A Business Model That Every Restaurant Should Peruse

Started from a humble beginning in 1994, Hai Di Lao has grown into China’s most celebrated brand in the restaurant industry with over 80 branches in China’s major cities, and has expanded to Singapore and Los Angeles in 2012. Tsinghua University (China’s MIT) business school researched in 2010 this canteen’s strategies and practices that have been contributing to its success. The resulted scholastic work soon landed on the required reading syllabus of every MBA program in the country. The Haidilao Company was later written on November 11, 2011 in the China edition Harvard Business Review, and some Chinese government officials even made pilgrimage tours to acquaint with the restaurant’s famed customer service first hand.

Unsurpassed Practices Craft Out Incomparable Customer Experience 

Although most service businesses can attribute their booms to the following key drivers: customer-centric company culture and business mission, sound mission driven strategies, effective strategy matching practices, stable and skilled workforce, and motivated and empowered employees, few have executed them as well as Hai Di Lao has. While the owner has embraced these success elements is not surprising, his actualization of them in unimaginable ways is on the other hand most captivating and peerless in the industry. His exercises in employee empowerment, employee motivation, wait time courtesy, dining service, cut-rate opulence, and emotional stimuli are simply unrivaled and are unique in many ways. The following sections will anatomize these startling implementations in detail to divulge why this diner has ascended to the apex of service excellence.

Six Successfully Implemented Strategies Create An Emotionally Overwhelming Experience

Hai Di Lao’s success can be attributed to a business mission accomplished via a set of six carefully designed and well executed objectives. Its mission is set to give every customer an emotionally overwhelming experience, and its strategies consist of six extraordinary measures crafted to fulfill this mission. These strategies bestow the employees with loyalty, dedication, and customer-first attitudes as well as emotionally wow the clienteles on wait time and meal time exuberance under affordable prices. These six key ingredients, to be examined below, include:

  • Customer-centric employee empowerment
  • Loyalty-enhancing employee incentives
  • Unprecedented wait time pampering
  • Superb meal time caress
  • Luxury at affordable prices
  • Leave-no-one-disenchanted

Empowered Employees Flatter Their Patrons Beyond Expectation

The owner has made customer-first a corporate culture that permeates every facet of their operations, and has empowered his stewards to assert judgment calls beyond their trained finesse to please their customers. A couple of examples are probably best to illustrate how serious they have been on delivering astounding customer gratifications. In the first instance, a patron commented to his steward that he would rather have ice scream for his dessert if it were offered on the menu, immediately the waiter asked for the specific flavor the customer would want and rushed to a nearby supermarket to get one on the house for the customer. In the second case, a stewardess packed a small box of appetizer as a gift to the customer just because she overheard his comment that the appetizer was simply superb. It is not amazing that Hai Di Lao had endorsed a customer-centric attitude, nor that they had granted high degree of employee empowerment because all customer focused businesses are fully aware of the vitality of these two strategies. It is instead the customer-first DNA having been so solidly ingrained into their culture that has made the stunning actualizations of the empowerment in practice so extraordinary. It is these empowered deeds driven by customer-first DNA that transformed astonished devourers into loyal consumers to widely advocate their unparalleled eating experiences that are most striking and worth noting.

Brilliant Incentives Motivate Employee Matchless Loyalty and Performance

The owner of Hai Di Lao has been a shrewd player of the incentive cards. Through his cleverly administered stimulants, he has manifested in this mantra that only deeply motivated employees can deliver exceptional customer satisfaction. To accomplish this goal, he sends performance awards in upwards of several hundred RMB to top performers’ parents, he has founded a boarding school for the employees’ children to attend for free, and he has even created a medical fund to pay for employees’ and their families’ major illness treatments. Through these measures, the owner has astutely leveraged the employees’ innate Chinese culture to successfully drive them to treasure their employments, embrace the customer-first culture he has bred, and perform above and beyond their expected service standards. The artifice of giving performance bonuses to the parents, schooling the young, and paying for family major medical expenses is a truly ingenious way of building emotional allures that correspond to China’s cultural upbringing and providing practical benefits that address the country’s inferior medical coverage for the average citizens. These perks not only compel employees to work harder and smarter, but also incentivize their families to laud for the business which in turn induces higher employee loyalty and performance.

Wait Times Are Best Opportunities to Up the Ante on Customer Fulfillment

Hai Di Lao understands very well that a munching event starts when the customers arrive rather than after they are seated. It meticulously architects exorbitant waiting amenities that some feel to be the best part of their entire eating phenomena. When customers need to wait to be seated, which is normal given the restaurant’s popularity, customers of all ages are indulged in droves of convenience and treats free of charge. They created waiting quarters with different enticements to suit various needs and wants. They allocate room with chess and board games for those who like to play, they prepare cribs for small children to rest, they have playgrounds for the active youngsters to have fun, they give manicures to ladies for cosmetic nail treatments, they dispense shoe-shines and shoulder massages, they offer drinks besides tea and coffee, they hand out snacks to those who simply like to nibble while they chat or wait, and they avail computers for those who need to get online. By designing a gratifying waiting overture, Hai Di Lao has completely transformed waiting from a negative connotation into an unforgettable and desirable prelude which has amassed kudos and loyal proponents to champion a word-of-mouth marketing campaign with results far beyond anyone’s wildest dreams.

Customers Are Flamboyantly Caressed at Meal Times

After experiencing the grandiose waiting enjoyment, customers are treated in the dining place with equal extravagance. They have dedicated daycare center to look after juniors to enable the adults to savor their meals, they have wheelchairs for the elderly or the disabled, they present glass wipes to the spectacled, they pass out clips to the long-haired, they dole out curved back cushions on demand, they give people aprons to protect their clothes, they hand out plastic zip bags to protect cell phones from spilling accidents, they supply hot towels for cleaning hands before eating and midway through the meals again, they include a fruit plate as appetizers, they even entertain the customers by demonstrating a kung-fu style noodle making feat in person next to the dining table by their noodle specialists. In case you wonder, they have not forgotten about the restroom comforts. The toilets are Japanese hi-tech products, and they have attendants standing by to hand customers paper towels after they wash their hands. These enrichments were fastidiously furnished to accentuate every dining episode to concoct a complete and insurmountable dining experience for every single customer.

Splendid Experiences Are Provided at Modest Prices

Would all these immoderate complimentary provisions cost an arm and a leg for the main course? Well, no. The best part of Hai Di Lao’s success is that their customer appeasing affairs do not equal to high price tags. Its pricing strategy has been set at the medium level to target middle class folks in big cities; yet its second to none exuberance has drawn many top income earners and its affordable luxury has attracted myriads of underprivileged citizens as well. To completely win the customers over, this eatery publicizes videos of their food preparation processes online for every interested soul to witness the neat, organized, and clean environments where and how their food are prepared daily. Apart from the magnificent waiting prologues and the exceedingly touching dining contentment, this affordable grandeur with superlative hygiene quality alone has coaxed a word-of-mouth whirlwind that has earned the eatery acclaims from left to right. 

Do Not Underestimate the Cross Influencing Power

Hai Di Lao is fully aware that friends and families affect each other on café selections. Hence they make sure that every client, bill-payer or not, is attended with utmost care. This leave-no-one-disenchanted tactic ensures that every customer is exquisitely pampered and thrilled to willfully lobby each other for return visits. By satiating everybody over their wait times and meal times, they have been able to build many staunch evangelists out of their appeased customers. As a result, for friends’ gatherings or family reunions, people often find that there is no better place than Hai Di Lao to hold such occasions. These total feasting fascinations have been so emotionally engaging and overwhelming that customers are compelled to spread the words and come back again and again.

The Differentiator is the Emotional Oomph

Success factors are no secret to many customer-oriented restaurant owners, but why haven’t they soared to the summit of customer loyalty as well as Hai Di Lao has? What did Hai Di Lao know that they did not? The differentiating piece is their mission to positively and emotionally overwhelm their clienteles. Their strategies were chiseled to help best achieve this target. That’s why they were able to wow their customers throughout their entire dining matters. To emotionally enchant customers is no small feat. Hai Di Lao has performed above and beyond their counterparts because they truly understand that Emotion is the key to transform satisfied customers into devoted advocates. Only by earnestly appealing to customer emotions can store owners build strong brand affinity and turn their clienteles into repeat patrons and brand ambassadors. Indeed they have created a legend of pampering the customers to becoming a potent marketing force just after their first visits.

Chi-Pong Wong is a seasoned thought leader in program management, customer experience, and supply chain strategy. He is an influencer on several LinkedIn groups and has published on leading online magazines including Project Times, PM Hut, Project Management, Customer Think, ServiceDirectors.org Business Review, UX Matters, Supply Chain Brain, and other popular journals. He earned a MA in Economics at SUNY @ Stony Brook, and a MS in Computer Science at Duke University. He has worked previously at Arrow Electronics, IBM, STMicroelectronics, NEC Electronics, and is currently with Hewlett-Packard. He can be reached at Linkedin