危 wēi  danger

In-N-Out burger is a chain of fast-food restaurants founded in 1948 in California.  The brand became famous for its limited menu and simple strategy that remains in use today: “Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment.”  While scaling to 240 stores the company has stayed true to its vision – rejecting calls to franchise, leaving the simple menu unchanged and ensuring that it rewards its staff better than its competitors (it is one of the few fast food chains that pays more than state and federally-mandated minimum wage guidelines). And, to maintain freshness its locations are all within one day’s drive from its Baldwin Park distribution center. It’s great at what it does as evidenced by it consistently topping polls like this Zagat report. Given its rejection of growth through franchising and its inability to expand too far from its distribution center I have always thought its tiny menu might be its downfall. Surely its fans would become bored of the offer?

机 jī opportunity

My fears were allayed when traveling with a colleague recently.  On a road trip we visited In-N-Out, after choosing and ordering (very quickly given the lack of choice) I noticed that he ordered ‘off-menu’.  It turns out that In-N-Out has a ‘secret menu’ – this struck me as pretty smart because it allows its fans to make a wider choice and it drives word of mouth marketing.  I looked it up on the web and it turns out it’s not even that secret: when celebrity chef Gordon Ramsay appeared on The Hour, a Canadian TV talk show, he chose an animal style In-N-Out burger to be his “death-row” last meal.

How About…

• Stripping your offer to its simplest version?
• Developing a ‘secret’ offer for your best customers, making them feel privileged and deepening their affinity of your brand?

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and, just in case you’re interested (and out of the loop like me) here are some of the not-so-secret menu items:

危 wēi  danger

As I outlined in a post last year the Indian agricultural market is tough.  Farm ownership tends to be heavily fragmented, the infrastructure is often poor and historically the supply chain has been clogged by middlemen. This makes life difficult for both farmers and the buyers.  For example, often farmers would have to travel for days to a market with no knowledge of current prices, once there the exploitative middlemen could pay below the market rate and refuse to pay any premium for quality.  It has been estimated that farmers were losing up to 60% of the value of their crop as a result.  This in turn disincentivised the farmers from improving their crop quality and made supply to the industry’s big buyers unpredictable.  Large food buyers, such as ITC Limited (an Indian conglomerate), would surely have to accept this status-quo?

机 jī opportunity

No, to the contrary ITC has harnessed technology to overcome these structural problems by investing in internet kiosks in rural villages.  The kiosks, named eChoupals, enable the farmers to sell direct to ITC at an agreed price, give access to best practices and enable them to place orders for agricultural inputs such as seeds and fertilizers.  In order to instill trust in the system ITC trains a local farmer to run the system and places it in their house – on average each serves 600 farmers in the surrounding ten villages.  To ensure that they remain incentivised the sanchalaks receive a small service fee.  Even after this service fee it is estimated that farmers’ profits have increased by more than a third and ITCs costs have reduced. The conglomerate plans to scale up to 20,000 eChoupals by 2012 (from 6,500 today) potentially servicing 15 million farmers.

How About…

• Harnessing technology to disintermediate inefficient value chains?
• Empowering local talent to assist in supporting your customers?

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