September 16, 2004

Are You Being Served?

Today's Musical Selection: "Material Girl" by Madonna

Hello, friends. Today something shocking happened to me, so shocking as to defy belief. Many of you won't believe it happened, but it did. Are you sitting down? Here goes: I received good service at a fast-food restaurant.

I'll pause here so you can recover from the shock.

The details: It occurred at the Boston Market here in Dot-Com Canyon. I strode in to a mostly-deserted restaurant, and was greeted warmly by a woman named Leslie. After a seemly pause for me to consider my menu options, Leslie asked for my order. She filled it quickly, efficiently, and correctly (and generously; she piled on the potatoes, which met with my definite approval). We then proceeded to the cash register, where she rang me up, politely asked if I cared for a drink (as opposed to trying to upsell some new menu item I didn't want), took my money, produced correct change, thanked me and handed me my food. She looked me in the eye the whole time, and had a terrific attitude, as if she was actually pleased to be assisting me. Talk about a shock. (The food was even good, even though it was a late dinner.)

I share this example primarily because it's become so rare. At restaurants and retail stores, service has gone to hell. Too often, you get help that's incompetent, indifferent and/or surly. It's become an accepted fact of life that, when you go out to buy things, you're going to get lousy help. It wasn't always this way. What went wrong?

Papa Shaft and I had this discussion the other weekend, after receiving atrocious service at a restaurant.

"I can't believe they're talking about raising the minimum wage," he grumbled, "when the service you get isn't even worth the minimum wage now. Why reward incompetence?"

I pointed out that with service-industry wages as poor as they are now, it's almost impossible to attract decent help. You tend to get recent immigrants, high-school students and the otherwise unemployable, which tends to lead to spotty service for a variety of reasons (communication problems with immigrants, bad attitudes with high-schoolers, lack of competence with the unemployable). With wages as poor as they are, the only people who will take those jobs are those who don't have other options.

"Yeah, but forcing companies to pay over market value is just going to drive up prices," he said, "and that eats up the rise in wages. It's a cycle of inflation."

He's right, of course. Raising the minimum wage without providing some sort of offsetting government subsidy to companies will eventually increase costs. If Wal-Mart has to pay its workers $10 an hour to stock shelves, they won't be able to sell 100 gallons of ketchup for a dollar as they do now.

But you get what you pay for, and our national obsession with discounting and low prices means that companies can no longer afford to pay for decent help. Look at the case of grocery stores. They used to be famous for offering wages that allowed their workers to make a good middle-class living. Now, pressure from discounters like Wal-Mart has forced the supermarkets to cut costs to survive, and this has led to a wave of ugly labor showdowns for a lot of grocery chains. Unions are forced to accept dramatic cutbacks in wages and benefits or face the possibility of major job loss.

Restaurants like McDonald's are in a similar bind from a different direction. McDonald's sorry service is well-known (though interestingly, Boston Market is owned by McDonald's). Presumably, by doubling wages they might get a better quality of worker. But what if the prices doubled too? Are customers going to pay double for a McDonald's meal when they could go to a chain restaurant and get better food for roughly the same money? What's made McDonald's successful through the years is its national profile, convenience and price. Many chain restaurants now offer takeout, so that they're not much less convenient than McDonald's. And the Arches' once-hegemonic domination of the low-end restaurant business has been shattered by competing fast-food chains as well as the "fast-casual" places like Applebee's and Chili's. McDonald's is trying new menu options to try to make themselves more appealing, but they're never going to have very good food. If they're going to compete, it has to be on price.

So what does the future hold? Papa rightly suggests automation. McDonald's has been experimenting with an automated ordering system, and Papa points out that an automated system could probably provide more efficient and accurate service than low-paid unskilled workers, and in the long run it would be cheaper. (See also the self-service checkouts becoming increasingly popular at grocery stores.) Of course, once that happens, we face a fresh wave of unskilled workers who are going to be without jobs, and I don't have any idea what we intend to do with them.

In the meantime, though, other restaurants might benefit from Boston Market's example. Now, since this was only one visit, I don't know if Boston Market routinely provides better service or if I just lucked out in showing up when Leslie was there. But I do know that the good service and good food were enough to make me want to go back. Sure, Boston Market is a couple bucks more than McDonald's or Burger King, but it's worth it. I'll gladly make that trade.

Offering higher wages will tend to attract the cream of the retail-worker crop. And it will tend to keep them there; if they're making more with you than they would be elsewhere, they'll want to stay. And they'll want to do a better job so they can stay with you. And having a desire to keep a job leads to pride in your work. A high-school student working at 7-11 for the summer isn't going to care if he does crappy work, because in a couple months he'll be gone anyway and he doesn't care what they think of him. But if you intend to stay with a company for a period of years, you'll want to do good work and impress them.

Over time, this has a cumulative positive effect. If I'm a customer driving around looking for dinner and I happen to see a Boston Market as one of my options, maybe I'll remember the good service and go there instead of hitting Hardee's. Good service is a hook, something on which a company can build a reputation, even in the low-end market. Surely I'm not the only one who's tired of rude cashiers filling my order wrong.

Of course, the plan can only work if the customers show the will for it. If good service isn't worth the extra couple dollars to a customer in that market segment, then we're stuck with the race to the bottom. Which is a legitimate market choice. But if that's the choice we consumers make, we have no right to complain about crappy service. We made our own bed. We can't have it all.

I think we can afford to spend a couple extra dollars for decent service. And if we start demonstrating our willingness, patronizing places that offer it and avoiding places that don't, we can get it. Markets are amoral; they respond to what sells. If customers start rewarding places that treat customers well and hire quality employees, then we'll see more such places. If we focus on saving that last possible dollar, then we're going to see service get worse and worse. The power is truly in our hands. The lousy service at McDonald's isn't some corporate plot to make us miserable; it's a direct response to our desire for cheap eats. We can choose to make things better, if we recognize it. Here's hoping we will.

And that closes the book on today. See you tomorrow!

Posted by Fred at September 16, 2004 04:48 PM
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