Global Brand, Local Relevance

Having previously written about the recent “Brewing Good” marketing campaign by McDonald’s, we wanted to discuss their longer-term strategic approach to drive customer loyalty in the USA market, which they describe as the “heartbeat” of their global business. While McDonald’s does in fact operate a loyalty programme across its entire menu in China, in other key markets including the USA, Canada and the UK, it focuses exclusively on coffee.

So, why McCafé Rewards? According to its most recent annual report, a key element of McDonald’s overall strategy is customer loyalty through coffee – “converting casual to committed customers ….. by elevating and leveraging the McCafé coffee brand”, which explains why its investment in rewards is focused on this category. In fact the McCafé concept was initially developed and launched in Melbourne Australia in 2003 and it only arrived the USA in 2001, so their single-minded focus now on coffee to drive loyalty for their entire USA restaurant business is certainly fascinating and we’re impressed with its increasing prominence on their digital app channel.

The McDonald’s App has been downloaded Over 60 Million times 

McCafé Rewards

With competition level differing globally, it is interesting to note the varying levels of generosity awarded by this global brand in its key markets, so here are some of the main value propositions for consumers:

• In the United States, McCafé customers enjoy “Buy Five, Get One Free” rewards for drinks, but this only offered for drinks that are ordered or tracked on its digital app. There is no physical “on-cup” stamp card option.
• In the UK, two options are available. The traditional mechanic uses an on-cup sticker and stamp card which customers collect and this physical programme offers a free coffee reward after buying six drinks. Since January 2020, customers can now track their purchases digitally and its UK app now offers the same richer value proposition that US customers enjoy, offering digital customers one free coffee as a reward after they buy five. UK media have also confirmed that customers can even enjoy a second free coffee if they track their coffee purchases BOTH digitally and physically which is an unavoidable risk for the brand as long as they continue to offer both mechanics.
• In Canada, customers buy seven to get one free, so this market has the lowest reward rate, although as previously discussed, Canadian customers also enjoy the same double-dipping benefit as UK customers if they choose to use both the digital and physical tracking options.

McDonald’s Canada Launched It’s Digital McCafé Rewards in 2019

McCafé Mechanics

1. Customers download the app and locate the digital McCafé Rewards card.
2. Customers must manually select the “scan now” option and either quote the alpha-numeric tracking code to staff, or scan the QR code themselves. The purchase is then recorded in the customer’s account  – a process which takes up to twelve hours, however orders placed on the “mobile order and pay” section of the app are automatically tracked.
3. The coupons for free reward drinks are also awarded and managed as QR codes within the app’s Rewards section.

The McCafé Rewards Card in the US Version of it’s App

So What’s Next for McDonald’s Digitally?

As the world’s largest quick service restaurant with almost thirty-eight thousand restaurants worldwide and the brand now valued at $130 billion, technology tailored to local needs is playing an increasingly important role for the business. McDonald’s has invested in a new technology laboratory in Silicon Valley, focusing on “digital ordering, personalization, payments, loyalty and delivery” and as we’ve seen, this iconic brand adapts these tools as levers in meaningful ways in their global markets. For example, recent app improvements include the ability for US customers to manage their own data and privacy, as well as the addition of “Siri Shortcuts”, which allows customers to add an order to Siri and reorder faster.

Even before the challenges of Covid-19, digital platforms had been described as the “latest battleground in the burger wars” and like some of our other favourite digital loyalty programmes, the best ones combine operational benefits that customers love such as mobile ordering and payment (with the added benefits of social distance), alongside rewards for consumers who buy frequently.

As the US market continues to become increasingly competitive, our own guess is that Mc Donald’s USA will eventually expand its loyalty programme beyond just coffee (as has been rumoured in the past), and it would be incredibly rewarding for consumers if this programme was in fact extended across its entire US menu like it has done in China.

We’ll be watching and learning and of course we will keep you updated as this exciting brand continues its global dominance and increasingly digital business.