Last week we sat down with industry leaders & Black Box Intelligence (formerly TDn2K) friends John Kelley, CPO and Kim Bartley VP of Marketing at White Castle, on our quarterly webinar series. Our time together tackled the current landscape, challenges and the new cycle of growth and opportunity being experienced by the industry. We reflected on Q1 results and shared a few expectations for Q2. John & Kim shared their insights and a few best in class practices that earned White Castle the 2015 Diamond Catalyst Award*.
Highlights from Q1 Restaurant Industry Performance
- Q1 at 2.8% – best quarter since recession. First time we’ve had two consecutive quarters of comp sales growth over 2.0%.
- Traffic continues to be a huge challenge for restaurants. – 0.6% is the second best quarter in the last two years (the best being the previous quarter)
- Fast Casual is winning the market share battle, posting 3.1% same store sales growth in Q1
- The economy & labor market improving are great for restaurant spending, but also making things much harder when it comes to recruiting & retention. 75% of hourly and management terminations during 2014 were voluntary (see more insight from the 2015 Recruitment and Turnover Report)
- Casual dining is the best performing segment in terms of positive food social mentions. Best performing segment for service and intent to return mentions was Upscale Casual in March.
Q: How do you use data to determine success at White Castle?
A: Kim: We use several different data sources to evaluate performance including Workforce Intelligence (formerly People Report) & Black Box. In addition we look at integrating IVR (interactive voice response) data (about 600,000 data points) from White Castle customers.
As we all know, what you measure gets done, and we’ve seen continued years of success by publishing to our restaurant managers how they are performing and how customers are feeling about them.
John added: We also conduct surveys among our team members every other year to judge engagement. This helps us show our operations group where we have better training, more engaged team members, where we do a better job hiring, etc… all leading to better performance.
Q: We love the statement, “what gets measured, gets done” at Black Box Intelligence (formerly TDn2K), we totally agree. Do you think benchmarking helps drive accountability in a company? Any examples you are willing to share?
A: Kim: As a 95 year old brand, benchmarking has helped reinforce that we have to pay attention to what’s happening in the marketplace. We can’t rest on our laurels; especially in this highly competitive industry. Benchmarking helps us understand if we are outperforming during bad weather, for example, or if we have to evaluate on a market level or system basis if there is a specific area of improvement to focus on. Benchmarking also helps rally the troops, around being competitive which is really important for us.
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Q: As a 95 year old brand, culture must really matter at White Castle. What steps are you taking to ensure your culture is one that retains employees?
A: John: We are lucky to have the culture we do. Like any culture it has evolved and changed over time. We have a lot of programs for our team members including “National Hamburger Month” which we are excited to talk about a little later as well as a “25 year club”. Members of the 25 year club are brought to the corporate office, wined and dined, driven around in limos and even given a gold watch!
Kim adds: I joined the “25 year club” last year and really believe that one of the hallmarks of White Castle culture is that it really cares about its team members in terms of development & opportunity. We are a family beyond the family that owns us, which makes our culture very special.
Q: Is the long history of White Castle ever an obstacle?
A: Kim: I think the biggest obstacle of a culture that’s been around a long time is trying to hold on to what has made the company successful while recognizing the need for change. Our values, openness and positive culture allow us to tackle it together and tackle the obstacles. Fundamentally, hard work gets you where you need to go.
Q: How closely do you evaluate turnover? How has White Castle responded to the higher turnover being experienced by the industry?
A: John: in the late 90s, we were at the other end of what the rest of the industry was experiencing when it came to turnover. As Kim and I started working closely together we really started to recognize the value in what each other’s departments were doing and especially the need to listen to our team members. We strive to really listen to what they need and deliver on that. The team members are our customers, so fulfilling their needs is important.
Q: How do you handle social media among your employees?
A: Kim: The first thing we do is recognize that it’s social media guidelines that we have to have versus policies; and those are consistently being revised because of the pace of change. From a marketing standpoint, we evaluate what the impact on the customer is as well as the impact on the employee. John and I and our teams work together a lot to understand the new world around us – you can’t separate the two. The projects that we are currently working on aim to enhance the two.
Q: What are the people metrics you have found to be the most predictive of financial performance?
A: John: Aside from the obvious people metrics we all track, we are closely tracking the people that are staying and trying to do more with retention rather than turnover. For example we do a 90 recognition because we’ve learned that 90 day retention is pretty good indicator that they’ll stay two to three years.
Q: Last but not least, tell us about National Hamburger Month!
A: We have celebrated National Hamburger Month at White Castle for over 20 years. It started in the Marketing department as a way of getting the marketers out into the restaurants and behind the counter to understand the impact of how marketing ideas are executed across the counter.
It then evolved into our entire home office participating every May. Our entire home office goes out into the castles here in Columbus. We even have some of our vendor partners to take part too! They work a shift at White Castle and can really appreciate the people who everyday create the memorable moments for our guests.
Speaking of participating vendor partners, Wally – you in?
Wally will be participating in National Hamburger Month next month in Chicago. Stay tuned for that blog… and those photos!
*The Diamond Catalyst Award recognizes superior performance in operational and workforce results. More on that here.