Like Moths to a Flame: Wi3 Keynote Danny Meyer on How to Attract Customers

Danny Meyer

Since Danny Meyer first opened New York City's acclaimed Union Square Café in 1985 at the ripe old age of 27, his name has become synonymous with the term "hospitality business." Meyer, the author of Setting the Table: The Transforming Power of Hospitality in Business (HarperCollins), has turned his love of food into a kind of hospitality empire as founder and president of the Union Square Hospitality Group (USHG), which includes 11 restaurants. But USHG is not a conglomeration of chain restaurants -- each of Meyer's businesses is distinct and distinguishes itself with warm hospitality and consistent excellence.

Meyer will kick off the education sessions at the American Booksellers Association's Third Annual Winter Institute (Wi3) on Friday morning, January 25, with a keynote presentation, gleaned from more than two decades of experience, on how businesses can distinguish themselves and attract and keep customers by putting an emphasis on hospitality.

In Setting the Table, Meyer notes, "Hospitality exists when you believe the other person is on your side.... Hospitality is present when something happens for you. It is absent when something happens to you."

Considering USHG's reputation for serving its patrons and going the extra mile for the customer, it is noteworthy that one of Meyer's tenets of great hospitality is putting the customer second. "The process of writing Setting the Table was to analyze what we were doing successfully," Meyer told BTW in a recent phone interview. What he found was that, intuitively, his company put the customer second -- after its own employees. And that's because the degree to which an employer provides hospitality to its staff, he explained, is the degree to which they will provide it to the customer. So the employee has to come first.

Meyer was born and raised in St. Louis, Missouri, in a family that enjoyed good food, cooking, get-togethers, and travel. His grandfather was a successful businessman who ran a chemical company, while his father, Morton Louis Meyer, formerly an army intelligence officer stationed in France, was an entrepreneur. In his book, Danny Meyer describes his father as "my childhood hero: a hedonist, a gastronome, and a man who passionately savored life"; however, Morton Meyer was also a man who enjoyed risk.

Though he was undoubtedly creative and innovative, most of Morton Meyer's numerous business ventures -- though often initially successful -- ultimately failed. In the late 60s, his travel agency went bankrupt when it expanded too quickly. Afterwards, he leapt into the hotel business, then opened a business selling package group tours (which thrived for many years), and later returned to the hotel business.

Only a few years before opening Union Square, Danny Meyer had been planning to practice law and then go into politics or public service. "I don't think I knew that I was going [into the food business] until the eve of taking the LSAT. I was complaining about taking a test for a career in law and my uncle [Richard Polsky] observed, 'All you ever talk about is food.' It never dawned on me that food could be a career path. I had flirted with journalism, law, but I never thought a career in the food business was possible -- that you could actually do that."

When Danny Meyer thought about opening his own business, and then, seven years later, expanding the business, he had a deep-seated fear of repeating his father's mistakes. "I was incredibly concerned about not going down that path," he said. Ironically, the interests his father shared with him -- including travel, language, and art -- are important factors in Union Square's success. "I was able to appreciate and express [these things] with Union Square Café," Meyer explained.

Union Square Café pioneered a new breed of American eatery, combining imaginative food and wine with excellent hospitality, a cozy ambience, and great value. It twice garnered the New York Times three-star rating and has been voted Zagat Survey's Most Popular Restaurant in New York City for seven years running. In 1994, Meyer opened Gramercy Tavern.

The person who ultimately convinced Meyer to expand was Rich Melman, founder of the Chicago-based Lettuce Entertain You Enterprises, which includes about 70 restaurants. "I told [Melman] my three prerequisites for opening another restaurant, which I knew would be impossible to meet," he recalled. "Number one was that the restaurant would have be as excellent in its niche as Union Square Café. Number two, Union Square Café would have to improve with a new restaurant, and number three, my balance of work, home, and life would [also need to improve]. I knew that all three would be impossible."

Melman, however, urged him to rethink his prerequisites. "Basically he told me it was a cop-out and said, 'You can do all three of those things.' The words rang in my head."

In addition to Union Square Café and Gramercy Tavern, USHG includes Eleven Madison Park, Tabla, Blue Smoke, Jazz Standard, Shake Shack, The Modern, Café 2, Terrace 5, and Hudson Yards Catering. Meyer has made each bistro unique, as opposed to simply creating a chain restaurant. "I wanted to explore new ground," he said, "and use my own imagination for new ideas.... I just don't want to write the same book over and over again." At the same time, he is not opposed to growing a particular restaurant, which USHG could do in the future. "There is a chance that I may grow some of these restaurants, such as Blue Smoke, so there may be a time when we do that."

Key to the success of Meyer's restaurants is that all-important attribute: hospitality. And without the right employees, you cannot provide great hospitality. In Setting the Table, Meyer discusses his method for finding the right people, calling it the "51 percent solution" -- a concept that Melman taught him and something Meyer refers to in the book as the "cornerstone of my business." He provides a parable that likens every business to a light bulb that has a goal of attracting the most moths. The business learns that forty-nine percent of the reason moths are attracted to a bulb is for the quality of its light ("brightness being the task of the bulb") and that 51 percent of the attraction is to the warmth projected by the bulb (heat being connected with the feeling of the bulb). He writes: "It's remarkable to me how many businesses shine brightly when it comes to acing the tasks but emanate all the warmth of a cool fluorescent light."

Meyer said that to find those people who will provide great hospitality USHG's staff performance reviews weigh both technical job performance (49 percent) and emotional job performance (51 percent): "How staff members perform their duties and how they relate to others on a personal level." A 51-percenter has five core emotional skills: optimistic warmth, intelligence, work ethic, empathy and self-awareness, and integrity.

"Most [of these traits] are largely not discernible on a resume: these are a compendium of emotional skills," Meyer said. "We're looking for someone with a hospitality quotient ... we arrived at a number of questions we ask. We use open-ended questions to shed light, because you don't just ask someone, 'Are you empathetic?' You ask how you used your sense of empathy in your last job. Now, 80 percent will look at you like you're crazy, but 20 percent will give you a meaningful answer."

Finally, in looking toward his keynote speech at Wi3, Meyer said he "absolutely" sees similarities between the hospitality business and the book business. "The actual product you sell and how well you deliver it is not as potent as it used to be as a deciding factor [for a consumer]," he said. "There are thousands of booksellers who sell the same book, so why should you buy it from them? The way you make people feel is 'hospitality,' and that goes from restaurants to bookselling to hardware stores -- the way you make people feel.... You're trying to find an edge. We [businesses in general] haven't done a good job of distinguishing between service and hospitality. Service is how a product is delivered. Hospitality is how you make a customer feel." --David Grogan