Mickey D’s makeover makes a million
Working recently on brand vision projects for big service brands (Tesco and RSA insurance) has reinforced just how big a challenge it is to work in marketing leadership role in such a business. Its one thing to talk about being a "brand-led business", and change the whole customer experience, not just the advertising. But trying to do this is something else. It requires an ability to influence the whole business, and stamina to stay in the job several years to make the long-term change happen.
One such service business that has successfully revamped the customer experience is McDonald's. Its a great example of growing the core business. Just look at the business results since they implemented their Plan to Win in 2004:
– Stock price has more than tripled since 2003
– 40 straight months of positive worldwide sales increases
– Double-digit increases in earnings per share for the past three years
An interview with UK Marketing Director Jill McDonald (brand-led naming!) in the latest Market Leader sheds some light on what drove these impressive results:
1. Store revolution: Have you seen a McDonald's lately? They have been transforming the UK store design since 2006, and my local one got the treatment this month. It has more vibrant colours and less aggressive red. It does actually look quite nice.
As McDonald comments, "The new-look restaurants are so visible, and symbolised that something's changed. It's still McDonald's, but it looks different – more modern, and fresher"
2. Focus on the core: CEO Steve Easterbrook led the process of re-building belief in the core burger business, and ensuring this was delivered with excellence. Also, core products were upgraded to make them less unhealthy. For example, salt was cut by 24% in fries and by 30% in Chicken McNuggets.
3. Operational effectiveness: there was a massive investment in kitchen equipment to allow improved cooking of food, including healthier chicken-based meals
4. Healthy options: the core is burgers, but healthy options like fruit bags and carrot sticks have been added. And before you poo-poo these as window dressing, check out the sales data that McDonald quotes: since launch five years ago they sold 30 million fuit bags.
5. Democratising ground coffee: McDonald's has created a whole new revenue stream by offering fresh ground coffee at competitive prices, offering an affordable alternative to Starbucks. The coffee actually beat Starbucks in blind testing.This has increased traffic at breakfast, and also helped enhance the brand's quality image.