Red Robin Died by Spreadsheet. Don't Make the Same Mistake
3 days ago
- #business-strategy
- #customer-experience
- #AI-age
- Red Robin's stock collapsed 96% after firing bussers and support staff to cut labor costs, leading to poor customer experience and declining sales.
- Chili's invested in customer experience, simplified its menu, and launched a viral deal, resulting in 31% same-store sales growth and a $3.3B market cap.
- The contrast between Red Robin and Chili's highlights the importance of prioritizing customer experience over short-term cost-cutting measures.
- Red Robin's management instability, with five CEOs in 10 years, led to inconsistent strategies and failure to address core service issues.
- The article warns against optimizing for quarterly earnings instead of long-term customer satisfaction, especially in the AI age where ambition and innovation are key.
- Jevons Paradox is cited to illustrate that efficiency gains should lead to more ambitious goals, not just cost reductions.