McDonald’s promo proves a winning formula is ageless

Over the last few years as advancements in technology approach breakneck speed and the ‘internet of things’ has started to influence pretty much every aspect of our lives, the broader trend in business has also been to focus on speed and efficiency.

Entrepreneurs across the globe are running faster than ever before. They’re frantically trying to build the next unicorn, mine data, growth hack, gamify, hustle …

And in the retail space specifically, the panic about overseas raiders borders on hysteria. With all the talk of Amazon’s eventual domination I can’t help but conjure up an image of the ‘Buy n Large’ corporation from the Pixar movie, Wall-e. The monolith business eventually renders earth uninhabitable and forces the population onto space liners (also owned and managed by BnL) to cruise the stratosphere on a permanent holiday. The permanent holiday bit I like, the lack of photosynthesis not so much.

And that’s why the McDonald’s Monopoly promotion is both comforting and impressive.

A few years back I wrote a piece that gave McDonalds a bit of a kick. They responded very positively and we’ve been friends ever since. Well, friends in the sense that my family helps keep a few local franchisees in business.

Given their high profile in the QSR landscape and their considerable marketing spend it’s hard not to notice them really and their annual Monopoly promotion makes the task even more difficult.

This year, more than ever, the Monopoly promotion seems to be everywhere. TV and radio advertising including some clever in-program sponsorships, outdoor, social media, cinema … if you consume even a morsel of mainstream media you’ll have been exposed to it.

What you might not know is that McDonald’s has been running this promotion in the USA since 1987 and the Australian operation for around a decade. It’s now the major annual marketing event for Maccas in 18 different countries.

As a retail promotion it truly has stood the test of time … despite a few bumps in the drive thru lane.

In 1989 McDonald’s decided to change things up a little with a ‘Who Wants to be a Millionaire’ promotion. Apparently people preferred to phone-a-friend to source rare stickers rather than buy more Big Macs so it was quickly ejected from the hot seat.

Also in the US, friends and family of Jerome Jacobson won every major prize between 1995 and 2000. Jacobson wasn’t ‘tinny’ nor did he eat a shedload of Macca’s, he was the head of security for the promotions company charged with overseeing the distribution of the winning stickers.  Using a simple yet effective ‘swap ‘em out with dud stickers during an in-transit toilet stop’ system that would have done the Hamburgler proud, he would sell the winning stickers for cash, pocketing over a million dollars along the way.

As the authorities closed in on the conspirators (ironically, one of the final arrests took place in Fair Play, South Carolina), the man dubbed Uncle Jerry by the FBI, sent a million dollar first prize sticker to St Jude’s Children’s Hospital in Memphis, Tennessee. It didn’t stop the judge giving him three years in gaol. The Hospital got to keep the money.

While it was a PR disaster for McDonald’s and cost the promotions company a long standing, lucrative contract which ultimately resulted in its demise, the punters didn’t really give a toss.  McDonald’s ramped up the number of winning tickets and major prizes for the next few years and people are still searching for rare stickers almost 20 years on.

While there’s documented evidence of major prize winners in the USA, I couldn’t find anyone in Australia who has won anything more than a microwave oven or big screen TV. It’s not surprising really. The odds of winning a free medium fries is one in four however, you statistically have more chance of being killed by a vending machine (1 in 112 million) than winning a main prize, one of two Suzuki Swift cars (approximately 1 in 150 million).

The mechanics of the promotion are especially interesting given the recent rush to digital and the obsession with moving everything (including the lion’s share of the promotional spend) online. While the Monopoly promotion does have an online component driven by a dedicated app, the experience of peeling and collecting stickers is the more engaging element of the promotion.

The game ‘pieces’ are essentially the same each year however, the prizes tend to change depending on which brands have been convinced to partner with McDonald’s. Experience tells me these businesses would essentially donate the prizes for the ‘in kind’ exposure which is not insignificant given the promotional blitz in 2017 and the considerable point-of-sale signage.  Dare I say that the promotion may be losing some gloss with ‘sponsors’ as the prize pool this year is weaker than those I remember. Whilst I hate paying $50 for parking when I visit the CBD, 24/7 access to a parking garage and use of a hire car for 12 months don’t really qualify as ‘major’ prizes in my world.

Interestingly, US customers can only win cash prizes or free food. And therein is the most important aspect of the promotion and one that remains consistent year after year …. you can always win more food and winning free food means people keep coming back. Any strong consumer promotion should generate repeat store visits and, ideally, repeat purchases and the annual Monopoly event is a textbook example of this!

More importantly for McDonald’s and its shareholders, the promotion appears to deliver a significant spike in sales each year and in the US has been touted as helping the brand stave off a concentrated push from Burger King and Wendy’s to unseat it as the king of fast food restaurants.

In 2010, the promotion was acknowledged by McDonald’s as a key sales driver and in 2013, CBS News reported that the Monopoly promotion had a positive effect on its annual profits. McDonald’s Australian operation does not release its local figures separately however, the 2015 accounts for McDonald’s Australia Holdings who own and manage around 1 in 6 stores, reported a nice bump in turnover and the consensus is that the Monopoly promotion plays a big role in driving customer traffic.

So why does it work so well, year after year?

  • It’s a concept that everyone can follow regardless of age, ethnicity and socio-economic status
  • It uses simple mechanics
  • Has an instant gratification component as well as an aspirational prize pool
  • Keeps the customer engaged even if they ‘lose’ first time around
  • It rewards most (if not all customers) at some stage during the promotional period
  • There are multiple ways to win
  • Incorporates strong promotional partnerships to offset the cost  – Macca’s really only have to front for the cost of the food related prizes
  • Generates repeat visits and an increased ‘share of wallet’  – if they need fast food they’re more likely to choose Macca’s because they can play and potentially win
  • Excellent tie-up in store and strong staff communication resulting in excellent ‘product knowledge’
  • Supported by a strong promotional effort – the worst thing you can do is under sell a great promotion.

I worked with major retailers for many years and completely understand how difficult it is to plan and execute a successful major retail event. There is always pressure to come up with something bigger and better. I’m sure McDonald’s have felt pressure to change the promotion over the years but I commend them for staying the course. There will come a day when the sales spike and engagement levels don’t justify the expense but I think we’re a few laps of the board away from that yet.

And if you think Macca’s has a monopoly (sorry, I just had to) on consumer promotion longevity, their annual event pales into insignificance compared to the longest running consumer promotion in history. Each year since 1932 Maxwell House Coffee has produced a Hagaddah booklet (a written guide which includes  prayers, blessings, rituals, fables, songs and information for how the Seder should be performed) to help its Jewish customers celebrate Passover. Over 50 million booklets have been printed over the last 75 years making it the most widely used Hagaddah in the world.

2018-03-29T23:55:59+00:00 October 5th, 2017|Categories: Business Identity, Business Strategy|0 Comments