In-N-Out Burger's six secrets for out-and-out success
Filed under: Company News
On the heels of mounting cynicism generated by Wall Street bailouts and the perception that corporate leaders are gaming the system to make a profit, at least one American company is proving that businesses can survive and even thrive while sticking to traditional values.In-N-Out Burger, the iconic West Coast hamburger chain frequented by celebrities, is not slashing jobs or making major cutbacks during this recession. In fact, the regional chain, which has 232 locations in California, Arizona, Nevada and Utah, took in an estimated $420 million in revenues in 2008, and claims per-store sales of about $1.94 million. So how is this mom-and-pop burger joint pumping out per-store sales numbers that are better than Burger King and a host of other competitors?
BusinessWeek writer Stacy Perman has penned a book (In-N-Out Burger: A Behind the Counter Look at the Fast-Food Chain That Breaks All the Rules) that chronicles how In-N-Out Burger founders Esther and Harry Snyder built the foundation for a business that has performed well since it debuted in 1948. Here are the six principles she says have made In-N-Out Berger an out-and-out success:
Keep a Relentless Focus on Quality -- Perman says that the Snyders were "micro-managers" from the beginning, insisting on only using the highest quality beef, produce and other ingredients at their stores.
"Harry would go to the meat purveyors, and stand over the butcher's shoulder to make sure that he got the meat that he paid for," she says, adding, "In the 60s, at a time when the fast food industry had turned to using frozen beef patties and French fries, [Harry] began hiring butchers so that he could maintain the quality of his beef. His own butchers would prepare the beef patties, and that continues to this day, but on a much larger scale."
Listen to Your Customers -- One of the company's mottos is "Our customer is everything." Applying that belief led to the company policy of preparing burgers just the way customers asked for them. Some of the customer favorites became popular and were eventually adopted as the restaurant chain's "secret menu." By listening to their customers, In-N-Out created menu choices other stores couldn't duplicate.
"So now you have three or four generations of people who grew up on In-and-Out Burger who have this very special relation ship to the chain," says Perman. "It's very authentic -- you can't buy that. It's very organic and they've been very careful never to commercialize that."
Treat Employees Well -- The Snyders always held their employees in high esteem, paying them higher wages than competitors and calling them associates to make them feel more connected to the franchise.
"They believed in sharing their success with their employees," says Perman, noting that In-N-Out associates make $10 an hour working part-time and starting store managers make $100,000, plus bonuses tied to store performance. The company benefits package is also generous. Such treatment engenders loyalty from workers.
"They have the lowest turnover rate in the fast food industry, which is notorious for turnover," says Perman. "They say that the average manager's tenure is 14 years, but they have managers who have been there 30 or 40 years."
Keep Things Simple and Consistent -- Another of Harry Snyder's mottos was, "Keep it real simple, do one thing and do it the best you can." That theme runs throughout the business.
"People get cynical about changes at different companies, but they always know that In-N-Out doesn't change," says Perman. "In and out stands for something and they've stuck to it and their customers really see that."
Expand Slowly and Only Under the Right Conditions – In-N-Out has strict guidelines that limit the growth of stores, but ensure each store's success.
"They don't open a store outside of a 500-mile radius of the commissaries where they get their fresh beef patties, their buns and other products because they want to maintain freshness," says Perman. "They make deliveries daily or near daily."
She also points out that, "They never open a new store unless they have management strength in place. They have very rigorous training procedures."
Define Your Own Level of Success – In corporate America, where success is sometimes defined as rapid growth at any cost, In-N-Out has, as the title suggests, made its own rules.
"If the customers and the employees were happy and they were making the best product they could, they were successful," she says, "and they have maintained that philosophy."
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Reader Comments (Page 1 of 1)
5-24-2009 @ 7:57PM
john malinowski said...
I could not agree more with everything I've just read about In-N-out burger. As a small business pizza restaurant owner in las vegas I have learned a lot just from watching the way they run their shop. It is always consistent at every location.
Enjoy the food
John at Northside Nathan's Detroit Pizza
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5-25-2009 @ 3:23AM
Ryan said...
They need an In-and-out in St. Louis ASAP!
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5-25-2009 @ 4:55PM
garry walsh said...
These guys are communists. Where is the $60000000000
CEO bonus? Where is Goldman Sachs to block the 1 cent a pound raise for the tomatoe pickers of Florida? Paying $10/hr to start? Insanity. Imagine having your help eating everyday-the bastards would have enough energy to think and then where would the Cristian Right and the Republicans get their fodder? Constant staff turnover keeps everybody off balance and makes the rabble easier to control. Anti-American communists all.
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5-25-2009 @ 10:35AM
victor malozi said...
I have never had an "in and out" hamburger but if they really go as far as they say then they must have an above average burger when compared to the " giants" Mac and B. King. My last visit to burger king we tried their chicken sandwich that had to be made from breaded chicken paste. I wanted to send an e mail to tell them of my dissatisfaction but their site doesn't have a place for feedback!! I sure wish that In And Out was in Florida!!
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5-25-2009 @ 11:18AM
Thad DeGroot said...
The "other" fast food establishments better be shaking. I there is an In-n out Burger near a McDonalds...its fun to see how many cars are not at McDonalds.
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5-25-2009 @ 12:15PM
Clement said...
In-N-Out has a more family-style management where managers are tied to the founding family. That allows better control.
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5-25-2009 @ 4:59PM
The Guru said...
Sounds like a successful way to make a mark in the food industry. More business should implement such a formula for success.
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5-25-2009 @ 5:04PM
stan said...
Chill out garry walsh . . . we are talking hamburgers now politics, you idiot.
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5-25-2009 @ 9:09PM
Richie Tahoe said...
Who cares if celebraties eat at in and out burgers! They do not make or break a food chain just because they eat there. Come on now real people eat there because of the taste of the food. Just because they see someone who has been in a movie or on Tv does not make them ANY BETTER THAN ANY one else in this country. The reason why this chain is succesful is because real people like the taste of the food and this is why they are successful....
Stop with the celebraties sighings --- too over played..
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5-25-2009 @ 9:20PM
robert said...
I'm from NJ and my wife is from California. We met on the east coast and from day one she raved about in and out burger. We finally went to one together on our first trip out west and you know what... i could have been in a McDonald's and not known it. Nothing was exceptional.
I don't get it.
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5-26-2009 @ 1:34AM
George COhen said...
I have noticed that IN and Out Burgers seem to hire less minorities than other fast food chains. What do others see?
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5-26-2009 @ 8:37PM
Shannon said...
Dear Robert, I think maybe you must have been distracted that day. There is a clear difference between In N Out burgers and McDonalds's - the burger is not dry, the veggies on it are fresher, for example. Also their fries are not frozen; instead they cut up the potatoes on site. If you can't tell the difference, I don't think anyone can help you with that.
Maybe I'm just being provincial when I say I like In N Out better, but I believe also that capitalism doesn't work if you only look at the price point, or even just price point and quality. Our conscience should be a buyer's guide, too. Patronizing companies that care only about the bottom line ultimately hurts everybody.
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7-04-2009 @ 4:45PM
Richard said...
@Geroge COhen -- yes, you are correct. Their employees tend to have fewer minorities than the neighboring Taco Bell or MacDonalds, where it is unusual to find a non-minority worker there. This is due to the language comprehension requirement of In N Out Burger. The last time I was at a Jack in the Box I couldn't understand the person behind the counter. They were speaking english without an accent, just mumbling in street slur. Oh, and I'm a visible minority, so don't go calling me a cracker.
It's not about minority vs non. I do see minority workers at INO, but they all speak perfect english.
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