by “breaking all the rules.” By rules, Ms. Perman refers to the standard business practices for the fast-food industry and even retail in general. In-N-Out Burger has maintained a tenacious focus on customer well- being, but it has done so by doing the unthinkable: not changing. The company’s original philosophy is still in place today and best illustrates the basis for the company’s rule-breaking: “Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment” The big burger giants might take exception to the idea that they aren’t providing the same customer focus. But let’s take a closer look at what these things mean to In-N-Out Burger. For starters, at In-N-Out, quality food means fresh food. Burgers are made from 100 percent pure beef-no additives, fillers, or preservatives. In-N-Out owns and operates its own patty-making commissaries, ensuring that every burger is fresh and never frozen. Vegetables are sliced and diced by hand in every restaurant. Fries are even made from whole potatoes. And, yes, milkshakes are made from real ice cream. In an industry that has progressively become more and more enamored with processing technologies such as cryogenically freezing foods and preparing all ingredients in off- site warehouses, In-N-Out is indeed an anomaly. In fact, you won’t even find a freezer, heating lamp, or microwave oven in an In-N-Out restaurant. From the beginning, the company slogan has been “Quality you can taste.” And customers are convinced that they can do just that.
In-N-Out hasn’t changed its formula for freshness. But in another deviation from the norm, it also hasn’t changed its menus. Unlike McDonald’s or Wendy’s, which introduce seemingly unending streams of new menu items, In-N-Out stays true to Harry Snyder’s original mantra: “Keep it real simple. Do one thing and do it the best you can.” This charge from the founder focuses on what the chain has always done well: making really good hamburgers, really good fries, and really good shakes, that’s it. While others have focused on menu expansion in constant search of the next hit item to drive traffic, In-N-Out has tenaciously stuck to the basics. In fact, it took 60 years for the company to add 7up and Dr Pepper to its menu. Although the limited menu might seem restrictive, customers don’t feel that way. In another demonstration of commitment to customers, In-N-Out employees will gladly make any of the menu items in a truly customized fashion. From the chain’s earliest years, menu modifications became such a norm at In-N-Out that a “secret” menu emerged consisting of code words that aren’t posted on regular menu boards. So customers in the know can order their burgers “animal style” (pickles, extra spread, grilled onions, and a mustard-fried patty). Although the “Double-Double” (double meat, double cheese) is on the menu, burgers can also be ordered in 3 X 3 or 4 X 4 configurations. Fries can also be ordered animal style (two slices of cheese, grilled onions, and spread), well done, or light. A Neapolitan shake is a mixture of chocolate, vanilla, and strawberry shakes. The list goes on and on. Knowledge of this secret menus is yet another thing that makes customers feel special. It’s not just In-N-Out’s food that pleases customers. The chain also features well- trained employees who deliver unexpectedly friendly service. In-N-Out hires and retains outgoing, enthusiastic, and capable employees and treats them very well. It pays new part-time staff $10.50 an hour and gives them regular raises. Part-timers also received paid vacations. General managers make over $100,000 a year plus bonuses and receive a full-benefit package that rivals anything in the corporate world. Managers who met goals are sent on lavish trips with their spouses, often to Europe in first-class seats. For gala events, managers wear tuxedos. Executives believe that the men and women who run In-N-Out stores stand shoulder-to-shoulder with any blue-chip manager, and want them to feel that way. Managers are promoted from within. In fact, 80 percent of In-N-Out managers started at the very bottom. As a result, In-N-Out has one of the lowest turnover rates in an industry infamous for high turnover. Happy, motivated employees help create loyal, satisfied customers. In fact, words like loyal and satisfied don’t do justice to how customers feel about In-N-Out Burger. The restaurant chain has developed an unparalleled cult following When a new In-N-Out first opens, the line of cars often stretches out a mile or more, and people stand in line for hours to get a burger, fries, and a shake. Fans have been known to camp overnight to be the first in line. When In-N-Out made its debut in Texas, one woman cried. “Pinch me, it just doesn’t feel real,” whimpered customer Danielle Deinnocentes, overcome with emotion as the reality of her new found proximity to the burger chain set in.