McDonald’s 7M app downloads highlights effectiveness of relevant incentives
During this week’s earnings call, McDonald’s revealed it has seen more than seven million downloads of its mobile application since the fall 2015 launch, proving that welcome offers are directly correlated to high registration rates.
The food and beverage marketer introduced the app to United States markets approximately three months ago, after experiencing a lackluster year in sales. The seven million-strong downloads, however, have been able to fuel consumer purchasing behavior by prompting users to activate their welcome offers in-store.
“Part of [the app’s success] can be attributed to the free sandwiches and McCafe’s; McDonald’s has a cheap high-volume product that is absolutely perfect for this type of incentivization,” said James McNally, senior manager of business development at Prolific Interactive, Brooklyn, NY. “Brands and mobile strategists should of course keep in mind that free sandwiches aren’t the silver bullet for driving app downloads, and McDonald’s clearly has a lot of other marketing muscle to promote.
“Other brands would do well to study McDonald’s promotions that are tied to local sports teams, for example, as a great way to use big-brand marketing power in a targeted and effective way.”
Serving up mobile coupons
Consumers who opt to download the McDonald’s app, which is powered by Mowingo, will have access to a slew of features designed to augment their dining experience, including the ability to browse the menu, view a nutritional calculator and redeem mobile coupons.
McDonald’s first previewed the U.S. version of its app with consumers in the Philadelphia region this past September by tacking on a complimentary item for each download, proving that incentives are king in the food-and-beverage sector (see story).
During the earnings call that took place on January 25, McDonald’s president and CEO Steve Easterbrook revealed that the brand is seeing many of its downloads accompanied by in-store activations from customers eager to get their hands on a free menu item.
This incremental sales growth will likely help the brand start 2016 off on the right foot when it comes to digital commerce.
The strategy of attracting new and existing customers with a welcome offer is one that other food and beverage chains should also be employing.
“Any call to download a retail app should be accompanied by a clear explanation of the app’s value to the consumer,” said Daniel Dreymann, CEO and co-founder of Mowingo, Palo Alto, CA. “Mowingo’s experience shows that instant gratification, in the shape of a welcome offer, works very well for quick service restaurants.
“Fine-tuning a QSR’s welcome offer dramatically affects not just the number of downloads but also the quality of the new users: the right offer brings in loyal users who will keep using the app over time.”
Spotlighting mobile metrics
Mr. Easterbrook claimed that McDonald’s has a number of app-related metrics it continuously measures on a daily and weekly basis. In addition to monitoring the number of app downloads, the brand also keeps up with registration numbers and in-app activity.
As users begin to get more comfortable with the app, McDonald’s will start communicating to them more readily. The chain may ask them to input their location of residence so that it can remember the nearest bricks-and-mortar restaurant, and subsequently localize the mobile offers sent to those customers.
McDonald’s is currently experiencing higher registration rates than the industry norm, likely due to the enticing initial incentive. The brand’s primary tactic is to leverage loyalty and coupons to prompt users to become more familiar with the app, which in turn will result in higher active usage.
Since many consumers feel their smartphones are inundated with various mobile apps, it is imperative that brands offer long-lasting value to prevent deactivation.
Additionally, the fast food chain has found success in leveraging sports activations within its McD mobile app that offer promotions tied to local sports teams, resulting in 57 percent more active users in those markets (see story).
As the Big Mac marketer gears up to tackle 2016 with a wider focus on mobile commerce, it must also continue to enhance the in-store experience. Several of its restaurants in Britain have already begun tapping modernized in-store platforms, such as self-order kiosks and customized order pick-up options.
“Mobile can be a key part of McDonald’s broad and multi-faceted turnaround initiative, but for a brand of that scale, it’s not going to be the panacea,” Prolific Interactive’s Mr. McNally said. “Mobile is a special channel that McDonald’s can use to redefine the customer/brand relationship, but it’s only one part of puzzle.”