Back on Top

Kwik Trip takes CSP-Service Intelligence Mystery Shop crown for third time in four years.

Melissa Vonder Haar, Freelance Writer

Article Preview: 

When Kwik Trip fell from the top spot to No. 2 in last year’s CSP-Service Intelligence Mystery Shop, everyone there bristled.

“We asked ourselves, ‘How did this happen?’ ” recalls John McHugh, director of communications for the La Crosse, Wis.-based chain. For a convenience retailer that prides itself on store-level minutia and genuine customer rapport, such a stumble rocked everyone from corporate to the stores.

But that was last year.

Going from befuddled to bemused in a relatively short time frame, the 410-store Midwest powerhouse—known locally for its $1 Wednesday cheeseburgers, glazed doughnuts and fresh fruit, with a special corner on bananas—steered its operational aspirations back on track, and for the third time in four years took the top overall spot above eight other best-in-class competitors.(See story on p. 53.)

It’s no small feat considering that about 100 stores within each chain served these stealth mystery shoppers, who at any moment would have been assessing pumpisl and cleanliness, clerk sincerity and what restrooms looked (and smelled) like.

But Kwik Trip was more than up for the task. Whatever it did wrong last year seemed to fuel its already amped-up commitment to operational excellence. Managers tweaked their own quality control criteria to match those of the CSP-Service Intelligence study and zeroed in on out-of-stocks, customer service and cleanliness with a vengeance.

Pivotal cogs in this operational machine include the following:

An altruistic mindset. Vested in customer service from a position of both virtue and profitability, employees operate with a core value of “making a difference” in people’s lives. It’s a sensibility that guides everything from hiring to store behavior.

A commitment to being better. Another value tied to operations is being better than the day before. Healthy competition among store teams and against larger chain goals keeps employees on the pulse of the store, looking for ways to execute better.

A transparent path to profitability. Regular meetings from the district level down to store associates stress the strategies within the store. Foodservice goals, promotions and checkout times become moving targets that tie back to store profitability and, ultimately, take-home pay.

Of course, an almost unheard-of benefit from Kwik Trip certainly helps: A whopping 40% of pretax profits goes back to employees. It’s an unusual perk, even outside the c-store industry. And don’t forget the ownership stake in all of Kwik Trip’s real estate. For employees, it’s icing on an already lucrative cake. But the give-backs are only part of what drives employees, McHugh says. What’s even more important is knowing that Kwik Trip’s executive leadership is committed to the company’s future and takes active, thoughtful steps to ensure sustainability.

In recessionary times, employees need the reassurance that a company is in it for the long haul, he says, so at year-end meetings, executives spend time with board members and employees, reviewing capital expenditures, where new stores are being built and where improvement dollars are going.

“There’s no secrets with our strategic direction,” McHugh says, describing how Kwik Trip spent half a billion dollars over the past three years upgrading its support center, commissary and bakery.“We don’t need that capacity today, but the message is loud and clear: We’re doing it for your future.”

Perpetuating Culture

When asked to describe Kwik Trip’s culture, Greg Olson, the company’s vice-president of retail operations, talked about customer feedback and e-mails thanking them for the above-and-beyond service given at stores.

One sent just this summer spoke of how a customer locked her keys in her car. Kelly, a store associate, drove the customer home to get her spare keys, saving her money on a locksmith.

“We receive and share [with employees]these neat stories from guests, where they receive outstanding service, something above and beyond. … [An employee] helps change a tire, jump-starts a car, carries things out for them,” Olson says. “We have 5 million guests a week and we try to treat everyone right. We want to be the Nordstrom of the c-store industry.”

Its mission statement reads: “To serve our customer and community more effectively than anyone else by treating our customers, co-workers and suppliers as we, personally, would like to be treated and to make a difference in someone else’s life.”

In the mystery-shop category of customer service, Kwik Trip took the best overall score, which tallied proper greetings, cashier friendliness and how long people waited in line.

Cutting the wait is a priority for KwikTrip, McHugh says, and comments from mystery shoppers validate its efforts. Here’s what two of them had to say:

“After I got in line, two other employees came up and opened two more registers to help out. My cashier did suggest a dessert item to go with my soup and sandwich.”

“Although traffic at this location was very heavy due to the state track meet in town, the store was running in a controlled manner, and employees were focused on attending to customer needs.”

Being attentive to customers and prioritizing their experience: These are mantras that can’t be taught, says McHugh. He’s constantly asked how Kwik Trip trains for customer service. He says it’s simple: Hire the right person.

The first question they ask perspective employees is, “What was the last random act of kindness you did for somebody?”

The question goes to whether or nota person carries an attitude of kindness.“It means I can put them in the store and they’ll give guests attentive service,” McHugh says. “I can’t train that.”

Subsequent questions probe further:“How have you made a difference in somebody else’s life?” “How have you treated someone the way you’d like to be treated in the last six weeks?”

Questions then turn to passion, energy and team spirit—qualities that McHugh considers core competencies no different than entrepreneurship and empowerment.“We ask our people to run the store as if it’s your own,” he says. “They know the profits aren’t lining the CEO’s pocket. The magic is to increase customer counts and increase sales, and if you do that there’s more 40% profit sharing.”

Best Place to Work

It’s no wonder that turnover at KwikTrip—even at the store level—is extremely low. While c-stores as an industry normally hit triple digits, Kwik Trip is at 24%.

Certainly the recession and slow economic recovery have buttressed these numbers, but Kwik Trip is building a strong reputation regionally as an employer of choice.

For the second year in a row, the Milwaukee and southern Wisconsin focused Journal-Sentinel ranked KwikTrip No. 1 on its annual survey of best places to work. In a similar survey with a Minneapolis-based media outlet, the chain made the top 10.

Many applicants come in because of those rankings, McHugh says, citing how an online search of “best places to work” in its markets will bring up Kwik Trip.

The publicity and existing word of mouth may have already proven too successful, because Kwik Trip is typically inundated with applications. For 700 new jobs that opened recently, the chain received 100,000 applications. The human resources department had to update its software to accommodate the flood.

“What that means for us is that we can be picky,” McHugh says, again pointing to the workplace ranking and word of mouth as effective recruitment tools.“One hundred thousand wasn’t the case five years ago.”

Getting Specific

Still, beyond the basics of finding the right people, execution is a matter of specifics, McHugh says. He compliments Olson and his team of district- and store level leaders on continually communicating the core values and the specifications that must occur at the store level.

The company has a “guest services checklist” that McHugh says mirrors many of the CSP-Service Intelligence Mystery Shop criteria. And at district and store-level meetings, those goals are actually read aloud. “That’s at every single meeting,” he says. “It sounds repetitive, but it’s important.”

Another part of that ritual is reading out loud 10 customer-service compliment letters that the chain receives.“Goodness begets goodness if they can see it in action,” he says. “It reinforces that we’re all about those scenarios.”

At the store level, required action sand the strategies behind them are clear, says Christina Hanson, a store leader in Dodge Center, Minn. She speaks of customers being the first priority and the importance of opening up a new register when lines start to form. Next in importance come the strategies—product variety, promotional price point and margin setting—behind the foodservice and the store’s “red zone” of hot, high-margin items. Then comes the importance of the company’s vertical integration and how that helps with value pricing.

The game gets very specific, with certain products earning the store more points than others, she says. Those points lead to store rankings for top sellers as well as highest percent increases. One-hour weekly meetings with each of her shift leaders reinforce the messages and secure time to assess what the team can do better.

“Especially for a small town, we’re known for our customer service,” she says. “You know you’re not going to standing line, that we have superior products here at a value price.”

Food Means Clean

The leadership at Kwik Trip believes in simple math. Specifically, customer service plus cleanliness plus merchandising equals a viable, profitable business.

The details behind this equation, however, are anything but simple. When the company embraced foodservice a decade ago, some things changed.

“We had to have a new definition for the word ‘clean,’ ” Olson says. “Whether it’s the sales floor or the restrooms, if the guest pulls up to the dispenser and it’s not clean, they won’t have a good feeling for our food.”

The challenges are apparent, he says. Servicing the hundreds of people who visit the stores daily means floors get dirty, lines start to form and shelves start to run low. Preparing the store’s red-zone foodservice areas for morning, noon and after-5 p.m. rushes becomes critical. And employees are constantly multitasking.

Headsets help. All employees have them in case a new register has to open or a customer spills a cup of coffee. “It’s a fast pace,” Olson says. “And we expect a lot.”

Internally Motivated

Having a team mentality is also central to execution, says Layne Froehlich, a district leader for Kwik Trip. The need to have committed individuals even during graveyard shifts is mandatory, so part of the recipe is finding people who want to be a part of a “winning” store.

To that end, Froehlich says everyone is numbers-driven, keeping tabs on what’s selling on a daily, weekly and monthly level. The transparency gives people focus, making the team hyper-aware of when they have to push harder.

“Everyone’s got their thumb on [the business] all year,” Froehlich says. “My stores do a huge business with tourism over the summer. They know that come the beginning of May is our busiest time and they know if it’s a good profit at the store week in and week out.“It’s the difference between being secretive and having open communication, where everybody knows how we’re doing. That’s what motivates people.”

Climbing Back to the Top

Falling from No. 1 to second place in last year’s mystery shop gave Kwik Trip are newed mission: Get back on top.

Its strategy? Review the specifics of where the company fell short and then “ramp up the dial,” according to Greg Olson, vice president of retail operations for Kwik Trip. The company bought the data and looked at where it lost points. It already had an “Are you guest ready?” checklist that store employees walked through three times a day, but they took even greater care with those reviews.

The one change the company did implement was with its interstate locations, where traffic is heaviest. Restroom checks were already being done every hour, but with a renewed focus on interior and exterior cleanliness, Kwik Trip execs decided to increase those checks to every half-hour.

“[Studies] like these make you realize that sometimes you’re not as good as you think you are,” Olson says.

Click here to download full article