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- [00:01]
Phil Agnew
Every restaurant struggles with this problem. And it is a problem that arises right when a customer has finished their meal.
- [00:08]
Will Guidara
Every diner has this in common. Whether or not they realize it, they get very impatient the moment they ask for the bill. If it takes us too long to bring it, we've ruined the meal. Yet at the same time, I can't drop the check on your table before you've asked for it. Otherwise, what do you think I'm trying to do, rush you out? And it's especially challenging in a fine dining restaurant because, let's name it, it's a big bill. And the moment you realize how much the meal costs, it's a little bit harder to still love that meal you've just had.
- [00:31]
Phil Agnew
That's Will Guidar, best selling author of Unreasonable Hospitality and the co founder of Eleven Madison park, the three star Michelin restaurant and 2017 best restaurant in the world. In today's episode of Nudge, he explains how he used a behavioral science principle to solve the problem of tension customers feel when paying the bill. Apparently most businesses only use 20% of their data. That's like reading a book with 80% of the pages torn out. The point is, you will miss a lot unless you use HubSpot. Their customer platform gives you access to the data you need to grow your business. The insights that are trapped in emails and call logs, in transcripts, all that unstructured data can really make a difference to your business. Because when you know more, you grow more. You won't learn much reading 20% of a book. So why settle for just 20% of your company's data? Visit HubSpot.com today to learn more. To start today's episode, I'm going to give you a bit of backstory. And it starts in 1963 with the James Bond film From Russia with Love. Now why am I talking about this film? Well, it's because the director did something very surprising. After the credits had finished rolling, a short message appeared on screen. It said the end in capital letters. The text faded, but then new text appeared. It read, not quite the end. James Bond will return in Goldfinger. This is one of the first examples of a post credit sequence. Basically a little bit of bonus content for those who stay till the end of the movie, perhaps even after the credits have rolled. Richard Shotton writes about these in the Illusion of Choice. He cites a 1979 example from the Muppet Movie. Here the character Animal broke the fourth wall to tell audience who are still sat in the theatre that this. In Toy Story, Pixar included these parody blooper reels after the credits.
- [02:40]
Will Guidara
I don't remember eating that. I can't believe that that's a fifth. Wow. Sorry, everyone. I. I had that bean burrito for lunch. Okay, I'm all right now. Sorry.
- [02:50]
Phil Agnew
But Shottam's favourite example of this comes from the 1978 John Landis film Animal House. He writes, at the end of the main film, there is a section showing what happened to the characters. One of the characters, Babs, was shown getting a job as a tour guide at Universal Studios. Then, after the credits rolled, a static ad appeared saying, when in Hollywood, visit Universal Studios and ask for babs. Apparently until 1989. So a good 11 years later, anyone who took advantage of this cryptic suggestion and went to Universal Studios and asked for Babs was rewarded with a discount when they went. But why do movies do this? Why do movies bother with these post credit sequences? Well, it's because directors know that the last experience a viewer has has an asymmetric, outweighed impact on their perception. In other words, if Toy Story makes you laugh right as you're leaving the cinema, you will think the movie is funnier than if they'd just rolled the normal credits. We know this due to a brilliant study in 1993 by Daniel Kahneman and Barbara Fredrickson. For the study, participants placed their hands in painfully cold water. One group endured 60 seconds of freezing water. Another endured the same 60 seconds in freezing water, plus an additional 30 seconds in slightly warmer water. But it was still uncomfortable. When groups were asked which version they would want to repeat, having tried both, the majority of people chose something surprising. They chose the longer duration. Now, this is irrational. It is longer. You still have to do the 60 seconds in cold, painfully cold water, but then you have to do 30 more seconds in water, which is still uncomfortable to leave your hands. But participants preferred the longer version because the ending was slightly more pleasant. Kahneman and Fredrickson conclude that people don't evaluate experiences by averaging out every moment. Instead, their memory is disproportionately shaped by the most intense moment and the ending. They call this the peak end rule. It's a rule that is important for anyone selling a service to remember. The last thing a customer experience has an asymmetric impact on how they view the whole experience. Richard Shotton writes that Disney apply this masterfully at their theme parks. When you start queuing for a ride, there's a digital display that estimates how long you'll be waiting for. However, Touring Plan, a site that helps visitors get the most from their Disney theme parks compared 2 million displayed times with actual wait times and they found a consistent pattern of overestimation. Disney repeatedly warns guests that the queue will take longer than it actually does. At first glance, this is surprising. Why would a brand exaggerate their problems? But Richard writes that if you consider their actions in light of the peak end rule, it makes sense. By overestimating the queue length, the experience ends on a high. The irritation of a 45 minute queue is minimised because you were expecting a 50 minute wait. Today I'm extremely lucky to speak to someone who knows a lot about the pecan rule.
- [06:04]
Will Guidara
Yeah, my name is Will Guidera. I am a lifelong restaurateur, the former co owner of eleven Madison park, but perhaps most known for my book Unreasonable Hospitality.
- [06:16]
Phil Agnew
Today I'm going to argue that Will and his team put more thought into the final moments of the dining experience than almost any other restaurant and restaurateur out there. Because of all this, I think he made the end of diner experience at eleven Madison park better than any other restaurant. And he did all of this by focusing intently on the touch points each customer experience. Essentially each different part of the process and service that the customer experienced when they dined at the restaurant.
- [06:44]
Will Guidara
Listen, as a whole, most organizations focus all of their energies on the most obvious touch points in an experience, which by definition are the same ones their competitors are focusing on. In fact, I've come to realize not just in my time owning and operating my restaurants, but in the years since as I've gotten to work with leading companies across pretty much every industry is. Very few organizations actually know what every touch point in the experience they're serving is because they've never paused for long enough to genuinely understand the experience as a whole. And I found if you can invest creativity and intention into the most overlooked touch points, you can have the greatest impact on the experience as a whole. Because it's you saying very clearly to the people you serve, we're willing to care about things that no one else has ever paused for long enough to consider.
- [07:36]
Phil Agnew
And one of the things that Will cared very deeply about was coat checks. He obsessed over how the restaurant reunited diners with their coats as they left the table.
- [07:48]
Will Guidara
There's this rule you've likely learned of it in the past, the peak end rule. It's how people generally remember experience, the peak of it, and then the very end, the very end of an experience. If you dine at a restaurant during the winter season, is that moment at the end where you're you know, ruffling through your pockets trying to find your coat check ticket. You hand it to someone, then you're just standing there at the front door waiting for them to go find it and bring it back. And at the end of a meal where every detail has been relentlessly focused on it is in pretty much every case, clumsy. And we said, how do we make that more awesome? And what we came up with was something that was not hard, it just required working a little bit harder. We re engineered the entire coat check system such that the coat room was organized by table. And so when you sat down, we just sent you in, we put your coats at your table. We had another coat room that was closer to the front door and we'd send a host around through the restaurant every so often to update where the tables were. If you were on check, they would note it accordingly. We'd move your coats from the bigger coat room to the smaller one right by the door. And when we saw you get up from your table, we would just grab your coats and we'd be standing there waiting with your coats by the front door. Now everyone would come, they'd be rummaging through their pockets trying to find their coat check ticket, only to realize they'd never been given one. And in fact, someone was already sitting there holding their coats. It felt like a magic trick. Now that didn't require that much more effort, it just simply required a bit more preparation and a bit more ingenuity in how we built the system. But it made the last moment so often the most clumsy, one of the most magical. And it had an impact because no one else had ever thought long enough about coat check to try to make it better.
- [09:45]
Phil Agnew
This is an obscene amount of effort. It involves a host regularly walking through the dining room, taking note of where customers were in their meal, and for those nearing the end of their meal, going to fetch their coats from a bigger room to take them to a smaller coat room so that another member of staff could hand them the coat as they left. Despite all this effort, in his book, Will writes that this became one of his favourite moments at the restaurant. He says you'd watch guests approaching the door, starting to hunt in their pocket or bags for their coat check tags, thinking, where did I put that? And then they would look up, recognise their own coat and they would be astonished. It would be amazing to pull off this magic trick right at the end, blowing the guests minds. He goes on to say that very few other restaurants are doing this. However, there are some who do think diligently about the end of diner experience. Again, in Illusion of Choice, Richard Shotton writes about a restaurant called Flat Iron. This is a chain of London steak restaurants. Now, I've never been to Flatiron, but Richard writes that after you've paid the bill, the waiter gives you a pair of miniature ornamental steak knives and tells you to hand them in to the staff at the door when you leave. When you do, you are rewarded with a salted caramel ice cream cone in return. It is a surprise, it's totally unexpected and it ensures that the diners leaving the restaurant end their experience on a high.
- [11:03]
Will Guidara
Opportunities like that exist everywhere. I learned recently of an accounting firm in the suburbs of Washington D.C. where a lot of people go to their offices for meetings and these are people that are spending quite a bit of money at their firm. And they did two things. They added a valet parking attendance that people didn't have to walk so far and that gave them access to people's cars such that when people got in their car after a meeting there was a little gift bag in the car waiting for them with a note saying thank you for your business. That again did not cost anything relative to the amount of money people were spending at that firm. And yet it took something. Working with an accounting firm that often feels so transactional and made it feel experiential and made it feel connective.
- [11:53]
Phil Agnew
Harry Dry from Marketing example notes that Sweden do this with blood donations. In fact the UK do it as well. When you donate blood in the UK you get sent a text once your blood has been used. In fact you're even told what hospital it was used in. And that final experience gives you a real reward, this feeling of happiness that your blood has been used and it makes you more likely to do it again. It's also why Ikea put an extremely cheap ice cream counter at the exit to the store. And according to the late great Sam Tatum in his brilliant book Evolutionary Ideas, it is why Cornetto put a lump of chocolate at the bottom of their cone. He wrote that the chocolate end was initially an unintentional byproduct of its production. The cone's chocolate coating would drip down and pool at the base, creating this solid block of chocolate. That glitch became much loved, however, because it not only stopped unwanted drips, but it soon became the most enjoyable part of the experience. In fact, it was so widely enjoyed that when the manufacturing was improved so the lump at the bottom would year, they retained the lump of chocolate because of the popularity. In fact, Walls, the creators even launched cornetto tips In March 2021, a product containing no ice cream, just the tip of the wafer cone filled with solid chocolate.
- [13:06]
Will Guidara
The other thing about the Pecan Rule that I find so unbelievably empowering for people is that, listen, the peak is the moment of the experience that is furthest from zero, right? And that means if you mess up becomes the peak, albeit a negative peak. But I mean, I'm empowered by the idea of it because if you are 10 deviations from 0 in the wrong direction, all you need to do is work hard enough to create a positive peak that is 11 deviations from zero. Like no mess up prevents you from making it right so long as you're willing to do the work to redefine the peak and then obviously stick the landing. But I think we under invest in customer recovery. Generally as a global culture, people don't understand that that is a pretty amazing way to build loyalty. And the peak end rule is a great reminder on why it's so important to do exactly that.
- [14:13]
Phil Agnew
Chip and Dan Heath, in their book the Power of Moments, have been able to spot the peak end rule in TripAdvisor data. They write that when guests reported experiencing a delightful surprise, 94% of them expressed an unconditional willingness to recommend the hotel. And that was compared to only 60% of guests who were willing to recommend the hotel who said that they were very satisfied. In other words, let me explain this in more detail. The guests who were surprised positively were significantly more likely to recommend that hotel than other guests who were very satisfied but didn't have a surprise. But Will didn't just provide a ticketless coat check to help his restaurant benefit from the peak end rule. No, he did something that most restaurants would be far too scared to do. Find out exactly what that is after the break. The podcast I'd like to recommend to you today after you finish listening to Nudge is the Hustle Daily Show. It is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Hustle Daily show brings you a very healthy dose of irreverent, offbeat and informative takes on business and tech news. If you would like an interesting episode to get you hooked on this podcast, there's a recent episode called the AI App that makes your dream vacation a digital reality. If you want to listen to that, just go and search for the Hustle Daily show wherever you get your podcasts. Hello, welcome back. You are listening to Nudge with me, Phil Agnew. Today we are covering the peak end rule of the best selling author and restaurateur, Will Guidara. So far he's covered how he made coat collection seamless. But that only benefits customers in winter. To improve experiences for all customers, he had to work on by far the most common final experience most of us have. With restaurants paying the bill, everyone gets the check.
- [16:02]
Will Guidara
It is at best overlooked, at worst negative. And yet it presents such an opportunity to make it more awesome. I think a lot of people have never paid any attention to it because we have a flawed belief system that the transactional moments cannot also be connective. They can. I think people also don't invest energy into it because it's a hard moment from a timing perspective to get right. Every diner has this in common. Whether or not they realize it, they get very impatient the moment they ask for the bill. If it takes us too long to bring it, we've ruined the meal. Yet at the same time, I can't drop the check on your table before you've asked for it. Otherwise, what do you think I'm trying to do, rush you out? And it's especially challenging in a fine dining restaurant because, let's name it, it's a big bill. And the moment you realize how much the meal costs, it's a little bit harder to still love that meal you've just had. But once we identified it as an opportunity, we were able to make it awesome. And this is what we came up with. When you were done with your meal, you hadn't asked for your check, but it was clear when you're done, we'd go over to your table with a Gl glass, reach one of the people at the table, pour them a little splash of cognac and say, thank you so much for dining with us. This is with our compliments. In fact, I'm going to leave this entire bottle here. Please help yourselves to as much as you'd like. And then we put the check down and we'd say, your check is here, ready whenever you are. It's a small change, but not to overuse the words, although they're important to me because it happened at the intersection of creativity and intention. The impact was profound. First, no one ever had to wait for their check again. Second, no one could ever think we were trying to rush them out. We'd just given them an entire bottle of free booze. It didn't cost us very much. Rarely did anyone drink more than that splash of cognac we had poured into their glasses. And yet, at the moment where we brought that big bill we matched with a gesture of profound generosity. All of these things tied together enhance the experience. So much so that again, I've talked to people who dined with us in the early days at eleven Madison park who do not remember a single bite of food they had. But they'll never forget how we made them feel with that bottle of cognac.
- [18:20]
Phil Agnew
I don't think you'll need convincing that this is a good idea. It's so obviously a smart thing to do. But Will even shared with me a 2002 study that backed it up.
- [18:31]
Will Guidara
That one's backed up. I think it's just so interesting. I have no idea why they did it, but Cornell University, they ran a study where they compared a thousand diners that bring a mint with the bill to a thousand diners that don't. The ones that did, on average, had 18% higher tips than the ones that didn't.
- [18:47]
Phil Agnew
Now, there is a slight clarification here. It's important to me that all of you listening have the correct data, at least as I know it. And the study I could find and I've cited in the sources of today's episode, well, this one had 172 dining parties, which is essentially table so times that by three or four to get the number of diners. And it was across two experiments. And those who got the gift with the bill, and the gift, I should say in this study was a chocolate, well, they gave an 18% higher tip. And then in the second experiment, participants who were spontaneously given not just one chocolate with a bill, but a second Chocolate actually donated 22% more than the control. So Will's point definitely stands.
- [19:26]
Will Guidara
It's proof that, listen, generosity begets generosity. The value of the tips far exceeded the cost of the mints. You give people a little bit, they'll almost always give more in return. Micro opportunities for generosity, investing in these overlooked moments. It always works.
- [19:45]
Phil Agnew
Which is why very early on in Ghidara's time at eleven Madison park, he did something that most people would think is utterly ridiculous. And yet it's gone down in the folklore of the company and of the restaurant industry in general.
- [19:56]
Will Guidara
This was kind of the very beginning of fully figuring out what unreasonable hospitality meant. I was in the dining room on a busier than normal lunch service, clearing appetizers from a table of four. There were foodies Europeans on vacation in New York City just to eat at our best restaurants. In fact, this was their last meal. They were going straight from the restaurant back to the airport to head home and While I was at the table, I overheard them talking and they were raving about their trip. They'd been to all the four star restaurants. Now 11, Madison park, the trip of a lifetime. But then one of the women at the table jumped in and said, yeah, but we never had a New York City hot dog. And it was one of those light bulb moments in a cartoon, you know, the characters had a good idea. I went to the kitchen, dropped off the plates, ran outside of the hot dog cart, bought a hot dog, ran back inside. Then came the hard part. Convincing my fancy chef to serve it in our fancy restaurant. But eventually I did. And he cut the hot dog up into four perfect pieces, put one on each plate, added a little swish of ketchup, one of mustard, a little scoop of sauerkraut, one of relish. I'm sure he topped it off with a micro herb or something to make it look fancy. And then before their final savory course, which at the time was our honey lavender glazed Muscovy duck that had been dry aged for two weeks, I brought out what we in New York call a dirty water dog. And I explained it. I said, I ever heard you talking before? We didn't want to let you go home with any culinary regrets. Here's that New York City hot dog again. Every time I think about it, it makes me laugh. They freaked out. I mean, at that point in my career, I'd served tens of millions of dollars worth of wagyu beef and lobster, you name it. And I had never seen anyone respond to anyone anything. I'd served them like they did to that hot dog. And as it reinforced something big. I really do believe I could have given that same table a bottle of vintage Dom Perignon and a bucket of caviar. Would not have had the same impact as the $2 hot dog because it would not have been specific to them. People want to feel seen. They want to feel like the experience they are having is singular and bespoke to who they are. And if we can all find joy in identifying more opportunities to do just that, it truly becomes the greatest competitive advantage we can have.
- [22:21]
Phil Agnew
These examples of unreasonable hospitalities, they weren't one offs. The book is littered with them. Will writes how smokers often slipped outside for a cigarette during their meal. And while they were out there, the team would bring them a splash of booze in a little to go cup that they'd specially ordered for that purpose. Amazing. Another example, when a couple got engaged at the restaurant, the team would pour them complimentary glasses of champagne, like every restaurant does. But their champagne flutes were different from all the others that they had in the dining room. They were crystal flutes, and Will had partnered with Tiffany to provide these special flutes. At the end of the meal, they'd send the couple home with a gift box that contained the glasses they had used for their engagement toast. They did this kind of thing everywhere. And Will says finding ways to improve the final touch points of a customer's experience isn't even that hard.
- [23:10]
Will Guidara
If you are in the business of serving other people, which I now believe every one in the world is in that business in some way, shape or form, it's not hard at all. It requires intention. Making the choice that you will invest resource into this, whether that is time or money, collaboration. Recognizing that when it comes to innovating in the customer experience, it cannot just be a couple of people at the top that lead the effort. One of my favorite quotes is by a retired naval captain named David Marquet, who said that in most organizations, the people at the top have all the authority and none of the information, while the people on the front line have all the information and none of the authority. To really brainstorm innovation in hospitality, you need to bridge the gap between authority and information. And then finally it comes through. Well, just relentlessly looking for opportunity. Just look at the recurring moments, the good ones and the bad ones that happen with your customers in your company. Isolate all of them, come up with a list, and then brainstorm what is the most awesome way to respond every time that thing happens. Or look for a few overlooked touch points, things that everyone experiences that you've never even paused for a moment to consider. Make those parts of the experience more awesome. Like anything, it's about momentum, getting some points on the board, watching people respond positively to the things you start to do, and then it starts to become self perpetuating from there.
- [25:01]
Phil Agnew
But that's not all. Will went on to tell me about another important change he made in the business that was backed by behavioral science.
- [25:08]
Will Guidara
At that point, we were doing kitchen tours where we were bringing people on a tour of the kitchen just to see it, because we knew it's just cool to see the kitchen. People really enjoyed it. And yet the way it was at that point, you'd walk into the kitchen and you'd feel uncomfortable. You were in everyone's way. And so we said, okay, how do we keep on doing kitchen tours but draw inspiration from the kitchen table?
- [25:28]
Phil Agnew
And all of that is in the bonus episode I did with Will Godara. It is a great bonus episode. Some of you tuned into it last time we did an episode, but not all of you have. So if you haven't listened to the bonus episode on Kitchen Tours, do go and listen. It's great. I shared two really, really good studies on operational transparency. Will shares one of the best examples that he's got in his book. And the bonus episode is free. You can listen to it right after this. All you have to do is click the link in the show notes of today's episode, enter your email address, and you'll be taken straight to that bonus episode. Nudge. Newsletter subscribers already have the link to the bonus episode. It is just in their email that I sent you today on the day this episode went live. The bonus episode is produced just like a normal episode. It is fully cited. I think it's really good. So please do go and access it. Click the link in the show notes and you can listen to it right after this. All right, that is all for today. I can't praise Will enough. His book is fantastic. Definitely go and read it if you haven't already. If you need more convincing, and I don't think you do, but if you do need more convincing, here is Will sharing a little bit more about the book.
- [26:30]
Will Guidara
Now, the book is ultimately, I mean, listen. It's about the lessons in service and leadership I learned over the course of my career in restaurants. But fundamentally it's about two things that it does not matter what you do for a living. You can make the choice to be in the hospitality industry simply through giving as much of your energy towards how you make people feel as you invariably do the product or service you sell. There is a quote, it's my favorite, about hospitality. It comes from Maya Angelou. I'd imagine many of the listeners have heard it. She said, people will forget what you say, they will forget what you do, but they will never forget how you made them feel. And yet, in spite of the fact that that is pretty objectively true, most everyone would agree with me on that. So many companies invest all of their energies solely into the product, and while they stop short when it comes to those more ephemeral things, which are those that can become an individual or an organization's greatest competitive advantage. The second thing the book is about is really how to put that to life. And I like to redefine the word hospitality, but I think my favorite definition is that at its core it's about being creative and intentional in pursuit of relationships. And so the book is a lot about that. It's what happens at the intersection of creativity and intention when directed towards people.
- [28:08]
Phil Agnew
You'll find the link to Will's book in the show notes. And you will also find the link to today's bonus episode as well. That is all from me. Thank you for listening. I'll be back next Monday with another episode of Nudge Cheers.