The power of customer delight:

In-N-Out Burger opened its first restaurant in Baldwin Park, California, in 1948. It was a simple
affair, with two drive-through lanes, a walk-up window, outdoor seating, and a menu that
boasted only burgers, shakes, fries, and soft drinks. That was a pretty standard format for the
time. In fact, another California burger stand fitting about the same description was opened that
same year just 45 minutes away by the McDonald brothers. Today, however, In-N-Out is pretty
much the exact opposite of McDonald’s. Whereas McDonald’s now operates more than 32,000
stores worldwide and pulls in more than $79 billion in annual systemwide sales, In-N-Out has
less than 250 stores in four states and about $400 million in annual sales.
But In-N-Out Burger never wanted to be another McDonald’s. And despite its smaller
size—or perhaps because of it—In-N-Out’s customers like the regional chain just the way it
is. When it comes to customer satisfaction—make that customer delight—In-N-Out beats
McDonald’s hands down. It regularly posts the highest customer satisfaction scores of any fast-
food restaurant in its market area. Just about anyone who’s been to In-N-Out thinks it makes
the best burger they’ve ever had.
In-N-Out has earned an almost cultlike following by doing something unthinkable: not
changing. From the start, the chain has focused tenaciously on customer well-being. Its
founding philosophy is as strongly held today as it was when the first In-N-Out Burger opened
its doors: “Give customers the freshest, highest quality foods you can buy and provide them
with friendly service in a sparkling clean environment.”
Unlike McDonald’s or Burger King, which introduce a seemingly unending stream of
new menu items, In-N-Out’s simple menu never changes. Instead, In- N-Out still focuses on
what it does well: making really good hamburgers, really good fries, and really good shakes—
that’s it. The burgers are made from 100 percent pure, fresh beef with no additives, fillers, or
preservatives. Potatoes and other fresh vegetables are hand cut daily at every restaurant, and
shakes are made from—yes—real ice cream. In an industry increasingly enamored with
technologies like cryogenically frozen ingredients and off-site food preparation, you won’t find
a single freezer, heat lamp, or microwave oven at an In-N-Out. Every meal is custom-made
with fresh ingredients. “We serve every customer, one burger at a time,” says one restaurant
manager.
Although the menu might seem limited, In-N-Out employees will gladly customize a
burger to each customer’s tastes. In fact, over the years, a “secret menu” has emerged for
customers who know the right code words (which aren’t advertised or posted on the menu
board). So, a customer in the know might order a “Double-Double Animal Style” (double
burger and double cheese, with pickles, grilled onions, extra spread, and fried mustard).
Ordering a 4X4 gets you four beef patties and four slices of cheese, and a “grilled cheese” is
an In-N-Out cheeseburger without the meat. Knowing the secret menu makes regulars feel
even more special.
It’s not just In-N-Out’s food that pleases customers but also its friendly and well-trained
employees. In-N-Out treats its employees very well. It pays new part-time staff $10 an hour to
start and gives them regular pay raises. Part-timers also get paid vacations. General managers
make at least $100,000 a year plus bonuses and a full-benefit package that rivals anything in
the corporate world.
Managers who meet goals are sent on lavish trips with their spouses, often to Europe in
first-class seats. Managers are also promoted from within—80 percent of In-N-Out managers
started at the very bottom. As a result, In-N-Out has one of the lowest turnover rates in an
industry famous for high turnover.
Happy, motivated employees help to create loyal, satisfied customers. In fact, words
like “loyal” and “satisfied” don’t do justice to how customers feel about In-N-Out Burger.
“Delighted” or even “fanatically loyal” might say it better. The restaurant chain has developed
an unparalleled cult following. When a new In- N-Out first opens, the line of cars often
stretches out a mile or more, and people stand in line for an hour to get a burger, fries, and a
shake. Fans have been known to camp overnight to be first in line. When the first Arizona store
opened in Scottsdale, people waited in line for as long as four hours while news helicopters
buzzed above the parking lot.
Ardent fans willingly go out of their way to satisfy an In-N-Out Burger craving. Jeff
Rose, a financial planner from Carbondale, Illinois, always stops at In-N-Out first when he
visits his mother in Las Vegas. “You have to pass it when you drive to her house,” he says in
his own defense. But how does he explain that he once paid an extra $40 in cab fare to visit an
In-N-Out on the way to the San Diego airport?
In-N-Out doesn’t spend much on advertising—it doesn’t have to. Other than a small
promotional budget for local billboards and some radio ads, when it comes to getting the word
out, In-N-Out lets its customers do its heavy lifting. Loyal customers are true apostles for the
brand. They proudly wear In-N-Out T-shirts and slap In-N-Out bumper stickers on their cars.
Rabid regulars drag a constant stream of new devotees into In-N-Out restaurants, an act often
referred to as “the conversion.” They can’t wait to pass along the secret menu codes and share
the sublime pleasures of diving into a 4X4 Animal Style. “When you tell someone else what
‘animal style’ means,” says an analyst, “you feel like you’re passing on a secret handshake.
People really get into the whole thing.”

In-N-Out Burger delights customers by focusing on friendly service and

In-N-Out doesn’t use paid endorsers, but word-of-mouth regularly flows from the
mouths of A-list celebrities. When former Tonight Show host Conan O’Brien once asked Tom
Hanks what he recommended doing in Los Angeles, Hanks replied, “One of the truly great
things about Los Angeles is In-N-Out Burger.” PGA golf star Phil Mickelson talked about the
chain so much that whenever he hit a losing streak, sportswriters began suggesting that he cut
back on the Double-Doubles. Once, when celebrity socialite Paris Hilton was pulled over and
charged with driving under the influence, her excuse was that she was on her way to satisfy an
“In-N-Out urge” (a term originating from fans cutting the “B” and the “r” off from the company
name on bumper stickers).
In-N-Out Burger is privately owned and doesn’t release sales and profit figures. But if
the long lines snaking out the door at lunchtime are any indication, the chain is doing very well
financially. In-N-Out’s average sales per store are double the industry average and well ahead
of leaders McDonald’s and Burger King. “The more chains like McDonald’s and Burger King
change and expand, the more In-N-Out sticks to its guns,” says the analyst. “In a way, it
symbolizes the ideal American way of doing business: Treating people well, focusing on
product quality, and being very successful.” In-N-Out’s customers couldn’t agree more. When
it comes to fast-food chains, delighted customers will tell you, “there’s In-N-Out, and then
there’s everyone else.”

Sources: Stacy Perman, “In-N-Out Burger’s Marketing Magic,” Businessweek, April 24, 2009, accessed at
www.businessweek.com; Stacy Perman, “The Secret Sauce at In-N-Out Burger,” Businessweek, April 20, 2009,
p. 68; Dan Macsai,“The Sizzling Secrets of In-N-Out Burger,” Fast Company, April 22, 2009,
accessed at www.fastcompany.com; Michael Rigert, “In-N-Out Fans Come Out
Answer the following question.
Q1. After read the case above as an example, please choose 1 company and explain how the company
delight the customers.