Dunkin Donuts – Time to Make Sales Compensation and Sales Competencies Work

In my town, Dunkin Donuts, McDonalds, Burger King and Wendy’s have a lot more in common than drive-through fast-food. They all employ minimum-wage employees who, if they were doing imitations of themselves on a comedy show, would get lots of laughs because of their broken English and heavy accents.  Unfortunately, their inability to understand and be understood by the customers who visit, is real and the constant mistakes made filling orders pale in comparison to the money these franchisees must be losing as a result.

The franchisees must all be accountants (no offense to that profession)!  Who else would fail to see the obvious downside to this minimum wage problem?  At Dunkin Donuts for example, they even attempted to train the employees to ask, in broken-English, “Wuhyue  lie to tryae cumbo?”  Of course, since customers failed to understand what they were asking they simply begin placing their orders.

If it were my Dunkin Donuts franchise, I’d want my employees to welcome my customers with a,”Hi, thanks for driving through this morning! I’m Dave, and it’s my job to make sure I get your order just right.  What’s your name?”

“OK Bob, what can I get for you this morning?”

“Thanks. And for just 65 cents more I can give you a bagel, muffin or two donuts with your coffee.  Which would you like?”

“And would you like a tray for your drinks?  Do you want any straws?”

If I had a buck for every time I had to ask for a tray at Dunkin Donuts, or a straw at McDonalds I’d be a guy with 250 more bucks.

It’s not hard to teach people to do this!   But you can’t do this with minimum wage workers that don’t speak fluent English.  So how much are these franchisees saving by hiring these workers?  Let’s do the math and figure it out.  We’ll use my Dunkin Donuts example again.  If I have four employees at $7.40 per hour, that’s around $30 per hour.  If I wanted to hire people I could teach to successfully delight my customers and up sell them as well, it might cost me double that or about $30 an hour more.  Can the new, capable employees generate enough add-on business to justify $30 an hour?

During the 5-9 AM hours, two of the four local Dunkin Donuts, right across the the street from each other, each have approximately 80 cars drive-through, and an equivalent number of walk-ins each hour.  Even though we know they order more, let’s just say that each one is ordering a medium coffee for around $1.50.  That’s $240 each hour- just for the coffee.

If they succeeded in up selling just 25%; of their customers, 1) because they were so friendly and helpful; 2) because they could speak and understand English; 3) because we really do want the donut, muffin or bagel and just need an excuse to buy them; that would be an additional $100 or so each hour, tripling the $30 an hour they would need to cover the additional payroll.

I know they have product costs too but we have them covered.  I also know that people buy more than a coffee and that we’d get better than 25% to buy more than just a single bagel, muffin or donut.  The bottom line is that it would work if the franchisees could look beyond the cost of a single-worker.

You don’t have to be a fast-food franchise to learn from this lesson either.  Most companies are short-sighted when it comes to compensation and don’t see how paying more gets you more.  Of course a top salesperson costs double what an ineffective salesperson costs.  But a top salesperson will sell three to five times more than an ineffective salesperson.  In that case, how could you not structure your compensation around a top salesperson?

Bottom line. Pay more and you have a great chance of getting much more as long as you know to attract, qualify and select the right people.