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!
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(upbeat music)
- Today's program slam is My McDonald's Rewards
by McDonald's.
- So let's get into it.
The My McDonald's Rewards program is pretty new.
It's totally app-based,
loyalty program launched in 2019,
and it became available in all states in 2021.
So it encompasses all menu items except for
like the My Cafe Rewards program is totally separate program.
So obviously McDonald's is a quick serve restaurant.
McDonald's has had 150 million active users of this app
in a 98 cohort driving $20 billion worth of sales for them.
We're gonna get into it,
but like that's a really impressive number.
And this was as of February, 2024.
So obviously the competitors include Burger King,
Wendy's, Taco Bell, and Starbucks.
If you're thinking about the coffee beverages,
you're thinking about that morning commute,
Starbucks is definitely an option for people,
especially with their drive-through.
So Scott, what you got for us?
- I do use the app and I've used it for quite a while.
It's, there's a McDonald's right outside
where my daughter used to dance, very convenient.
The app, the program itself is very helpful
for things that I might be getting anyway,
or allows me to kind of customize more.
I don't have to get like the full meal for myself
where I can get it for her and all of that.
What I don't like about the app experience
is that it's like three clicks just to be able
to get that four digit code in order to start earning
or burning, it's too much.
Like I want to just bring up the app and it knows who I am.
What I do like about the program is yes,
there's decent signage, but I also like that
when I give them my code, my four digit code,
they're always asking me for it.
And when they do it, the first thing that they say
is my name, back to me.
So it's a recognition of who I am.
And then what I have put in there is right on the screen,
automatically.
So I love that integration.
I love that experience of once I have gone through
the rigmarole of putting what I want into it,
it appears right there on the screen and it's correct.
What I don't like about it is lack of some of the options
for redemption.
You can't really get a eel for that
unless you're getting a happy meal.
You can get burgers, you can get fries,
you can get all of these individual items,
but I think that's how they get you.
It's like you're not getting the meal,
you're getting these individual items,
so you still have to add on stack on.
They're also really driving the order ahead experience.
And when I'm driving through,
it's usually a last minute decision.
And so I'm fumbling to try and add and do things.
Maybe there's a car ahead of me, maybe there's not.
So there've been more than one occasion
where I'm simply just earning points
because I didn't have the time between the drive up
and the order experience to look, redeem, et cetera,
is a part of that experience.
- That is really interesting.
Kudos for that because, I mean,
you just have to think about it.
If you're by yourself,
that you're trying to jump on your phone
before you get in the drive-through,
it really kind of defeats that purpose of a,
don't wanna get out of the car,
be dangerous, dangerous cell phone in hand situation
where with the ordering ahead,
you're gonna pull over in the parking lot and order ahead.
No, you're gonna miss your offer.
You're just gonna gather your points
and you're gonna go on about your way.
If you've got somebody else in the car, perhaps.
One thing I do like about that whole ordering in the app
is it's easily customizable.
Like so you can really, you know,
stay exactly what you want and not be misheard
or anything like that.
But trying to fumble with the app and on your phone,
in the car, in the drive-through,
that's a, that's no bueno to me.
So you're right, you're missing opportunity
if you're going to the drive-through.
Now I have gone into McDonald's.
I don't know how many of us have gone into McDonald's,
you know, recently where they've got the kiosks and stuff.
So they're sort of optimizing the line.
There's still people that you can talk to,
although I hear there's some that are eliminating it.
I do still also appreciate that human touch, right?
You put your order in the kiosk,
you come up to the thing,
and says, "Hi, Scott."
You know, like that's, that matters.
You just called that out.
So very interesting point.
At least, talk to me about McDonald's.
- Sure.
So I don't have the app,
so I'm just analyzing this based on my research.
But things that I really liked about the program is that,
you know, it's customized, McDonald's is a huge global company
and it's customized based on region and country.
And their whole saying is think global, act local.
I just think that's cool that no matter
where you are in the world,
it's gonna be kind of customized to what's available,
where you are.
I also like that you can link your credit card
right in the app.
I think that's super convenient,
especially if you're, you know, pick up or it's a delivery.
It's all just in one place
and you can just order what you want
and everything's linked up.
Some things I didn't like is only one reward
can be redeemed at a time.
I know I was looking into Burger King's program
and you could redeem multiple offers at once.
So that's maybe something that they can look into improving.
And then it seemed like there was just a small range of items
for each reward tier, like,
seem like there are only like four or five things
you could choose from.
So I think maybe they can look into expanding
those offerings in the future.
Something that really intrigued me was that digital sales
represent almost 40% of system-wide sales
from, that was from 2023.
And they had a growth of over 30% over 2022.
And that was a quote from the CEO that I found.
And I thought that was really intriguing,
how many people are actually ordering fast food digitally.
Just to touch on comparisons from a look and feel perspective
because I'm a designer, you know,
Burger King went through a whole brand refresh,
I think in 2021.
And I just think that the experience with them is just,
you know, it's a little more bold and fun
to interact with, it's vibrant.
There's like a lot of experiences that you can do.
And McDonald's, I think, is lacking that a little bit.
But overall, I think it's been really successful
in increasing sales and it's encouraged customers
to use the app to purchase,
especially for pickup and delivery.
So I think it's been a really successful program.
- I have seen some of their campaign with the anime style
and anime characters mentioning the fact
that they are a global company
and everybody sort of talks about how the McDonald's offerings
in Asia are so different from the McDonald's offerings
in North America and even in Europe.
And so it kind of creates this like niche food situation
and a little bit of a cult following around that.
The anime campaign, I would be very interested
to know how that is going for them.
I feel like most people, if you're gonna choose McDonald's,
you're gonna choose McDonald's, I'm not necessarily
gonna choose it for the anime character.
But also, I might not be the target audience.
So I'd be really interested to see how that's going for them.
Alex?
- Yeah, just to close it out.
So I think I really like that it's an app first focus.
Like you can tell that that's what they're designing for,
which makes sense because they're trying to also make
the drive through line and get leveraged.
And then they're trying to reduce the amount of time
that you're in the drive through by having the codes
and then making it seamless with the card linking.
So I think all of that is very smart
from a business perspective to move those people through
as well as order ahead.
And you can see that it is very valuable
'cause like Elise pointed out, you have 1500 points
if you just link your credit card.
So it makes the execution of the purchase a lot easier,
but it also gives you that added bonus as well,
which you can then use for a redemption.
I think the high point earning is really interesting.
They give you a lot of points for your purchases,
which is kind of nice.
I think part of the design elements or the psychology there
is given the socioeconomic demographic that they have,
that kind of demographic likes to see big point balances.
And so I think that's smart.
They clearly did research here.
They clearly know who their customer is
and built around that.
I also like that they do the weekly promotions.
I think they probably could do a little bit more with that,
but also you have to activate the offer,
which like we said in a recent slam that we did
on PetSmart, we don't like that part.
So I wish those were just automatically added.
And then I do, I also agree, I don't like the redeem
for only one reward on the order,
whereas Burger King allows you to do it on multiple.
But I will say from a give back perspective,
they are the most generous.
So at $15 of spend, you can achieve your first reward.
If you look at Wendy's, you have to spend at least $20
to get the first reward.
And then Burger King, you have to spend 25
to get their first reward.
So it is interesting that McDonald's does that.
I think they could do a better job of marketing that,
that it's faster to get something
within their program than anybody else's.
That being said also for Burger King,
I really like what they did with the creative.
It's really clever, it feels really inviting
and exciting and modern.
So they're called Royal Perks and you earn crowns
instead of points.
So I think they did a really nice job there,
whereas McDonald's is pretty basic in terms of,
you get points, you redeem your points for this.
It's not as fun or engaging as I think Royal Perks is.
And then Wendy's, what I like about that,
they offer receipt scanning at the end.
So if you missed it and you didn't get,
you forgot to check in or you didn't do it correctly,
you can always go back and scan your receipt
and then you'll get all the points.
And I didn't find that in any of the other apps,
whereas Wendy's really calls that out
and makes it really easy with the QR code for signing.
But even if you mess that up,
you can still always scan your receipt,
which I thought was clever.
And then they're also limited to one reward per order.
So I don't know, I think they're all,
they're pretty similar when I look at them together,
but I do think McDonald's is more generous.
So their value prop seems a little bit better
than the other two.
If they called their points, chicken nuggies,
would you like a butter?
(laughing)
No, maybe, I don't know, what would they be?
Arches?
Woppers.
Happy points?
Woppers?
It's big max.
No, it's big max.
Oh, you're right.
Oh my gosh.
Nick points, big max.
Max, okay.
- Thermal thoughts. - All right.
Does anybody have any burning desires?
Now that we've heard everything from everybody today,
that you wanna totally talk about something you missed?
Love it.
All right, well, let's get to school.
- I want to share, I think over archingly though,
within QSR specific to this,
to these types of programs,
they're not that exciting in general.
And I think a lot of them have been trying to solve for
how the hell are we gonna get these people
to check in during the drive-through process?
How, like, so they've been building kiosks
and scanning codes and, you know,
so I think a lot of tech lift had to happen
to make a lot of this work.
But now it's a time for innovation
because all three of those programs are a little bit blah.
And if you wanna look at, like,
I think they need to really start looking at Starbucks,
potentially as like, what are they doing
that's a little bit more differentiated in the space?
'Cause I think they've started to,
although it takes forever to get through a Starbucks,
so I don't know if that.
But their program, I think,
has a little bit more fun and gamification,
whereas this one I'm not seeing as much
in any of the programs.
- I agree with that.
And I didn't miss that you said overarching
about the McDonald's program.
- Ah.
(laughing)
- Good.
- Okay.
- Love it.
Okay, Scott, and what score are you gonna give
the program design?
- Give it a three.
I give it a three because,
given the context of, you know,
who they are and what they're trying to sell,
it is pretty good of a program design, in my opinion.
It allows me to, like Alex said, earn a lot of points.
It is a part of the culture.
It is things that a lot of people are buying anyway,
and a lot of the deals are from what things
that people are buying anyway.
So they understand their market,
they understand what people are going for,
and they've incorporated that into the design.
Sorry.
I think it meets my expectations.
What I would like for it to be more of a four or five
is a little bit more engaging,
a little bit easier to use in the app.
- I understand.
At least, how do you feel about the program design?
- I gave it a four.
I think it's well designed, it's easy to use,
it works how it's supposed to work.
I think that's fair enough.
- Absolutely, absolutely.
Alex?
- I give it a three.
I think it has a lot of great foundation,
but there's a lot of interesting opportunities
to improve it and surpass expectation.
I think, you know, I think there's just different ways
that they could be engaging.
And I really like Scott, what you said about nostalgia.
Like McDonald's is nostalgic.
It's a brand that's been around for a long time.
And they're missing that in the app.
It's not as fun and exciting as what I remember as a kid.
You know, and the fun and excitement that a kid gets
when they open their happy meals,
like it should feel that way for the parent too almost.
Or, you know, anyone that's going into the app
and kind of playing around with it.
I think they really miss that.
And it's interesting that you said it
'cause that was exactly what it is.
There's not this fun aspect to it at all.
It's very transactional, but it works.
And so it's fine.
- How come you got your score for value proposition, Scott?
- I give it a four.
And because it meets my needs, right?
It's where I need it to be.
It's on the way to the places that I need to go.
I mean, it is McDonald's.
And I get the stuff that I want.
Now, at least we're saying that it's not all foods
are part of that.
I don't know that I could get a shamrock shake
during that time.
I could, they had a deal on it
so that I could earn more points on it.
But I don't think I could have gotten a free one for it.
But I need a big Mac.
I can get a free big Mac.
I need a Happy Meal.
I can get a Happy Meal.
- I'd love to hear it, Elise.
- I think you even have five.
For all the reasons that Scott was just saying pretty much,
like it's, you get a really good value.
You get a lot of points at the get go.
You're able to, it's just the values there.
- Love it.
Alex?
- I give it a four.
I think the value's there as well.
And they have the best give back of the other competitors.
I do think there's a great opportunity
for those competitors to reassess what they're doing
and be more thoughtful in terms of how quickly
they can get to redemptions and rewards.
And then, they need to start, I'm gonna go for it.
They're gonna, they need to start hand-burgling
from McDonald's, right?
And so I think they can use their program
and fix that.
- Points are down points, team.
I think points are down points to that one.
- He went for it, he got to do it.
- Points.
(laughs)
- There we go.
Love it.
All right.
Okay, let's talk engagement.
And this is where that nostalgia really, really pulls
through as well.
You think about everybody's talking about losing third
spaces and kids birthday parties are now,
Instagram, it's Travis Gans,
and as you don't just go get the McDonald's cake
and ice cream and chill with those brown tiles
in the sunroom with the play, with the play set.
So, what do you think about McDonald's,
my McDonald's engagement, engagement elements,
retention elements, like how are they using this program
to get these 150 million active users
in this 90-day cohort?
Well, Scott, how do you feel about the engagement?
- Again, separating the store from the program,
the program I gave it to.
It is useful, it is easy to understand
in terms of how to do it.
It is difficult to operate.
Again, multiple clicks to get to my code.
But when they do have my code,
they are sending my name back to me.
The things I put in there are appearing on the screen.
The program is a two for me for the engagement.
- First two of the day, Elise.
- I gave it a three,
just 'cause I feel like it is very transactional,
but it's not very experience-based,
and there's not a lot to really engage with
beyond what you're ordering and redeeming and earning.
It's more just transactional.
- Alex?
- I gave it a two.
I think it's very transactional
and needs a lot more interaction and excitement to it.
Yeah, and I mean, yeah, talking about nostalgia,
or even the little play place too,
that'd be funny if you could check in, right?
Or it almost becomes the kid's little lounge, right?
Exclusive lounge access.
I don't know, have some fun with it.
I think it's McDonald's.
Like they came up with a Happy Meal,
all the characters,
that app needs to be a lot more fun and engaging.
- Yeah, that's a really great point.
There could be a lot of gamification
using those characters that they already have,
and just really prompting,
spin the wheel and see who you get,
and all of those great things.
I think that that's a really excellent point there.
All right, final topic, final scoring, performance.
Performance of this program,
whether it is in your life, in the industry,
in the market, what do you think, Scott?
- Also, I gave it a three.
Performance-wise, I did like a lot of the things
that I mentioned where it is.
It is functioning, it has some of the engagement.
My stuff appears on the screen.
I don't know that it's,
because the app is difficult to use,
I don't know what that, you know, apprehension rate is.
Again, I keep it because it is moving needles from me,
but because of the burden in that,
I feel like there's a lot of drop-off there.
And so meeting expectations across the board, in my opinion.
- I think something else I have to consider
with that 150 million users in 90 days
is the mass share amount of locations that McDonald's has.
How many compared to their overall sales
or individual transactions are loyalty transactions?
Now I personally didn't find that number,
maybe somebody else did.
It's not like they have 1500 locations
and they're getting 150 million loyalty users, right?
They have thousands and thousands and thousands.
So that's always something to think about,
when think about performance of this program.
- To that point,
how many people are just racking up points?
Because like Alex said, you can get a lot of points for it.
So how many people are just racking it up just for some day
because it's difficult to redeem, in my opinion,
people are just sitting on massive balances.
- Yeah, I mean, you can only redeem one thing at a time.
So even if you have a huge amount of points,
like, how many times are you?
- It's gonna take people a million years to actually
- Yeah, just keep going through the drive through.
- Yeah, and then eventually you'll have a full meal.
- And that leaves liability on the table, right?
It's like the person wanted to burn them off
and take advantage of their value,
but now it's just sitting on your financial books
because the person can't redeem it quick enough.
And if they don't have transfer options,
like that could be, I can't imagine you can earn that many
points in McDonald's that would be worth transferring it
into a hotel program or an airline program.
But like, maybe there's some partnership opportunities
that they really haven't looked at.
It just really depends on how high those point balances
really are.
And if people are just banking them,
we need to figure out ways to help with burn
and engagement, 'cause that's showing no engagement.
They're not burning their points.
So at least given that information,
how are you gonna rate the performance?
- I mean, I gave it a four,
but I was pretty much basing it on statistics that I found
just that almost 40% of their sales last year
were based on digital sales.
And then, and they've just, the company as a whole,
the sales have grown 30% from one year to the next.
So that just indicates a pretty strong performance to me.
- Yeah, I would believe that that whole 40%
of digital sales is because they did do a really good job
of rolling it out and training associates
to constantly ask if you're part of the program.
So almost every touch point with an associate there,
they're gonna ask you if you're part of the program.
And then that gets you intriguing,
that gets you checking in,
that gets you earning your points.
I do think that given that there's no digital product,
there's no e-commerce in that sense,
that training that frontline to constantly remind people
of all those programs is probably why they've experienced
a lot of growth in that program so early as well.
So Alex, what are you ready to performance?
- I gotta go with three and a half.
I think it's a little above me to expectation
because of the published facts that McDonald's has shared
about the success of the program.
So again, as a program manager, I'd be very happy
the team would be doing well,
but there's a lot of room for opportunity on this one
to get it up there.
And I think to get better engagement
and better participation overall.
So there you go, three and a half.
- Well, five. - Three burgers
and a fry.
- And a fry, and a fry.
(laughs)
And a sheet on Rock Shake.
Which by the way, I wasn't able to get one
because they were out of it when I went
and I was McDonald's here in my plea.
(laughs)
All right, so the reflection that the engagement
can be better definitely is shown throughout the score.
Overall, my McDonald's reward program has scored a 3.4.
So just a little over me,
sex expectations, definitely room for improvement,
everything has room for improvement.
So thanks for slamming y'all.
- Thank you.
(upbeat music)
(upbeat music)