Del Taco: Building Customer Loyalty with Respect
Del Taco has become the second largest Mexican fast-food chain in the U.S., behind Taco Bell (YUM). How did it manage this? Walk into almost any Del Taco restaurant and you'll find a counter card promoting the chain's new shakes (it also offers burgers and fries, in addition to tacos, burritos, and quesadillas). On the back of the card, visible to employees, is a reminder to smile and make eye contact with customers. The card is one example of the simple tools Del Taco President Shirlene Lopez uses to build customer loyalty.
Lopez has spent her entire career at Del Taco. She started by mopping floors and wiping tables at the age of 14. She now oversees more than 500 Del Taco restaurants and 16,000 employees. (Del Taco is owned by Nashville-based Sagittarius Brands, owner of Captain D's seafood chain.) She shared her strategy for building customer loyalty in a recent interview with me.
Don't miss the little things. Effective communication skills played a prominent role in Lopez's career advancement and she sees such skills as crucial in the way Del Taco builds customer loyalty. "I learned at an early age that customers respond differently based on how you communicate with them. How you greet them and thank them makes all the difference in the world," Lopez told me. Lopez says customers will remember how they are acknowledged when they enter a place of business. Something as simple as a smile can transform a transaction into a memorable experience. "You can make eye contact and greet people, but if you don't have a smile on your face, you don't appear sincere," says Lopez.
Lopez doesn't want to talk about lofty management theories. Instead her success and the success of the Del Taco chain is rooted in the basic understanding of human interaction: the fundamentals customer service that are lacking in many of today's service businesses. "If you are in search of the big answers, you skip over the little things that make all the difference," Lopez told me.
Respect your employees and customers. Respect is a theme for Lopez. It extends to how she believes employees should treat customers as well as how employees should be treated by management. And she thinks eye contact and body language are necessary to convey respect. Says Lopez: "If you don't look at someone when you're talking to them, it shows a lack of respect. People feel respected and feel as though you are listening to them if in fact you are listening and you are looking at them. Eye contact is a big, big thing."
She says the same holds for customers. "Respecting a customer means communicating with them immediately, making eye contact, and smiling. If a customer is acknowledged right away, they will be fine, even if the greeting is something as simple as, 'Hello, welcome to Del Taco. I'll be right with you.'"
Turn transactions into interactions. Lopez believes there is a difference between a satisfied customer and a loyal customer who returns to the same restaurant more than once a week—and tells people about it. According to Lopez, moving beyond merely "satisfied" customers to creating loyal ones is crucial in tough economic times when customers have fewer dollars to spend.
Lopez is proud of the fact that Del Taco has "raving" fans, some of whom eat at the chain several times a week and know the local store manager by name. But fans don't rave unless they're won over. Offering good food at a good price isn't enough. The key is to turn a transaction into an interaction. "We're facing difficult times and need to be more sensitive. If a person only has $5 to spend this week, they are looking for something extra. They want to make sure that where they go, they will get good food and be treated nicely. Our customers like to go because they like the food, they know the employees, and they like the way they are treated."
Lopez believes customers are more likely to return if they walk away from the interaction with something memorable. "That doesn't mean something huge has to happen," she says. "But if they can say the food was great, the cashier was nice, and that was a good experience from start to finish, it will build customer loyalty."
Bottom line? Lopez says small business owners and entrepreneurs need to focus on the basics to build loyalty. When Lopez visits a store, she'll head for the kitchen to test the beans. Del Taco differentiates itself by preparing its beans from scratch so they can't "mess it up." Lopez believes it's this relentless focus on improving the simple things that keeps customers coming back.