Hospitality – the friendly and generous reception and entertainment of guests, visitors, or strangers in which the host receives the guests with goodwill.
It is a common complaint that companies now provide a disappointing level of customer service. But merely providing good service is not enough for a business to be assured of success. In a superb article on the Skift hospitality website, 6 Basic Lessons in Hospitality From Danny Meyer, Deanna Ting summarizes a discussion held with Mr. Meyer at New York University in which he encourages businesses to go beyond service to providing customers with remarkable hospitality. Mr. Meyer is a renowned restauranteur and the force behind acclaimed New York based restaurants such as Shake Shack, The Modern, Gramercy Tavern, and Union Square Café.
Ms. Ting’s article reviews six lessons from Mr. Meyer on hospitality, which have broad importance for entrepreneurs. This post considers lessons for business owners from all types of industries from the discussion with Mr. Meyer at NYU and from his New York Times best-selling book, Setting the Table: The Transforming Power of Hospitality in Business. Mr. Meyer explains it this way:
“My appreciation of the power of hospitality and my desire to harness it have been the greatest contributors to whatever success my restaurants and businesses have had. I’ve learned how crucially important it is to put hospitality to work, first for the people who work for me and subsequently for all the other people and stakeholders who are in any way affected by our business—in descending order, our guests, community, suppliers, and investors. I call this way of setting priorities “enlightened hospitality.” It stands some more traditional business approaches on their head, but it’s the foundation of every business decision and every success we’ve had.”
1. Companies Will Benefit When They Act with More “HQ”
Mr. Meyer coined the term “hospitality quotient,” which applies when a person feels better about making others feel good. He believes six emotional skills make up HQ, which include: being kind and optimistic, or having hope; having an intellectual curiosity; a strong work ethic; having empathy; having self-awareness; and most importantly, having integrity. At NYU, Mr. Meyer stated that “Hospitality is a team sport,” and when the company’s employees have a high HQ, everyone benefits, including customers.
The importance of HQ goes well beyond the companies in the hospitality industry. When phone companies, financial service businesses, auto dealerships and other businesses make their customers feel like the company cares about providing them with a satisfying experience that can build lasting relationships. In 1990, Dallas best known auto dealer, Carl Sewell wrote his iconic book: Customers for Life: How to Turn that One Time Buyer Into a Customer for Life. Mr. Sewell included Ten Commandments for Customer Service, one of which touches on HQ: “Underpromise/Overdeliver: Customers expect you to keep your word. Exceed it.”
2. Do Not Sacrifice Quality to Provide Great Value
Mr. Meyer discussed the next big thing in restaurants and said, “It’s fine casual and it’s already here.” If fast food is the combination or speed and price, fine casual is the combination of “everything we know from fine dining” applied to the systems of casual dining. He listed examples of this successful concept as Chipotle, Sweetgreen, Tender Greens, Cava Grill and, his own brand, Shake Shack, which now has more than 90 locations in the US.
Ms. Ting points out that consumers want simplicity, as well as great value and quality for a great price. Those same customers want to receive value and quality outside the hospitality industry, as well. As just one example, Slate magazine published an article in 2007 titled: How Crocs Conquered the World The article included some memorable lines:
“In just a few years, the exquisitely ugly shoes known as “Crocs” have spread around the world like a Paris Hilton sex tape, giving rise to an epidemic of croc babies and their more egregious counterparts, croc parents. . . For such a modest item (a typical edition sells for $29.99), the Croc has traveled in high places, disgracing the extremities of such celebrities as Mario Batali (who prefers the bright orange variety) and George W. Bush (who paired them with shorts and dark socks).
What made Crocs so successful? “A first-time Crocs wearer will indeed find that the shoes are springy and light, as their fans aver, and cushion the feet with what some have called a “marshmallow fluffiness. . . Comfort and function were always the main Crocs pitch. “
Like them or detest them, Crocs provided customers with great value at a great price – comfort and function combined.
3. Customer Criticism Provides Valuable Feedback
Most of us do not enjoy receiving criticism, including entrepreneurs working stressful, long hours to create and grow their companies. But Mr. Meyer said he welcomes criticism, because without access to critique from customers, he would not have the information needed to improve the customer experience. Simply stated, avoiding criticism will deprive the business owner of feedback that is essential for the company to take the steps necessary to improve.
Ms. Ting points to research backing up Mr. Meyer’s claims and a recent study showing that hotels, which responded to customer reviews posted on the TripAdvisor app saw revenues rise, at least up to a point. The take-away is that business owners should solicit feedback from customers. Asking for criticism will help customers to become vested in the company. And just as importantly, the criticism received from customers will bring to light serious issues that can be fixed, but which might otherwise have gone undetected.
4. Employees Need to Be Motivated by a Higher Purpose Than A Paycheck
In a radical move for restaurants based in the United States, Mr. Meyer is attempting to eliminate tipping wait staff for the benefit of all of his employees. He also thinks this will benefit diners, but acknowledges the challenge. He has made this difficult decision because of his belief that “the only way to motivate someone is to give them a higher purpose beyond a paycheck.”
Tipping does not exist outside the hospitality industry, but giving employees a reason to commit to the company is an important consideration for all business owners. For employees to become vested in the company, they need to feel they are a part of something, they are trusted team members and valuable contributors. Business owner and entrepreneur, Gary Vaynerchuk, the CEO of VaynerMedia, shared his thoughts on the critical importance of employees to the success of the business in an article for Inc. Magazine.
“At VaynerMedia, we like to say, “Family first, agency second.” Your employees are important, because it is their skills that keep your machine running. I started VaynerMedia in 2009 with my brother, AJ; a handful of his closest friends became our earliest employees. Having taken two businesses from $3 million to $60 million in revenue, each in less than five years, I’ve learned that employee happiness and well-being come before everything else–including signing on new clients. This emphasis has allowed me to scale up the businesses and build committed teams as we continue to innovate. Read: Why Employees Are More Important Than Clients
Caroline Ng, a Managing Director at Virgin Management, said it this way: “You need to show that you actually want to invest in people and then they will stay and grow”. Leadership author and motivational speaker, Stephen R. Covey also makes the point simply: “Always treat your employees exactly as you want them to treat your best customers.”
5. Never Stop Striving to Get Better
Mr. Meyer was asked at the NYU presentation whether he considered himself successful, and not surprisingly, he said that he did not measure success in money. Instead, he said: “If you’re feeling like you’re finding your balance between your spiritual needs, emotional needs, and physical needs, that, to me, is success,” he said. He also said that there is always room for improvement, and referred to “the excellence reflex” which he described as “a natural reaction to fix something that isn’t right, or to improve something that could be better.”
Successful business people are on a continuous quest to improve. A business advisor, Matt McKeon, published an article titled Business Excellence on PowerLinx, and explained this constant need that entrepreneurs have to improve:
“In the business world, it is very easy to get comfortable with just being good. Being good at what you do means all is well, things are moving the way they are supposed to, and everything is under control. The financial equivalent of treading water however does not equate to success, but stagnation. In nature, as in business, it is always better to be proactive then reactive when striving for business excellence.” Read: 5 Ways to Continually Strive for Business Excellence
Thomas Edison’s inventions make him historic, but his refusal to be daunted by the lack of immediate success is equally notable. Struggling to create the light bulb, he stated: “I have not failed. I’ve just found 10,000 ways that won’t work.” This determination is a guidepost for entrepreneurs who stumble, pick themselves back up and find a new ways to achieve their goals.
6. Technology Should be Used to Make Us More Human
Commenting on the effective use of technology, when Mr. Meyer appeared at NYU, he was about to reopen his award-winning restaurant, Union Square Café. He reported that all of his managers and sommeliers would have Apple Watches synced to a new reservations system. The goal was to not just help the restaurant staff manage the incoming reservations, but also to provide a customer revenue management system and/or loyalty program that would store data to better serve diners. In this way, Mr. Meyer said that: “Technology should be used to amplify your ability to use your heart” and convey hospitality.
The role of technology from a customer facing perspective should always be to enhance the customer’s relationship with the business. Just a few examples of this are: mobile ordering; online banking and other commercial transactions; monitoring delivery of products/services; determining available parking spaces in garages, checking into hotel rooms with mobile keys and online checkout; returning products with automated shipping and account crediting.
A successful technology roll-out requires extensive pre-testing or the business may shoot itself in the foot. In addition, the company needs to alert customers to the startup of the new technology well in advance and provide them with robust support so that any glitches that crop up can be quickly and fully resolved to the customer’s satisfaction.
In Inc. magazine, Mr. Meyer said that great hospitality depends on two key elements, acknowledgment and recognition. Entrepreneurs can learn a lot from Mr. Meyer’s relentless focus on providing customers with an experience that makes them feel valued. In his words, “Hospitality will not succeed unless the person on the receiving end knows all the way to the bottom of their kishkes [Yiddish for “guts”] that we’re on their side. The definition of hospitality for me is the degree to which [the guest] feels that we are on their side, we have their back, we are their agent. Read: Celeb Chefs Danny Meyer and Tom Colicchio Dish Their Customer Service Secrets
In Setting the Table: The Transforming Power of Hospitality in Business, Mr. Meyer summed things up this way: “In the end, what’s most meaningful is creating positive, uplifting outcomes for human experiences and human relationships. Business, like life, is all about how you make people feel. It’s that simple, and it’s that hard.”
 Skift defines trends for global CEOs and CMOs across travel, dining, and wellness sectors through a combination of news, research, conferences, and marketing services.