Seven years ago Peter Phillips was known as “the construction guy.” He’d built a thriving, successful career in real estate and construction, but a friendly cookie competition between him and his friend Theodore Gailas changed everything.

Spoiler alert: they both won. Their cookies turned out to be so good that they opened Chip City (formerly called Chip, NYC) as a side hustle in a 250-square-foot storefront in New York City.

Today, the business has over 45 storefront locations across nine states serving up hundreds of thousands of cookies a week. In addition, Chip City has raised $17.5 million from Enlightened Hospitality.

Challenge: Taking care of customers in a rapidly changing landscape

Phillips notes that there are a host of challenges plaguing business owners right now. Beyond operational challenges like supply chain issues, competition also is a distinct challenge. With social media and virality being key to a lot of marketing plans, he admits that Chip City sometimes struggles to find balance.

The influx of social media apps increases the likelihood of customers being “on to the next clip” and constantly exposed to competitors. Chip City dabbled in paid marketing but Phillips admitted that the business saw little return on investment.

So Phillips was faced with the ultimate question: “How do we continue to take care of the consumer and still maintain a healthy business in the ever-changing landscape that we’ve been dealing with right now?”

Solution: Building a focused, in-person customer experience

Chip City decided to make hospitality their differentiator. “We’re focused on our operations and the experience that the customers have when they come in the store, because the reality of it is we’re not the first and we’re definitely not going to be the last company to sell cookies and milk to people,” he said.

Chip City leverages in-store kiosks to create an experience where the customer can interact with the menu at their leisure and staff can guide them through any questions. He notes that this set-up has paved the way for better sales and stronger customer interaction because it creates a quicker and seamless checkout experience with Square Register.

“Having a solution that is simple and easy for not only the consumer to use but also for staff is very important because no matter how good of a company you run, you’re not going to keep people forever. And as staff turns over, you want to try to limit the amount of time it takes them to understand the technologies they have to work with because that is going to impact customer experience,” said Phillips.

An experience that enables the customer to focus solely on the menu and staff to focus solely on the customer and the checkout experience has been a key part of relationship building for the business. “Hospitality is a word that I use multiple times every day,” he said. “Little things like reading the customer when they walk in the door and asking people how their day’s going and taking the time to walk them through the flavors on the menu, all those little things totally changed the experience for the consumer.”

Zeroing in on the experience has had an impact on customer loyalty.

“Through Square Loyalty, we have a point system where every cookie that you buy will earn you certain points that you can redeem for rewards, and we’ve had tremendous success with that. [In fact], our customers are repeat customers for the most part.”

Impact: Customer loyalty deep enough to build a universe

Chip City has been able to build a universe around its brand. With partnerships with nostalgic brands like Scooby Doo and Rugrats, Chip City also has launched its own mascot named Mr. Chip (sometimes referred to as “Chippy”) and sells merchandise. It’s not just another way for the business to generate revenue, but another way for the business to connect with customers.

With deep brand affinity and massive growth, Phillips notes that the opportunities for Chip City are limitless — but he doesn’t want to lose focus on the one thing that’s made Chip City’s growth possible: the experience.

Phillips said: “The way I look at it is you can always recapture some margin, but you can’t recapture a customer’s experience. So that’s always been the priority for us, is making sure that the customer is getting the experience that we want them to have and the business side of that will follow.”