Panera Bread Broken Promises, Customer Service Failures Cost Thousands

Real Customer Service Story About Amenities, Expectations, and Customer Value

Reprinted with permission from Panera.com

It seems obvious that every retail business owner, manager, and employee knows that broken promises and customer service failures can't be good for business.   But its less obvious that retail business owners, managers, and employee fully comprehend - or care - about how much broken promises and customer service failures really cost.  

In the real customer service story that follows, a customer experience at Panera Bread restaurant illustrates  how free amenities can cost a business thousands when they don't meet customer expectations. What is the true value of a disappointing customer service experience?  After doing the math, it becomes obvious that employees are stealing thousands from their employers every day without appropriate consequences.  

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Whenever I have to work on a Saturday, doing that work in a Panera restaurant makes it less painful.  Panera's music, food, and employees are generally positive.  Panera also has free WiFi, which is an essential component for a working lunch.

Panera puts a time limit on its WiFi during peak lunch hours, which it has every right to do.  Today the WiFi didn't reboot after the forced lunchtime moratorium, so I sought out the manager to request a reboot. 

After quoting the no-lunchtime WiFi policy to me (which changes according to the manager on duty at this particular location), she looked at her watch, realized that it was well past the forbidden hours and told me she'd take care of it.  She then walked to the corner of the restaurant furthest from the office where the WiFi modem is located and proceeded to chat with a customer.

An hour and a half and three promises from two different managers to "handle it" later, I had run out of non-WiFi tasks to do, so I packed up and headed to Panera location #2, where I was also unable to connect to the internet.

The manager at Panera location #2 gave me the phone number of technical support, which turned out to be a corporate technical support number.

I was given another number to a company which did, in fact, provide technical WiFi support to every other Panera in the state of Florida except for the Orlando locations in which I couldn't connect to the WiFi. Tech support #2 sent me back to the Panera corporate tech support person, who told me that I wasn't allowed to be talking to them and then asked to speak to their Panera manager on my phone using my minutes. 

During that conversation, the Panera technical support desk took my time on my phone using my minutes to have a conversation with their Panera manager about WiFi protocol and company policy.  Apparently at the end of that corporate "coaching" conversation, the Panera technical support person instructed the manager using my phone and my minutes to tell me that the problem must be with my computer.

I might have considered that to be a plausible conclusion if I hadn't connected to the WiFi at that same Panera location with the same laptop computer about 20 times in the past month.  Since I had spent a good number of hours in my satellite booth-by-the-window office, though, using the internet there, my conclusion was that the Panera team was either unwilling or incapable of helping me to solve my problem.

  Three hours after the WiFi failure began, I gave up, taking my laptop and my Panera food budget elsewhere.

Now, we all know that free internet service at Panera Bread restaurants is an amenity, not their core business.  Many people - including the two managers at Panera location #1 - would argue that a customer doesn't have a right to complain about a free service that is offered out of the kindness of the hearts of the Panera corporation.

Here's why I disagree.

Panera advertises free WiFi on its website as one of its "cafe features."  There is a Facebook discussion about the free WiFi on the official Panera Facebook page.  Free WiFi is advertised on the front door of many of its stores.  The company is using its WiFi offering as a unique selling proposition which differentiates it from its competitors.

  Free WiFi is not a free service offered out of kindness of any hearts that beat in the Panera boardroom. Free WiFi is part of Panera's branding, positioning and customer loyalty marketing and because of that, Panera has adopted WiFi as one of its offerings.

As with any offering, if you won't deliver it willingly and you can't deliver it well, you shouldn't offer it at all.  Because when you create customer expectations with an offering, you lose points when you fail to meet those customer expectations.

This is not about one day of Panera WiFi service failure, management indifference, or technical runaround.  This is about the knives which Panera can never manage to get clean, the lemons and napkins that you have to ask for, the temperature extremes, the lack of personnel to wipe off tables during rush hours, the perennially messy restrooms, the food-soiled napkins on every plate, and the sandwiches set on top unsanitary non-food grade thermal paper receipts. All of these things are part of the average Panera customer and service experience lately.  Putting up with all of this while paying $4 for half of a peanut butter sandwich or $8 for a not-so-remarkable salad is worth it for one reason - free WiFi. Take that away the WiFi and all the rest of the service failures become more important and more unacceptable.

This is also about the ongoing customer service feedback which is solicited on the cash receipts (buried underneath the food) which solicit customer input, offer prize money that never seems to get awarded for that input, and it's about all of the complaints and suggestions about all of the above which seem be ignored.  An offer of management contact is offered at the end of every survey.  I requested management contact once.  Months later I'm still waiting for the Panera followup to occur.

If you're not going to do something about customer feedback, then you shouldn't ask for it at all.  If you won't deliver management follow-up willingly, or you can't deliver it well, you shouldn't offer it at all.

This also isn't about the $10 that Panera didn't collect from me today.  It's about the $10 that they collected from me several times a week in the past and the $10 a day that they are less likely to collect from me as often in the future.  It's not about a single purchase, it's about the lifetime value of a customer.

It's not about what Panera didn't give me today, it's about what they did give me - a reason to not return.  And a reason not to meet clients at Panera and a reason not to treat employees at Panera, and a reason to replace positive Panera word-of-mouth advertising with this blog post.

If any one of the four Panera employees or the one contractor that I dealt with today had stolen $1000 out of the cash register, I can only assume that there would have been consequences.  It's an unfortunate daily occurrence in retail companies around the world that the loss of $1000 in revenue from an alienated regular customer will not be met with the same kind of consequences.

The reality is that Panera doesn't really need to be concerned too much about its customer service experience or its customer service failures right now because it has defied recession by opening stores, raising prices, and making profits while the U.S. restaurant industry as a whole has been moving in the opposite direction.  In my opinion, the business crowd with laptops and cellphones that Panera was able to continue to attract throughout the recession with its free WiFi and its community rooms gave Panera an edge in the casual dining niche and contributed significantly to its success in the midst of economic downturn.

When business is good, it's easy to get lulled into a false sense of security and ignore the "little things" that chip away at customer trust and loyalty.  But things are rarely "little" to the customer.  By the time you realize the cumulative effects that the lack of constant attention to the foundational customer aspects of retailing have had on your business over time, it's usually too late to do anything about it.  Circuit City, Abercrombie & Fitch (ANF), and ExxonMobil's (XOM) company-owned convenience stores come to mind.

It's never as difficult to keep a loyal customer as it is to win one back.

So, for the three hours that I was unable to research the blog I wanted to write today, this blog was writing itself.  The point is not that my personal little complaints and my bad day get aired in public (and probably criticized as petty whining).  The point is that antibiotic-free chicken, menus with calorie counts, and "Hot Bread!" aren't everything.  Because Panera is not in the food business.  Like every other retail company on the planet, Panera is in the people business.

Just like every retail customer experience, we began with a service promise and we will end with one too.  This one is from the Panera.com website...

"Our bakery-cafes are an everyday oasis. A place to gather with friends or enjoy a quiet moment alone. Comfortable, friendly, fashionable.  Slip into one of our seriously comfy chairs and stay awhile."

As with any offering, if you won't deliver it willingly and you can't deliver it well, you shouldn't offer it at all.