Talk about an upset!
Had Vegas placed odds on the 10th annual CSP/Service Intelligence Mystery Shop, Cumberland Farms’ unseating of two-time defending champ Kwik Trip would have been as preposterous as the long-cursed Boston Red Sox winning the World Series before 2004.
Much like its hometown team, the Framingham, Mass.-based chain readily admits it had not kept pace with the best of the pack.
“Most of our stores were built in the ’80s and early ’90s. It had been nearly two decades since we did anything really big to our stores,” says Randy Boutell, a store manager of 25 years.
Amid constant threats of takeovers, plus battling the universally declining spiral of cigarettes and gas, the Cumberland Farms of 10 years ago, despite its scale as the largest c-store chain in New England, was a midlevel performer in industrywide rankings such as the mystery shop. Click here to see the mystery-shop results.
So what changed in 2014? A conscious reset, not just in operations, but also in culture. With a new store prototype that shifts attention from tobacco to foodservice and a genuine companywide philosophy that puts associates first, Cumberland is undergoing the kind of transformation rarely seen among larger chains.
“There’s a dramatic change that’s felt from top to bottom,” says vice president of marketing Gwen Forman. “People get a bit of a high [when] you know you’re going places.”
Boutell agrees. “It’s a whole different business now,” he says. “Seeing us at the top of the awards list, instead of the middle, it just shows what we’ve achieved as a team over the last five or six years.”
It was six years ago that Ari Haseotes took the reins as president of Cumberland Farms. While Haseotes (who recently added the title of CEO of Cumberland Gulf Group) set the pace, for him, success begins and ends with the Cumberland team. Were it just about him, Haseotes would keep quiet.
“As a private company, we tend to shy away from media attention,” he says. “But frankly, I couldn’t pass up the opportunity to showcase the great work of our team. It feels really good to be able to have them get some credit for the tremendous work they do.”
The following is the story of how one chain, long considered standard and “in the box,” is working to create a team-first business culture that portends an auspicious future.
CONTINUED: The Power of Positivity
The Power of Positivity
Changing the philosophy of a historic, family-run company—especially one of Cumberland’s size—is no easy task.
“We’re 75 years old,” says customer service manager Jamie Hill. “[But] five years ago, [we recommitted ourselves] to offering exceptional service. And we’ve taken that direction.”
But before that, Cumberland thought first about its 5,550 workers in the stores. “We’re trying to change our culture to be team-centric for them to believe in being customer-centric,” Forman says.
That means emphasizing the positive. Boutell recalls that, in his earlier years with the company, scoring 23 out of 25 points on an internal mystery shop would prompt superiors to fixate on the two points missed. “That was just the culture and how things were done,” he says.
It wasn’t so much a negative focus but a different way of looking at things, Haseotes says: “Our people for so long were conditioned to fix problems. They’d see something wrong and want to attack it.
“It’s less due to any desire to be negative, and more to fix an issue. But when you do that, and you don’t ever talk about the positive, it really comes across that you only point out the problems.”
That’s something Cumberland is working to change. “Now it’s, ‘Wow, you got 23 out of 25! Great job!’ ” Boutell says. “There’s definitely been a shift. We’re in a much more positive direction.”
The philosophy plays out in the store. When there is a problem or employee error, it is tackled on the spot. “When we do see something negative, we don’t leave the store without addressing it,” says Haseotes. “We try to treat the staff with dignity and respect.”
Haseotes learned this lesson years ago when he was running a store. Some senior executives visited his location and, upon seeing he was out of a certain grade of milk, they reported Haseotes to his superiors.
“I felt somewhat humiliated,” he recalls. “Had the executive asked me, they would have found out that the ordering system wasn’t working; I’d followed it to a tee. But I wasn’t given the opportunity to have that exchange.”
Such a scenario is unlikely to play out under the current atmosphere. “Now,” says Boutell, “when people make mistakes, there’s a little jabbing, but they realize it’s a fun environment and it’s OK to do something wrong from time to time. Throw it in the garbage and move on. It’s about getting people to the right level and not worrying about the mistakes they make along the way.”
Though Boutell describes this shift as one that started at the top, Haseotes is quick to give credit to the store associates, the shareholders and the board of directors. “It’s more about our people than me,” Haseotes says. “My role is to help establish goals and give them the tools and the resources needed to make it happen.”
CONTINUED:Attracting and Keeping Talent
Attracting and Keeping Talent
Corporate aphorisms are trite unless manifested at the store level. That is the beauty of the mystery shop: Your worst employee can sink your best intention.
It should come as no surprise, then, that Haseotes lists Cumberland’s team members as the company’s biggest focus moving forward, a focus that extends beyond just competitive compensation, encapsulating training, benefits and engagement as well.
“We believe in the philosophy that, as the company wins, our team members should win,” Haseotes says. “We’re looking for discretionary effort out of our people, and we think performance at that very high level should allow them to participate in the prosperity of the company.”
Or as senior vice president of retail operations Dave Merriam puts it, “For us, it’s all about, ‘Happy employees make happy customers.’ ”
Some of the bigger incentives in recent years include monthly bonuses based off internal mystery-shop performance (something Boutell calls “free money” for his team) and an unheard-of policy that gives even part-time employees the benefit of paid time off.
These kinds of perks have made it easier to recruit solid employees—and retain them.
“With all the competition in town, it’s not just about getting the right employees, but keeping them,” Boutell says. “While everyone’s paying the same rate, we have so many more benefits in place now that help keep them.”
“We put money where our mouth is,” Merriam says. In 2013 alone, Cumberland paid out about $10 million in store incentives. “Depending on the stores, team members can earn a substantial increase in their hourly rate, so they’ve got a lot of skin in the game.”
Then came the big news: While much of the retailing world lambasted Obamacare—more formally known as the Affordable Care Act—and aggressively pared down employees’ hours, Cumberland Farms embraced it.
In spring 2013, Haseotes went on record to say that Cumberland would expand its health benefits package.
“That’s something not too many people on the street have done,” says Boutell. “A lot of retailers went the other direction; they cut everybody back. When you’re making $8.50 an hour, losing one shift is a big deal.”
And the employees have taken note: In 2013, 80% of Cumberland’s employees were considered full time, with 20% part time; today it’s closer to half and half, with about 35% of employees now receiving health-care benefits, Merriam says.
Beyond the compensation is the communication hierarchy. Perhaps hearkening to Haseotes’ earlier experiences as a store manager, store associates are given multiple opportunities to share their perspectives and ideas to better the company.
“A lot of things are learned from our people. They’re the ones actually working the stores,” says Paul Freeman, vice president of retail operations. “We encourage our people to tell us like it is.”
A major outlet for this communication has been the Cumberland Farms blog. Started several years ago, the blog features posts by Haseotes and other top executives on a variety of issues. Also, employees across all levels can start a conversation on a given issue through the blog’s comments. And they have.
“It’s a great tool to find out quickly if there is something that’s affecting a lot of the team members out there,” Haseotes says. “People have challenged me directly on the blog. We’re not afraid to cover the good and the bad in those blog conversations.”
One team member, for example, brought up the issue of leaves of absence and the effect they have on incentive pay. Haseotes recalls that, via blog comments, several associates voiced dissatisfaction with the policy and thoughtfully broke down why it didn’t make sense.
“I remember reading it and going, ‘Boy, we’re really doing that?’ ” he says. “We discussed it as a team and agreed it had to change. There have been many examples of this happening, where we’ve revisited a policy or procedure and made a change for the better [based on commentary].” Store associates are also encouraged to share feedback face to face.
“After a new store is opened, the management team does a kind of post-audit,” says Freeman. “We poll the employees about what we could make better or what we could make easier.”
Ideas big and small are considered, something as simple as changing the size of the wastebaskets in the coffee area because customers tend to dump liquid into those receptacles. It’s a little thing that will save the employees at Cumberland’s newest Auburn, Mass., store a big mess, and the kind of insight Haseotes calls “invaluable” to operations.
It also shows employees at every level that their views are important. “It’s great when my associates are not only heard,” Boutell says, “but also see that change.”
This communication is so valued at Cumberland that the personal cellphone numbers of every executive, including Haseotes, are made available to every employee.
“I can tell you that, in six years, you could count on one hand the amount of calls I’ve received directly from someone in a store,” Haseotes says, chuckling. “And in at least two of those occasions, it was a bet that I wouldn’t actually answer or return the call.”
“We don’t just do it to feel good,” Merriam says of the communication push. “It’s functional for us to feel what’s going on in the stores and get back to the stores. We want team members to have access to management, and we do what we feel we can to communicate our direction to the company.”
More than that, it goes back to the optimism-first philosophy. “If you treat people like they make a difference and are responsible, they actually will make a difference and be responsible,” Haseotes says.
Whether with benefits you can see on paper (such as bonuses and health care) or the less tactile benefit of a respectful work environment, these efforts are paying off.
“In the last several years, we’ve seen a significant drop in turnover; people are getting stickier,” Merriam says. The company this year and last has had only a 10% turnover rate for its approximately 600 store managers. “If you have stability there, and you’ve got good store managers who attract and retain good people, you’re always going to have good customer service. You’re not in a constant training mode and can rectify problems that arise.”
Haseotes credits the employee-centric programs for the lower turnover rate, as well as the company’s improved ranking— and promises there’s more on the horizon.
“That philosophy of hard work, perseverance and humility is all a part of the family’s heritage,” he says. “It very much applies to the philosophy that says we focus on hard work and efforts of our people that are meeting and greeting the customer every day. If we take care of them, the business will thrive.”
CONTINUED: Managing and Measuring
Managing and Measuring
Akin to any successful franchise, Haseotes views Cumberland’s executive team as the behind-the-scenes managers, looking to the data and stats to ensure the team’s success at the field (or store) level.
“We stand true to the philosophy that what gets measures gets managed,” he says. “We hold ourselves responsible.”
Based on Haseotes’ previous comments, it comes as no surprise that employee engagement ranks as one of the most crucial stats being tracked by Cumberland’s data gurus.
“Engagement is the most meaningful part of what I’m measuring,” says Haseotes. “I hold myself and all of the leadership team here equally accountable. A huge chunk of how I’m measured is engagement.”
When employee engagement is high, it pays out for Haseotes and the leadership team, as well as the store associates: It was through engagement surveys that bigger issues (such as health care) and smaller but important issues (such as an employee discount card) are fleshed out and brought to fruition.
“These are programs that cost us millions of dollars on an annual basis, but our team members have said they’re very important to them, and we listen,” Haseotes says. “We hear they appreciate it and have seen improvements in our engagement levels.”
Cumberland Farms believes these improvements to employee morale have had a direct effect on the consumer experience. “If you invest in employees, they’re happier, more proficient at their jobs and deliver service that makes the customers happier,” says Forman. “You can have the best marketing [strategies], but the customer experience is where the rubber meets the road, and the impression is created when the customer and employee interact in the store.”
It’s a truth the data backs up, evident in Cumberland’s impressive mystery-shop scores, along with its own internal metrics. Besides twice-monthly company mystery shops of every location, in which customer service manager Hill says 12 different questions are measured, there are also mystery audits by area sales managers and regional managers to cover food safety and operational standards an everyday guest might not notice.
Embracing the best of 21st century tools, Cumberland is now leveraging technology to encourage its consumers to share feedback, such as a new “GSAT” online survey for guest satisfaction that mirrors the questions asked in internal mystery shops.
Merriam says that as many as 7,000 GSAT surveys have been filled out in the past three months, with links on gas receipts and QR code promotions directing customers to the website.
“If the mystery shopping is coming back high in greetings but we don’t see that in customer data, we’re not measuring the right thing,” Forman says. “And we want to be really clear about measuring things that truly impact the customer experience. In order to balance that procedure, we go to the customer and ask them what they think.”
These metrics help the company gauge the modern customer, as well as the bigger picture over time, extending from larger issues of performance to the value of a simple hello.
“Is it important to guests, or do they just not want to be bothered?” Hill says. “We took a pulse from our guest satisfaction survey [on] how important it is to be greeted in any retail establishment. In my opinion, it was important, but opinions vary; 85% of guests expressed it was important or extremely important. We brought that information to the field.”
From 2011 to 2013 (when the “greeting” statistics were shared), Cumberland Farms went from having 17% of its customers describe store associates as “completely” knowing and greeting them to 33%, Forman says. There’s certainly room for improvement, but “the key is that it’s doubling. It says to me we’re making good progress there.”
Perhaps unlike a sports team, Cumberland also collects stats on its off-the-field executives. “Just as we do mystery shops and consumer surveys in the stores, we have a whole bunch of people who have internal customers,” says Haseotes. “Every department is dealing with another department, the field staff or the stores, so we give our ‘internal customers’ the chance to effectively do a mystery shop or evaluation of every department.”
These measurements, dubbed “succeed together” surveys, are conducted throughout the year to evaluate how various teams within the company are providing service to their “internal customers.”
“To me, it’s only fair,” Haseotes says. “We’ve put a lot of emphasis, even a lot of compensation, on the stores’ ability to deliver to the consumer. We want to do the same thing internally.”
CONTINUED: A Whole New Ballgame
A Whole New Ballgame
These measurements have proven all the more vital as Cumberland Farms has embarked into the unchartered territory of foodservice.
“Five years ago, if you ever told me I’d be selling mozzarella sticks, I never would have believed you,” muses Boutell. “Not at Cumberland Farms. I never saw it coming.”
Cumberland Farms is far from alone in this transition. As gas and cigarette sales continue to decline, foodservice has become something of a beacon of hope for the convenience channel. There’s a reason this year’s mystery shop extensively tracked foodservice operations: So vital to the industry’s future, it’s an area in which many retailers—Cumberland included—have failed in the past.
“People would ask how long I was going to ‘try’ foodservice,” Haseotes says. “My answer was that we’re going to do this until we make it work. That mindset, I think, has helped people to understand there’s no going back.
“When you take that approach, it says to everybody, ‘Forget about trying to prove how it’s not going to work; we’re not going there,’ ” he continues. “We’re going to make it work because the alternative is a grim one for us as an industry.”
Make it work they have, scoring above average in every one of this year’s foodservice-centric mystery shop sections and, in some cases, outscoring long-established foodservice retailers such as Kwik Trip and Sheetz.
The importance of foodservice is all the more apparent when you walk into newer stores, which dedicate substantial square footage and in-store advertising to a foodservice program that now includes a full-scale pizza program and made-to-order sandwiches.
To say the Cumberland Farms team has changed the game would be an understatement. Shifting from a traditional gas- and tobacco-centric retailer to a quality foodservice operator is not asking employees to learn a new style of play—it’s a new sport altogether, perhaps more akin to asking a football team to try its hand at marching band.
“Initially, it can be a shock to some of the team members,” Haseotes says of the move from a traditional legacy store to a new, foodservice-focused location. “The amount of work and the pace is markedly different.”
However, the difference has organically fostered the kind of team play being emphasized throughout the company under Haseotes’ leadership. Merriam points out that, while older stores needed (at most) just two associates on the clock at any given time, a foodservice program requires a team in the truest sense.
“When working in those stores, alongside three, four, maybe five people,” he says, “there’s more of a team effort.”
As a member of such a team, Boutell says the challenge has been one the majority has thrived on, marking an improvement from the “old days.”
“We’ve found that people like to stay busy; the go-getters love this job, and they have a lot of fun with it,” he says. “It’s not the old-school job, sitting at a register or refilling the milk. Those days are gone.”
CONTINUED: Positions of Equal Importance
Instead, associates resemble a restless crew, communicating continuously with each other, checking off tasks, sometimes switching from the register to restocking the condiment bar and cleaning up the forecourt area. They’re all positions of equal importance to the endgame.
“It starts with the clean pumps,” says Boutell. “We sell a lot of gasoline. If your pumps are filthy and the trash is overflowing, people aren’t going to come in to get food.”
As challenging as this brave new world is, it’s one that has improved Cumberland Farm’s bottom line and, surprisingly, the store’s turnover rates. Turnover for hourly employees is less than half of what it was 10 years ago.
“Ultimately, we’ve seen that [the new-format] stores have been able to have more longevity on their staff,” Haseotes says, estimating that roughly 35% to 40% of Cumberland Farms’ current locations fall under the “new format” description and that it’s “only a matter of time” before 100% of its legacy locations are retrofitted to the new prototype.
But why? Yes, as Boutell says, it’s a more fun and rewarding team experience for “go-getters.” Perhaps the truth comes down to a familiar concept for any sports fan: People like playing for a winner.
“Team members accept the intensity in exchange for being able to participate on a high-performing team and knowing that they are looked at as the clear choice for the local market,” Haseotes says of the new format stores. “That means a lot to people. Nobody wants to play for a losing team.”
“[They’re working hard] not because we’re paying them to do it or a mystery shopper is coming in the door: They’re proud of working for Cumberland Farms,” Forman says. “That pride wasn’t as strong in the past.”
It’s that pride that Haseotes describes as the most rewarding part of his job. Beyond mystery-shop accolades, beyond other awards, beyond even the bottom line, it’s this positive shift, which begins and ends with his team members, that has Haseotes optimistic about the company’s future.
“I have so much pride and confidence in my team,” he says. “When I’ve extended a hand, they’ve returned it with a firm handshake.
“When the team members have made major commitments and investments in their personal efforts, we have in turn sought anywhere and everywhere we can to make investments back into what it means to be on the Cumberland Farm team.”—Additional reporting by Angel Abcede
COMING NEXT WEEK: Mystery Shop Part 2--The Results & Retailer Report Cards
Foodservice Faves
We polled Cumberland’s team on their favorite snacks from the company’s revamped foodservice program. Their top picks include:
▶ Ari Haseotes, CEO (pictured above, middle): “I love our frozen Chill Zone beverages. Probably the flavor I like most is Sucka Punch.”
▶ Paul Freeman, vice president of retail operations: “I really like our breakfast pizzas. They’re almost as good as my wife’s!”
▶ Randy Boutell, store manager: “The new cheese pretzels are fabulous. I dip them in a little marinara sauce.”
▶ David Merriam, senior vice president of retail operations (pictured above, left): “My daily favorite is our line of fruit cups, whether it be strawberries, grapes or mixed fruit. The serving size is perfect for a refreshing morning or afternoon snack. The product is fresh all of the time and keeps you coming back for more.”
▶ Jamie Hill, customer service manager: “The mac-and-cheese bites bring me back to eating mac and cheese as a kid, but better: The crunch of the breading and then the gooey goodness in the middle hits it out of the park.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.