Today on the podcast, we sit down with John McHugh, the Director of Corporate Communications at Kwik Trip, to answer the question that those who have never been to a Kwik Trip may be wondering: How did a gas station develop such a cult following??
Obviously, for those of us that have experienced the luxury experience that is Kwik Trip, this seems like a silly question. Of course, we all know Kwik Trip is perfect in every way but let’s dive deeper into those attributes.
John discusses Kwik Trip’s culture and the significance put on it both internally and externally. Kwik Trip is all about creating satisfied employees who feel they’re a part of something bigger and customers who feel the Kwik Trip experience is unmatched. This loyalty is what has led to such immense success–so much so that many have been spurred to take graduation, prom, and even wedding photos at their gas stations.
So tune in and learn a thing or two about developing a memorable brand image from the experts.
And with that, we’ll see ya next time!
_______
Richie Burke:
Hey everyone. Welcome back to this episode of the GoGedders podcast, brought to you by GoGeddit Marketing and Media, ggmm.io, and our good friends over at On Milwaukee. Today we have John McHugh, the director of Communications at Kwik Trip. I wanted to have him on one because I give his company a good amount of my money. I’m a big fan. And two, I also saw him speak at Milwaukee Rotary Club a couple months ago, thought he had a great message for business leaders. And there’s a lot of lessons on what makes Kwik Trip so successful that can really be applied to any business or brand, regardless of what industry you’re in. So happy to have on John today. John, welcome to the show. Thanks for coming.
John McHugh:
Thank you. It’s an honor to be with you.
Richie Burke:
Um, I was doing my homework. I looked at your LinkedIn profile and it said you’ve been at Kwik Trip for 17 years. I’m just curious, before we dive in, what’s, what’s your backstory and how did you end up the director of communications at Kwik Trip?
John McHugh:
You know, the irony is that although I’ve been here over 17 years at Kwik Trip, I would be considered one of the newbies in the senior management team. Uh, we have a lot of our VPs and upper management people who have been here, uh, 20, 30, even 40 years. Um, our turnover right here at the corporate office at QuickTrip is less than 1%. Cause once you come in, you just never leave. So I actually was recruited by our owner and C E o Don Zilo. I used to teach, uh, high school and adult education. And in 2004, Kwik Trip was just starting to do a revolution of their culture. Don had heard a woman by the name of Anne Rhodes, who at that time was the HR person for Southwest Airlines. He heard her speak and he said, you know, I wanna create for the convenience store industry what <inaudible> could do, what Southwest Airlines has done for the airline industry.
You know, be the top-notch in customer service, guest service. So Don reached out to me and said, would you be inclined to come and work at Kwik Trip? And the conversation was actually through a mutual friend. Uh, and I said to my friend, I said, I don’t wanna go pump gas. And he said, no, I think it’s larger than that. So I met with Don, and Don said, we wanna start, uh, uh, redevelopment of our training program to do leadership, uh, much more emphasis on culture. So I said, well, I’ll give you one year. And often decide, well, I was here all of three months and said, I’m not leaving, because the higher up you went in the company, the nicer the people got. So, um, I’ve been here ever since. Now, when I started back in 2004, we didn’t even have a public relations department. We were a small company, um, only about 325 stores at that time. Um, we only had about, uh, 7,000 coworkers at most. And it wasn’t really till, uh, about five years after that that, uh, we became a little bit more well-known here in the upper Midwest. And Don came to me and said, well, what would you start a PR department? So that’s how it all happened.
Richie Burke:
John, I wanna dive into the fact that senior leadership’s been there, you say 20, 30, 40 years. Once people come, they don’t leave. I also know it’s, it’s hard to get into just watching some of your speeches before. Can you just talk about how Kwik Trip is structured, maybe as a business that helps retain talent and then what you guys do at as a culture to retain that talent as well?
John McHugh:
Yeah, a couple things come into play. Um, although internally we don’t use the term servant leadership, that’s in essence what we have here. Uh, Don, our owner and c e o is the quintessential servant leader. Uh, it’s not about him. It’s not about his ego. It’s all about, um, helping all the rest of us be successful. So that, that really filters down through the whole organization. So for example, if you come to the corporate office here at Kwik Trip, you come to the parking lot. There’s not a reserved sign that says, here’s the spot for the CEO and president, uh, Don Parks where all of us park. Well, when you have a leader at the very top that leads like that, uh, the rest of us follow. So there’s really a culture of compassion internally here, uh, for everybody then that we think translates into retention at, at all levels. We often studied the 12 questions from Gallup that make a top workplace. And one of the most critical questions we think is, uh, this statement, my supervisor, someone at work cares about me as a person. And when you have that kind of culture internally, it means people don’t leave. And we’ve all heard the old adage is that people don’t leave companies, they leave managers or bosses. Well, when you just have a phenomenal leader and boss, uh, not just at the highest level, but all the levels, people don’t leave.
Richie Burke:
And do you guys do something what with profit sharing or ownership or some, something like that? I remember you mentioning at Rotary.
John McHugh:
Yeah, we do. Um, we’re very fortunate that the family that owns us, uh, Don uh, and his family, they take almost no profits out of the company. 40% of the pre-tax profits come back to all the coworkers. Now as you’re listening, you might think, well, that ain’t so great. That means the owners are taking 60% and not true. I’ll be completely transparent with you. This is how it shakes out. 27.5% of our profits go to Uncle Sam to pay taxes. We’re, uh, let’s get our name S corp. We’re not a C corp. So we didn’t get some of the tax breaks that came out about five, six years ago. 27.5% of our profits go to capital expenditures. Uh, that’s to build the 50 new stores a year or the new Dairy Edition. Well, if you do the math, you got 40% to all the coworkers, 27.5 to Uncle Sam, 27.5%, uh, for CapEx.
That means you only got 5% left. And that’s what goes to the family that owns us. And that’s all four generations. So that means for all of our coworkers, doesn’t matter if you’re full-time or part-time, um, making the donut, uh, distributing the donut, selling the donut, um, you get the profits. Now, practically, how does that 40% shake out? Uh, last year for example, it meant that every single coworker got a 12% cash bonus and 5% in their 401k. Even if they didn’t put a put a dime into it, they still got the 5% in their 401k. So what it practically translates into, people say, well, I come into Kwik Trip and the customer services phenomenal. The coworkers are always happy. Why is that? Well, they, they’re running the company like they own it because if they treat that customer well, that customer comes back and guess what? Their profit sharing goes up this year. So we have, and then, um, literally thousands and thousands of coworkers, well over 36,000 now, who all run the company like they own it because the profits come back to them. So we’re unique. We’re, we’re the only company I know of the United States that consistently shares 40% of pre-tax profits
Richie Burke:
And that that trickles down to the 18 year old cashier. Yeah,
John McHugh:
Yeah. Matter of fact, we, we, we have, we have, uh, high school students who, uh, at the end of the year when we give out the bonus checks, you know, they’ll get a bonus check for close to a thousand bucks because, you know, they’ve been working part-time, enough hours, and they come home and dad will say, geez, all I got from my company was a Turkey. And here you got a part-time job. You got a thousand dollars
Richie Burke:
Part-time job at a gas station taking home a bigger bonus than his parents. That’s funny. Um, I wanna touch on the brand that you guys have created. Really an amazing brand in a very unsexy industry. You guys are, you guys are a gas station, yet you’ve created this cult like following your social media team’s. Amazing. The, the, you know, the product is is great. Can you talk about how that’s evolved over the years that you’ve been there? Was it always like this?
John McHugh:
It, it, it hasn’t always been that kind of cult-like following and, and to be honest with you, internally, we’re very humbled by that. Um, it’s not like we sat down and did a strategic planning session say, Hey, our goal is to be the place where people want to take their graduation pictures, or they want to have wedding pictures taken at a Kwik Trip, or they’re gonna follow the banana truck everywhere. Uh, that was never our intention. Um, explicitly what we just wanted is we wanted to create an experience when you came into a convenience store where there were clean bathrooms where the coworkers were always friendly and the food was fresh, we really never anticipated that this cult following, uh, of really our brand would grow as much as it has. Now. We dabbled into it a little bit early on. So for example, we, some of the merchandise you can buy with Kino, Kwik Trip t-shirt or Woody, and it just, it’s sold like gang busters and we were surprised by that. So it’s just been expanding because of that. For example, there’s a, there’s a, a website out there, uh, for the Kwik Trip enthusiasts called the Kwik Trip Enthusiast patient. We have nothing to do with that. It’s all run by our, our guests, our customers, and it just is taken off. Uh, again, we’re very humbled.
Richie Burke:
That’s amazing. Um, can you also touch on, you touched on this in when you’re, when you talk turning satisfied customers into loyal customers and the impact that that makes on your business, how do you guys go about that and what’s your philosophy there?
John McHugh:
Yeah, our philosophy is our aim is not to have a satisfied guest. Uh, again, this is a national statistic. Um, 65 to 85% of all customers who describes themselves as satisfied shortly thereafter jump to the competition. Um, cuz this is what it means. If you’re satisfied, price point was fine, you didn’t get gouged, uh, the product was okay, you didn’t puke after you ate the hamburger, uh, we didn’t yell at you when you were in the store, you were satisfied. The problem is that some other company comes along, it doesn’t simply satisfy you, they wow you. So then you go from the place where you’re satisfied to the place where you’re wowed. Uh, and then when you’re wowed you become a loyal customer. Now, we know at Kwik Trip, cuz we measure this, um, a loyal guest for us spends twice as much in our store in one year than a, than a satisfied guest does.
They’re the ones who’ll say, you know, I drive past three other gas stations to get to a Kwik Trip that’s loyalty language. Or they’ll say, you know, in the last 20 years I’ve never purchased bananas at a grocery store. I buy all my bananas at Kwik Trip. That’s loyalty language. Uh, and for us, we think that’s done in several different ways. Um, but one of the biggest drivers we think is, is compassion, is letting people know that they’re welcome in our store. Uh, stop back again. See you next time. We think taking care of that guest in, in a very personal manner makes a difference. And I’ll give you a perfect example. You know, back in 2004 when we started this whole cultural revolution that year we received 21 unsolicited guest compliment letters to the corporate office where somebody wrote into Kwik Trip. Today I had a great experience. Well, we started publishing those letters. Um, if they’re really great letters, stories, um, we shared them in training here internally, or I shared them externally with public relations. And when you take a culture where you celebrate goodness, goodness, celebrated creates more goodness. So this last year, unsolicited, this is how many guest compliment letters we received, 2,663. And sometimes when you read the letters, there’s not a dry eye in the house because you, you realize the great ways, uh, our coworkers are taking care of the guests so that that’s what creates loyalty, those experiences.
Richie Burke:
You’re a, uh, you’re a big Jim Collins guy. Yeah. You talked about the importance of companies being, well more profitable if their employees feel that their work actually has meaning they’re making a positive impact beyond themselves. Can you touch on that and how you implement that to people working at a gas station?
John McHugh:
Yeah, you know, Jim Collins talks about the fact if you wanna be 16 times more profitable than the stock market average, make sure all your coworkers can plug into a sense of purpose. And he highlights, as do many authors, that that purpose has to be larger than just making a buck or selling stuff to people. You have to help your people see that what they do really makes a difference in the big scheme of things. So one of the pieces for Kwik Trip is our mission statement. Our mission statement’s pretty simple. It’s to treat others as you’d like to be treated to make a difference in someone’s life. It’s the golden rule applied to business, everybody knows it. But, uh, we literally recite that mission statement before every single meeting at all levels in the company to remind ourselves that this is why we’re here.
Um, and when people know that what they did today was more important than just selling gasoline and hotdogs, um, that how they took care of that guest, uh, really made a difference. That’s what brings them joy and satisfaction. Uh, and really what’s, what drives them to continue to do that. For example, here’s the most common letter that we get. I stopped at a Kwik Trip and I had a flat tire. I didn’t know how to use the air compressor. I didn’t know how to put it on a new tire. And the number of times in which our coworkers will, uh, literally change the spare tire. And then the guest, well, I say, well, I wanted to give the coworker five or 10 bucks. And the coworker said, no, we don’t accept that. We just do it cuz it’s the right thing to do. Well, you know what, that coworker then go home goes home that night. And, and there’s a sense of satisfaction. I it was good to help that person because here’s the reality is that most of us on this planet are good people and we wanna do good things. And when you have a place of employment that encourage you to do good things, um, people are happy.
Richie Burke:
And can you touch on that one story? You were speaking at Mercury and Marine, you went up there and I thought there was some good takeaways that people would get no matter what they do on finding a way that they can make a big impact in this, in this world.
John McHugh:
Yeah, you know, I, I’m privileged that I get to go throughout our market, Wisconsin, Minnesota, Iowa, and actually give keynotes on purpose and compassion at work. And a lot of times, uh, the reaction is, well, yeah, okay, you guys can do it there, but I don’t know if we really have a deep sense of purpose or we don’t talk about it. So many years ago I was over in Fond Du Lac, Wisconsin, uh, talking to the management team of Mercury Marine, you know, the company that builds the boat motors. And as I’m doing this talk, uh, their lead engineer was in the back corner of the room and I could tell by his body language, he’s not buying what I’m selling. So at the end of the presentation and he said, well, any questions, comments, concerns, rebuttals. And from the back corner of the room, he shoots up his hand and he points to my slides and he says, this just doesn’t mean anything.
He said, there’s not a purpose in what I do. I design and build boat borders. There’s not a purpose in that. Well, when he was done, I said, Hey, can I just have five minutes? Uh, I want to tell you a story. Um, the first, uh, seven years of my life, my family lived in South Milwaukee, Wisconsin. My dad was a construction worker. Uh, he had never graduated high school. Um, my dad made Jeff Foxworthy look like a culture genius. Okay? I used four letter words, not the good four letter words, the bad kind as nouns, adjectives, adverbs, prepositions, coms, smoked three packs of cigarettes a day, uh, ate the fat off the pork chop because that’s where all the flavor was at. And most of the liquid that he consumed was fermented in nature. Okay, get the picture of John Sr. Well, my dad had an Irish temper.
And so if things hadn’t gone well, the job site that day, we knew about it when dad got home, you know, the old adage, if something doesn’t go well at work, you leave it at work, you don’t break it home. That wasn’t true in the Macu household. Uh, if it hadn’t gone well on the job site, as soon as dad walked through the door, we knew about it. But my dad’s attitude changed completely at the beginning of every summer. Uh, and this is practically how it happened. And when it happened, he’d get home on, on Friday of Memorial Day weekend, which for all of us in Wisconsin’s kinda the unofficial beginning of summer. And he went back our 1973 Dodge Charger up to a, um, claran boat that had a mercury marine on the back. And then we would drive five hours north to northern Wisconsin, past Mercer, a little place called Pine Lake.
And we’d get there about 1130 at night. Dad would put the boat in the water and he put me in the boat. Uh, I was only four years old at the time. And then we would drive out to the middle of the lake and he turned the boat motor off, put the anchor down, put my life jacket on nice and tight and put me in his arms and throw me in the lake. And dad would come in and go swimming and we’d swim till about midnight and then get back in the boat and go back to the cottage. And for the next two and a half days, my dad’s attitude completely changed. Uh, he was fun to be with, he was relaxed and not like he was my dad. But the ideal older brother you always wanted to have. Well then on Monday of Memorial Day at noon, dad would put the boat back on the trailer and we would travel south back to Milwaukee.
Well if we have any name of our listeners who are familiar with Wisconsin, you know, if you travel from northern Wisconsin to Milwaukee, you go on Highway 41, right through Fond Du Lac, right past the Mercury Marine plant. It’s got the big logo on the outside. Well, I would be in the backseat of the charger and my dad would say to me as I was only four years old, Johnny, look out the window. You see the big building, that’s the home of the boat motor. And I remember being a four year old boy in the backseat of that car, looking at that building, being so grateful that it existed. Cuz in that building they built something that changed. My dad and I look back at the engineer and I said, sir, um, I don’t know if you were working here at Mercury Marine at the time, uh, but if you were, I want thank you for building something that changed my father, my dad’s now gone 10 years.
The best memories I have of my dad are cuz of that boat. I said, thank you for doing something that really changed my dad, big tough engineer. And there’s tears streaming down his cheeks. And he walked out of the room that day and he said, Hey, thanks for teaching me that. My job has a purpose. I thought I designed to build boat motors. I realize now that I bring joy to people’s lives and there’s a difference. So I I I’m a firm believer that I don’t care what the industry is. I, I think all of us can get to that deeper realization and say, what is it that we do in our jobs that really matters that makes a difference in our communities? Matter of fact, just yesterday, um, I emailed one of our news anchors at a, at a local TV station. I said, I just wanna thank you that when I turn on the evening news, your smile and your warm personality, it makes a difference. I mean, I’m more inclined to watch the news because of how you give me the news. And she emailed back this morning, she said, you have no idea how you just made my week. I just think as leaders, we need to do a better job of helping our people know that what they do really matters. Cuz when they find that they find satisfaction,
Richie Burke:
Uh, that’s a great example. I agree a hundred percent as well because you got, you got this in your example, you got this big tough engineer who’s just probably going in and punching the clock for 30, 20 years. And it seems like your story, and I’m sure there’s hundreds of stories out there like that from their boat, boat owners could have been communicated better to that staff and they would’ve found more purpose in their work. So do you think that’s a responsibility of the senior leadership team to be sharing those examples? Or like when you were talking about, hey, we’ve received over 2000 unprovoked letters in the mail banking, you guys who are working at the gas stations this year, you guys are making a difference. Do you think that just needs to be better communicated within most companies?
John McHugh:
Yeah, I actually think that for the best companies, they have a corporate storyteller. Now that could be the ceo, uh, maybe it’s the vp, maybe it’s somebody else in the organization, but somebody that’s the corporate storyteller that tells those stories. Not simply from a head perspective, but from an a effective perspective from the heart perspective to say, Hey, you need to know all of us. The letter we received today or the email and, and the just a phenomenal way in which all of you’re making a difference. I think the, the best companies have a corporate story tell. It doesn’t matter what role they have in the company, as long as they’re the ones telling the story.
Richie Burke:
That makes sense. Do you have any other overarching pieces of advice to create a great culture and retain talent that you haven’t gone over yet?
John McHugh:
You know, and we at Kwik Trip don’t think it’s rocket science. And we think it’s a, a couple simple pieces. Um, that compassion piece. We talked about taking care of the guest, but we also believe that you have to take care of your coworkers First is that we can’t expect our our people to work at eight hour shift and be compassionate with the public if, first of all, we haven’t treated them with compassion. Um, you know, I, I know there’s some people who, who work in toxic work environments and frankly, I I don’t know how you can provide great guest service in that kind of environment. So I, I think it’s important that we take care of people internally. One of the unique ways we do that here at Kwik Trip, we have an internal organization called Families Helping Families where it’s optional, but you can have 25 cents or 50 cents taken onto your paycheck.
It goes into this big pot of money. And then if one of our coworkers finds themselves in a difficult position, uh, maybe they lost their house due to a, a fire or spouse lost their job, or maybe they have some, uh, pretty serious health issues and, uh, healthcare expenses are just getting too much for them. We give them the money to recover and it’s not a loan, it’s just a pure gift. So last year we gave out, uh, well over $300,000 to our coworkers just from our own money Doesn’t come from our ownership just comes from all of us. Well, here’s why it makes a difference for a great workplace is, you know, you’ve heard the old adage or that my company’s my second family. Our coworkers say that all the time. Kwik’s my second family. And it’s not a cliche cuz what does family do? Family takes care of you in your most critical moments. So, you know, someone’s helped, uh, financially from all the rest of the 38,000 of us. You know, that, that certainly makes a difference. So that’s another unique piece I I think any company can do. Uh, just a matter of taking care of each other internally with compassion so that we can do it externally.
Richie Burke:
Love it. Um, just some quick questions then I’ll let you go. Okay. Um, I, uh, saw on Instagram you guys posted about Maple milk this morning. New product. Any, any, uh, how did that come about?
John McHugh:
We’ve been doing, uh, what’s called LTOs limited time offerings, uh, in, in our milk area. It started, uh, several years ago with mint milk. Uh, and it just went like crazy. So it’s our, uh, food r and d team just kind of testing, Hey, what would be a neat, unique flavor? Uh, we’ve had root beer, milk, uh, several different flavors. So again, just came out today. We’ll see how it goes. If it goes well, uh, you know, we may do it again next year. So it’s just kind of a fun way to promote milk consumption. You know, unfortunately here in Wisconsin, milk consumption as is in the nation, it’s actually going down. And part of that’s, cuz many of us in the morning used to have breakfast cereal, uh, and now we’re always eating on the go. We stop at a quick trip and get a breakfast croissant instead. Uh, so milk consumption’s going down yet, you know, the, uh, dairy industry is so critical to Wisconsin. We try to do anything we can do to, to promote milk consumption and this is kind of a fun way in which we do those areas.
Richie Burke:
John, what’s your go-to pickup at Kwik Trips?
John McHugh:
Uh, my favorite thing to have is a ham and cheese croissant in the morning with the egg. I, I absolutely. And then, uh, two hash brown sticks. That’s my goal now. I, I try not to do that every day. <laugh>. Um, yeah, that’s, that, that’s my favorite.
Richie Burke:
How many stores do you currently have in? What are the plans on expansion?
John McHugh:
We now have over 820 stores, uh, in Minnesota, Wisconsin, Iowa. Those are our three primary states. Last year for the first time we went into northern Illinois and, uh, just a few weeks ago for the very first time, we’re now in the, up the upper peninsula of Michigan. Uh, two stores up there. Um, we’ll probably add another five stores up there next year. And then next year for the first time we’re gonna go into South Dakota, um, and eventually into North Dakota. So we do about 50 stores a year. Um, some like 35 new stores and then’s usually an acquisition or two, and then some rebuilds of our older stores to make them more up to date. So it’s anywhere between, uh, 35 to 50 a year.
Richie Burke:
It’s exciting. You guys have a nice ribbon cutting in the up.
John McHugh:
Uh, we did. Uh, people love us up there and you know, frankly we thought that maybe we’d be a little bit of an unknown commodity, but it’s amazing how many people in Ironwood, Michigan would travel down to Eagle River, Wisconsin. Yeah. Or over to Ashland. And, uh, I, I give a talk up there a couple months ago to drum up interest and already half the people in the audience already had their, their Kwik card for their, their rebates.
Richie Burke:
That’s awesome. Um, last question. Your website says The best is yet to come. Any, any teasers
John McHugh:
And that’s actually a signature line of our c e o and owner. He always says that the best is yet to come. Uh, there’s two things. He, he ends every single talk with to all of our coworkers. He’ll say the best is yet to come, uh, cuz we continue to build for the future. His philosophy is, if you don’t grow, you die as a company. And then his last line is always this. And all I can say is thank you. He never ends a talk without those two lines. That’s a signature phrase.
Richie Burke:
Love it. Well, thanks so much for coming on today.
John McHugh:
You bet. We’ll see you next time.