4. Keep prices—and costs—low
Burgers for $4 or less are nearly unheard of today outside the major burger franchises. But Terry won’t budge on the value front, believing that the low prices ensure P. Terry’s is a dine-out option for all demographics, and especially families.
What’s the secret to keeping prices so low, especially considering today’s razor-thin profit margins?
“If the line weren’t to the street, we couldn't do any of this,” Terry says. “It's just sheer volume. I would rather have a $3.95 double cheeseburger and a line to the street than a $6 cheeseburger and pray that people walk in.”
But Terry also says the company is tight about expenses, being careful not to waste any money. The brand doesn’t do much marketing, relying instead on word of mouth and more grassroots efforts. The headquarters aren’t anything fancy, just a small, nondescript office in a commercial park; Terry says general and administrative costs are kept very low. And Terry himself doesn’t treat the company like a piggy bank. For a long time, he put nearly all money back into the business, only taking out basic living expenses. He still pays for all food he eats from P. Terry’s.
“I think we've saved a lot of money by not playing big shot trying to impress anyone,” he says.
5. Get it right for the customer
When P. Terry’s launched in 2005, Facebook and Yelp were just fledgling services, and Twitter had yet to launch. But just because mistakes weren’t magnified back then like they are today on social media didn’t mean that P. Terry’s slouched on ensuring every guest experience was a good one. When he worked in the restaurants, Terry says, success wasn’t so much about trying to beat the competitor across the street as it was about creating an excellent experience from one customer to another.
“It's that constant need to get it right, it's never enough,” he says. “We just live in that world, and we accept it.”
That continues today, especially so in the social media world. P. Terry’s guests can text feedback on their experience to a special number, and texts go to not only the store manager, but also the area director, the VP of operations, and Terry himself. Guests who report any issues might receive a gift card to come back again for a better experience.
“If I can get to you fast enough to send you a gift card, you're less likely to call me an idiot [on social media],” he says.
This guest-first approach has been key to P. Terry’s massive success, a sort of grassroots way of building the brand from the ground up. “It's every day building your foundation, raising it up by each customer and taking care of each customer,” Terry says.
6. Do it for the right reasons
Fifteen years after Terry established P. Terry’s as an Austin burger icon, he’s able to take more of a back seat with company decisions. He’s not working in the restaurants—well, not as much as he used to, anyway—and he has a new CEO guiding growth.
Indeed, P. Terry’s is a success story, albeit one that’s still being written. And while it’s easy to look at Terry today and think he’s got it made, one must remember all the sweat equity that went into building P. Terry’s into what it is today. That wouldn’t have been possible if Terry hadn’t intentionally established a core mission early on, a mission to provide timeless, valuable, high-quality dining experiences to Austin diners.
Terry’s advice to young entrepreneurs getting into the restaurant industry is to have their own purpose for business, one beyond simply making money or getting rich.
“The money follows if you're doing it all right, you're taking care of the customer, and you're doing things fairly,” he says. “Everything else will follow. But if you put that out in front, I swear you think differently.”