Annex Cloud 21 min

My McDonalds Rewards


Unveiling the secrets of the Golden Arches' rewards game! The Loyalty Program Slam takes a deep dive into McDonald's loyalty program—are those fries worth the McPoints? Tune in to find out if it's a delicious deal or a burger disappointment!



0:00

(upbeat music)

0:02

- Today's program slam is My McDonald's Rewards

0:08

by McDonald's.

0:09

- So let's get into it.

0:10

The My McDonald's Rewards program is pretty new.

0:14

It's totally app-based,

0:15

loyalty program launched in 2019,

0:18

and it became available in all states in 2021.

0:21

So it encompasses all menu items except for

0:25

like the My Cafe Rewards program is totally separate program.

0:28

So obviously McDonald's is a quick serve restaurant.

0:31

McDonald's has had 150 million active users of this app

0:36

in a 98 cohort driving $20 billion worth of sales for them.

0:42

We're gonna get into it,

0:43

but like that's a really impressive number.

0:45

And this was as of February, 2024.

0:48

So obviously the competitors include Burger King,

0:51

Wendy's, Taco Bell, and Starbucks.

0:54

If you're thinking about the coffee beverages,

0:55

you're thinking about that morning commute,

0:57

Starbucks is definitely an option for people,

0:59

especially with their drive-through.

1:00

So Scott, what you got for us?

1:04

- I do use the app and I've used it for quite a while.

1:07

It's, there's a McDonald's right outside

1:10

where my daughter used to dance, very convenient.

1:12

The app, the program itself is very helpful

1:15

for things that I might be getting anyway,

1:17

or allows me to kind of customize more.

1:20

I don't have to get like the full meal for myself

1:23

where I can get it for her and all of that.

1:25

What I don't like about the app experience

1:27

is that it's like three clicks just to be able

1:29

to get that four digit code in order to start earning

1:34

or burning, it's too much.

1:35

Like I want to just bring up the app and it knows who I am.

1:38

What I do like about the program is yes,

1:40

there's decent signage, but I also like that

1:42

when I give them my code, my four digit code,

1:45

they're always asking me for it.

1:47

And when they do it, the first thing that they say

1:49

is my name, back to me.

1:51

So it's a recognition of who I am.

1:53

And then what I have put in there is right on the screen,

1:57

automatically.

1:58

So I love that integration.

1:59

I love that experience of once I have gone through

2:03

the rigmarole of putting what I want into it,

2:08

it appears right there on the screen and it's correct.

2:12

What I don't like about it is lack of some of the options

2:16

for redemption.

2:17

You can't really get a eel for that

2:19

unless you're getting a happy meal.

2:20

You can get burgers, you can get fries,

2:22

you can get all of these individual items,

2:25

but I think that's how they get you.

2:27

It's like you're not getting the meal,

2:29

you're getting these individual items,

2:31

so you still have to add on stack on.

2:33

They're also really driving the order ahead experience.

2:38

And when I'm driving through,

2:40

it's usually a last minute decision.

2:43

And so I'm fumbling to try and add and do things.

2:47

Maybe there's a car ahead of me, maybe there's not.

2:49

So there've been more than one occasion

2:51

where I'm simply just earning points

2:53

because I didn't have the time between the drive up

2:56

and the order experience to look, redeem, et cetera,

3:00

is a part of that experience.

3:01

- That is really interesting.

3:03

Kudos for that because, I mean,

3:04

you just have to think about it.

3:06

If you're by yourself,

3:07

that you're trying to jump on your phone

3:10

before you get in the drive-through,

3:11

it really kind of defeats that purpose of a,

3:15

don't wanna get out of the car,

3:17

be dangerous, dangerous cell phone in hand situation

3:21

where with the ordering ahead,

3:23

you're gonna pull over in the parking lot and order ahead.

3:25

No, you're gonna miss your offer.

3:27

You're just gonna gather your points

3:28

and you're gonna go on about your way.

3:30

If you've got somebody else in the car, perhaps.

3:32

One thing I do like about that whole ordering in the app

3:35

is it's easily customizable.

3:37

Like so you can really, you know,

3:39

stay exactly what you want and not be misheard

3:42

or anything like that.

3:42

But trying to fumble with the app and on your phone,

3:45

in the car, in the drive-through,

3:48

that's a, that's no bueno to me.

3:50

So you're right, you're missing opportunity

3:52

if you're going to the drive-through.

3:53

Now I have gone into McDonald's.

3:55

I don't know how many of us have gone into McDonald's,

3:57

you know, recently where they've got the kiosks and stuff.

4:02

So they're sort of optimizing the line.

4:05

There's still people that you can talk to,

4:07

although I hear there's some that are eliminating it.

4:11

I do still also appreciate that human touch, right?

4:13

You put your order in the kiosk,

4:14

you come up to the thing,

4:15

and says, "Hi, Scott."

4:16

You know, like that's, that matters.

4:18

You just called that out.

4:19

So very interesting point.

4:22

At least, talk to me about McDonald's.

4:24

- Sure.

4:25

So I don't have the app,

4:27

so I'm just analyzing this based on my research.

4:31

But things that I really liked about the program is that,

4:34

you know, it's customized, McDonald's is a huge global company

4:37

and it's customized based on region and country.

4:40

And their whole saying is think global, act local.

4:43

I just think that's cool that no matter

4:45

where you are in the world,

4:46

it's gonna be kind of customized to what's available,

4:49

where you are.

4:50

I also like that you can link your credit card

4:52

right in the app.

4:53

I think that's super convenient,

4:54

especially if you're, you know, pick up or it's a delivery.

4:57

It's all just in one place

4:59

and you can just order what you want

5:01

and everything's linked up.

5:03

Some things I didn't like is only one reward

5:05

can be redeemed at a time.

5:06

I know I was looking into Burger King's program

5:10

and you could redeem multiple offers at once.

5:13

So that's maybe something that they can look into improving.

5:16

And then it seemed like there was just a small range of items

5:19

for each reward tier, like,

5:21

seem like there are only like four or five things

5:23

you could choose from.

5:24

So I think maybe they can look into expanding

5:28

those offerings in the future.

5:30

Something that really intrigued me was that digital sales

5:34

represent almost 40% of system-wide sales

5:37

from, that was from 2023.

5:40

And they had a growth of over 30% over 2022.

5:43

And that was a quote from the CEO that I found.

5:47

And I thought that was really intriguing,

5:48

how many people are actually ordering fast food digitally.

5:53

Just to touch on comparisons from a look and feel perspective

5:56

because I'm a designer, you know,

5:59

Burger King went through a whole brand refresh,

6:01

I think in 2021.

6:03

And I just think that the experience with them is just,

6:07

you know, it's a little more bold and fun

6:09

to interact with, it's vibrant.

6:11

There's like a lot of experiences that you can do.

6:15

And McDonald's, I think, is lacking that a little bit.

6:17

But overall, I think it's been really successful

6:21

in increasing sales and it's encouraged customers

6:23

to use the app to purchase,

6:25

especially for pickup and delivery.

6:26

So I think it's been a really successful program.

6:29

- I have seen some of their campaign with the anime style

6:34

and anime characters mentioning the fact

6:37

that they are a global company

6:38

and everybody sort of talks about how the McDonald's offerings

6:41

in Asia are so different from the McDonald's offerings

6:44

in North America and even in Europe.

6:46

And so it kind of creates this like niche food situation

6:50

and a little bit of a cult following around that.

6:52

The anime campaign, I would be very interested

6:55

to know how that is going for them.

6:58

I feel like most people, if you're gonna choose McDonald's,

7:00

you're gonna choose McDonald's, I'm not necessarily

7:02

gonna choose it for the anime character.

7:03

But also, I might not be the target audience.

7:06

So I'd be really interested to see how that's going for them.

7:08

Alex?

7:09

- Yeah, just to close it out.

7:10

So I think I really like that it's an app first focus.

7:14

Like you can tell that that's what they're designing for,

7:17

which makes sense because they're trying to also make

7:19

the drive through line and get leveraged.

7:21

And then they're trying to reduce the amount of time

7:24

that you're in the drive through by having the codes

7:26

and then making it seamless with the card linking.

7:28

So I think all of that is very smart

7:30

from a business perspective to move those people through

7:32

as well as order ahead.

7:34

And you can see that it is very valuable

7:36

'cause like Elise pointed out, you have 1500 points

7:38

if you just link your credit card.

7:40

So it makes the execution of the purchase a lot easier,

7:43

but it also gives you that added bonus as well,

7:46

which you can then use for a redemption.

7:48

I think the high point earning is really interesting.

7:50

They give you a lot of points for your purchases,

7:53

which is kind of nice.

7:55

I think part of the design elements or the psychology there

7:58

is given the socioeconomic demographic that they have,

8:01

that kind of demographic likes to see big point balances.

8:06

And so I think that's smart.

8:07

They clearly did research here.

8:08

They clearly know who their customer is

8:10

and built around that.

8:11

I also like that they do the weekly promotions.

8:14

I think they probably could do a little bit more with that,

8:16

but also you have to activate the offer,

8:18

which like we said in a recent slam that we did

8:21

on PetSmart, we don't like that part.

8:23

So I wish those were just automatically added.

8:26

And then I do, I also agree, I don't like the redeem

8:29

for only one reward on the order,

8:31

whereas Burger King allows you to do it on multiple.

8:33

But I will say from a give back perspective,

8:34

they are the most generous.

8:35

So at $15 of spend, you can achieve your first reward.

8:39

If you look at Wendy's, you have to spend at least $20

8:42

to get the first reward.

8:43

And then Burger King, you have to spend 25

8:45

to get their first reward.

8:46

So it is interesting that McDonald's does that.

8:48

I think they could do a better job of marketing that,

8:50

that it's faster to get something

8:52

within their program than anybody else's.

8:55

That being said also for Burger King,

8:56

I really like what they did with the creative.

8:58

It's really clever, it feels really inviting

9:02

and exciting and modern.

9:03

So they're called Royal Perks and you earn crowns

9:06

instead of points.

9:07

So I think they did a really nice job there,

9:09

whereas McDonald's is pretty basic in terms of,

9:12

you get points, you redeem your points for this.

9:15

It's not as fun or engaging as I think Royal Perks is.

9:18

And then Wendy's, what I like about that,

9:20

they offer receipt scanning at the end.

9:22

So if you missed it and you didn't get,

9:24

you forgot to check in or you didn't do it correctly,

9:27

you can always go back and scan your receipt

9:29

and then you'll get all the points.

9:30

And I didn't find that in any of the other apps,

9:32

whereas Wendy's really calls that out

9:34

and makes it really easy with the QR code for signing.

9:36

But even if you mess that up,

9:37

you can still always scan your receipt,

9:39

which I thought was clever.

9:40

And then they're also limited to one reward per order.

9:43

So I don't know, I think they're all,

9:46

they're pretty similar when I look at them together,

9:48

but I do think McDonald's is more generous.

9:51

So their value prop seems a little bit better

9:53

than the other two.

9:55

If they called their points, chicken nuggies,

9:57

would you like a butter?

9:58

(laughing)

10:01

No, maybe, I don't know, what would they be?

10:03

Arches?

10:05

Woppers.

10:06

Happy points?

10:08

Woppers?

10:09

It's big max.

10:10

No, it's big max.

10:11

Oh, you're right.

10:12

Oh my gosh.

10:14

Nick points, big max.

10:16

Max, okay.

10:18

- Thermal thoughts. - All right.

10:20

Does anybody have any burning desires?

10:22

Now that we've heard everything from everybody today,

10:24

that you wanna totally talk about something you missed?

10:27

Love it.

10:28

All right, well, let's get to school.

10:28

- I want to share, I think over archingly though,

10:31

within QSR specific to this,

10:34

to these types of programs,

10:37

they're not that exciting in general.

10:41

And I think a lot of them have been trying to solve for

10:43

how the hell are we gonna get these people

10:45

to check in during the drive-through process?

10:47

How, like, so they've been building kiosks

10:49

and scanning codes and, you know,

10:51

so I think a lot of tech lift had to happen

10:53

to make a lot of this work.

10:55

But now it's a time for innovation

10:56

because all three of those programs are a little bit blah.

11:00

And if you wanna look at, like,

11:02

I think they need to really start looking at Starbucks,

11:04

potentially as like, what are they doing

11:06

that's a little bit more differentiated in the space?

11:08

'Cause I think they've started to,

11:10

although it takes forever to get through a Starbucks,

11:11

so I don't know if that.

11:13

But their program, I think,

11:14

has a little bit more fun and gamification,

11:16

whereas this one I'm not seeing as much

11:18

in any of the programs.

11:20

- I agree with that.

11:21

And I didn't miss that you said overarching

11:23

about the McDonald's program.

11:25

- Ah.

11:25

(laughing)

11:27

- Good.

11:28

- Okay.

11:29

- Love it.

11:30

Okay, Scott, and what score are you gonna give

11:32

the program design?

11:34

- Give it a three.

11:35

I give it a three because,

11:37

given the context of, you know,

11:40

who they are and what they're trying to sell,

11:42

it is pretty good of a program design, in my opinion.

11:45

It allows me to, like Alex said, earn a lot of points.

11:48

It is a part of the culture.

11:51

It is things that a lot of people are buying anyway,

11:55

and a lot of the deals are from what things

11:57

that people are buying anyway.

11:58

So they understand their market,

12:00

they understand what people are going for,

12:02

and they've incorporated that into the design.

12:06

Sorry.

12:06

I think it meets my expectations.

12:08

What I would like for it to be more of a four or five

12:11

is a little bit more engaging,

12:13

a little bit easier to use in the app.

12:15

- I understand.

12:17

At least, how do you feel about the program design?

12:19

- I gave it a four.

12:20

I think it's well designed, it's easy to use,

12:25

it works how it's supposed to work.

12:26

I think that's fair enough.

12:28

- Absolutely, absolutely.

12:30

Alex?

12:31

- I give it a three.

12:32

I think it has a lot of great foundation,

12:35

but there's a lot of interesting opportunities

12:37

to improve it and surpass expectation.

12:40

I think, you know, I think there's just different ways

12:44

that they could be engaging.

12:45

And I really like Scott, what you said about nostalgia.

12:48

Like McDonald's is nostalgic.

12:49

It's a brand that's been around for a long time.

12:53

And they're missing that in the app.

12:55

It's not as fun and exciting as what I remember as a kid.

12:59

You know, and the fun and excitement that a kid gets

13:01

when they open their happy meals,

13:02

like it should feel that way for the parent too almost.

13:05

Or, you know, anyone that's going into the app

13:07

and kind of playing around with it.

13:09

I think they really miss that.

13:10

And it's interesting that you said it

13:12

'cause that was exactly what it is.

13:14

There's not this fun aspect to it at all.

13:16

It's very transactional, but it works.

13:19

And so it's fine.

13:20

- How come you got your score for value proposition, Scott?

13:23

- I give it a four.

13:24

And because it meets my needs, right?

13:29

It's where I need it to be.

13:31

It's on the way to the places that I need to go.

13:34

I mean, it is McDonald's.

13:36

And I get the stuff that I want.

13:38

Now, at least we're saying that it's not all foods

13:41

are part of that.

13:42

I don't know that I could get a shamrock shake

13:45

during that time.

13:45

I could, they had a deal on it

13:47

so that I could earn more points on it.

13:49

But I don't think I could have gotten a free one for it.

13:51

But I need a big Mac.

13:53

I can get a free big Mac.

13:54

I need a Happy Meal.

13:55

I can get a Happy Meal.

13:56

- I'd love to hear it, Elise.

13:59

- I think you even have five.

14:00

For all the reasons that Scott was just saying pretty much,

14:03

like it's, you get a really good value.

14:05

You get a lot of points at the get go.

14:08

You're able to, it's just the values there.

14:12

- Love it.

14:13

Alex?

14:13

- I give it a four.

14:14

I think the value's there as well.

14:16

And they have the best give back of the other competitors.

14:19

I do think there's a great opportunity

14:21

for those competitors to reassess what they're doing

14:24

and be more thoughtful in terms of how quickly

14:26

they can get to redemptions and rewards.

14:28

And then, they need to start, I'm gonna go for it.

14:32

They're gonna, they need to start hand-burgling

14:35

from McDonald's, right?

14:36

And so I think they can use their program

14:39

and fix that.

14:40

- Points are down points, team.

14:42

I think points are down points to that one.

14:44

- He went for it, he got to do it.

14:46

- Points.

14:47

(laughs)

14:49

- There we go.

14:49

Love it.

14:52

All right.

14:53

Okay, let's talk engagement.

14:53

And this is where that nostalgia really, really pulls

14:55

through as well.

14:57

You think about everybody's talking about losing third

14:59

spaces and kids birthday parties are now,

15:03

Instagram, it's Travis Gans,

15:05

and as you don't just go get the McDonald's cake

15:08

and ice cream and chill with those brown tiles

15:11

in the sunroom with the play, with the play set.

15:13

So, what do you think about McDonald's,

15:16

my McDonald's engagement, engagement elements,

15:20

retention elements, like how are they using this program

15:22

to get these 150 million active users

15:25

in this 90-day cohort?

15:27

Well, Scott, how do you feel about the engagement?

15:30

- Again, separating the store from the program,

15:34

the program I gave it to.

15:36

It is useful, it is easy to understand

15:43

in terms of how to do it.

15:43

It is difficult to operate.

15:46

Again, multiple clicks to get to my code.

15:50

But when they do have my code,

15:52

they are sending my name back to me.

15:54

The things I put in there are appearing on the screen.

15:57

The program is a two for me for the engagement.

16:01

- First two of the day, Elise.

16:03

- I gave it a three,

16:05

just 'cause I feel like it is very transactional,

16:07

but it's not very experience-based,

16:09

and there's not a lot to really engage with

16:12

beyond what you're ordering and redeeming and earning.

16:17

It's more just transactional.

16:19

- Alex?

16:21

- I gave it a two.

16:23

I think it's very transactional

16:25

and needs a lot more interaction and excitement to it.

16:30

Yeah, and I mean, yeah, talking about nostalgia,

16:32

or even the little play place too,

16:34

that'd be funny if you could check in, right?

16:37

Or it almost becomes the kid's little lounge, right?

16:39

Exclusive lounge access.

16:41

I don't know, have some fun with it.

16:42

I think it's McDonald's.

16:44

Like they came up with a Happy Meal,

16:46

all the characters,

16:48

that app needs to be a lot more fun and engaging.

16:51

- Yeah, that's a really great point.

16:52

There could be a lot of gamification

16:54

using those characters that they already have,

16:56

and just really prompting,

16:59

spin the wheel and see who you get,

17:02

and all of those great things.

17:03

I think that that's a really excellent point there.

17:06

All right, final topic, final scoring, performance.

17:09

Performance of this program,

17:12

whether it is in your life, in the industry,

17:15

in the market, what do you think, Scott?

17:17

- Also, I gave it a three.

17:19

Performance-wise, I did like a lot of the things

17:22

that I mentioned where it is.

17:25

It is functioning, it has some of the engagement.

17:28

My stuff appears on the screen.

17:30

I don't know that it's,

17:33

because the app is difficult to use,

17:36

I don't know what that, you know, apprehension rate is.

17:40

Again, I keep it because it is moving needles from me,

17:43

but because of the burden in that,

17:46

I feel like there's a lot of drop-off there.

17:49

And so meeting expectations across the board, in my opinion.

17:53

- I think something else I have to consider

17:56

with that 150 million users in 90 days

17:59

is the mass share amount of locations that McDonald's has.

18:03

How many compared to their overall sales

18:07

or individual transactions are loyalty transactions?

18:09

Now I personally didn't find that number,

18:11

maybe somebody else did.

18:12

It's not like they have 1500 locations

18:15

and they're getting 150 million loyalty users, right?

18:17

They have thousands and thousands and thousands.

18:19

So that's always something to think about,

18:21

when think about performance of this program.

18:23

- To that point,

18:24

how many people are just racking up points?

18:27

Because like Alex said, you can get a lot of points for it.

18:29

So how many people are just racking it up just for some day

18:33

because it's difficult to redeem, in my opinion,

18:37

people are just sitting on massive balances.

18:40

- Yeah, I mean, you can only redeem one thing at a time.

18:42

So even if you have a huge amount of points,

18:44

like, how many times are you?

18:45

- It's gonna take people a million years to actually

18:47

- Yeah, just keep going through the drive through.

18:49

- Yeah, and then eventually you'll have a full meal.

18:53

- And that leaves liability on the table, right?

18:57

It's like the person wanted to burn them off

18:59

and take advantage of their value,

19:00

but now it's just sitting on your financial books

19:03

because the person can't redeem it quick enough.

19:05

And if they don't have transfer options,

19:07

like that could be, I can't imagine you can earn that many

19:10

points in McDonald's that would be worth transferring it

19:12

into a hotel program or an airline program.

19:15

But like, maybe there's some partnership opportunities

19:17

that they really haven't looked at.

19:19

It just really depends on how high those point balances

19:22

really are.

19:23

And if people are just banking them,

19:25

we need to figure out ways to help with burn

19:28

and engagement, 'cause that's showing no engagement.

19:29

They're not burning their points.

19:31

So at least given that information,

19:32

how are you gonna rate the performance?

19:34

- I mean, I gave it a four,

19:36

but I was pretty much basing it on statistics that I found

19:39

just that almost 40% of their sales last year

19:43

were based on digital sales.

19:46

And then, and they've just, the company as a whole,

19:49

the sales have grown 30% from one year to the next.

19:53

So that just indicates a pretty strong performance to me.

19:56

- Yeah, I would believe that that whole 40%

19:59

of digital sales is because they did do a really good job

20:03

of rolling it out and training associates

20:05

to constantly ask if you're part of the program.

20:08

So almost every touch point with an associate there,

20:10

they're gonna ask you if you're part of the program.

20:12

And then that gets you intriguing,

20:14

that gets you checking in,

20:15

that gets you earning your points.

20:17

I do think that given that there's no digital product,

20:20

there's no e-commerce in that sense,

20:23

that training that frontline to constantly remind people

20:26

of all those programs is probably why they've experienced

20:28

a lot of growth in that program so early as well.

20:30

So Alex, what are you ready to performance?

20:32

- I gotta go with three and a half.

20:38

I think it's a little above me to expectation

20:41

because of the published facts that McDonald's has shared

20:45

about the success of the program.

20:46

So again, as a program manager, I'd be very happy

20:48

the team would be doing well,

20:50

but there's a lot of room for opportunity on this one

20:53

to get it up there.

20:54

And I think to get better engagement

20:56

and better participation overall.

20:58

So there you go, three and a half.

21:00

- Well, five. - Three burgers

21:02

and a fry.

21:03

- And a fry, and a fry.

21:05

(laughs)

21:06

And a sheet on Rock Shake.

21:07

Which by the way, I wasn't able to get one

21:09

because they were out of it when I went

21:10

and I was McDonald's here in my plea.

21:13

(laughs)

21:15

All right, so the reflection that the engagement

21:17

can be better definitely is shown throughout the score.

21:20

Overall, my McDonald's reward program has scored a 3.4.

21:25

So just a little over me,

21:26

sex expectations, definitely room for improvement,

21:29

everything has room for improvement.

21:30

So thanks for slamming y'all.

21:33

- Thank you.

21:33

(upbeat music)

21:36

(upbeat music)

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This is a test comment.

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This is a longer test comment to see how this looks if the person decides to ramble a bit. So they're rambling and rambling and then they even lorem ipsum.


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