McDonald’s loyalty scheme does what Dropbox did — rewarding consumers with their own product

In 10 locations in the UK, Mcdonald’s has unveiled a loyalty program titled “My McDonald’s Rewards”.

It’s a pretty simple scheme.

Spending money via the app enables customers to earn points — which can be exchanged for items from the menu. Users will get 100 points for every pound they spend. The points can be accumulated to redeem different items.

For example — 2,500 points will unlock a Double Cheeseburger, Bacon Mayo Chicken, or Vegetable Deluxe.

Why McDonald’s loyalty scheme can bring great results

Efficient reward promotes the product further

In the case of Dropbox, they awarded their users with free space for sharing on social media and getting new users.

PayPal also rewarded its referrers with PayPal credits.

By rewarding with their own product, McDonald’s will in essence encourage users to spend more or reach more people with their food.

More data — resulting in clearer LTV, CAC & a robust RFM model

McDonald’s can measure more accurately how much they need to spend to bring a new customer in — and then track how much that customer spends over their lifetime.

Getting accurate LTV and CAC will allow McDonald’s the flexibility to price their products better, adjust marketing strategy and even improve service.

It’ll also allow McDonald’s to see who are their more loyal customers, big spenders, and lapsers. The RFM model helps in determining that. McDonald’s can run specific campaigns to bring back lapsers or big-ticket spenders.

Sense of urgency will lead to the fear of missing out (FOMO)

The points earned come with an expiry date.

After a year, they will get expired if not used.

This allows McD to create a sense of urgency. That urgency will bring customers back who hadn’t ordered in months. FOMO works very well in marketing.

As we know, bringing back existing customers is always cheaper & more profitable than getting new ones. This expiry date, although not a new innovation, adds a nice touch to the scheme.

The feel-good factor of being able to donate

Customers can donate their points to BBC’s Children in Need.

The points will then be converted to cash donation at 1%. That means 1000 points will become 1 pound.

That doesn’t sound like a lot but let’s do a bit of math.

Each pound gets 100 points. So, to get 1000 points a customer needs to spend 10 pounds. The customer can then donate 1 pound by encashing the points.

The customer gets to donate 10% of his spending at no extra cost to him/her.

That’s pretty amazing!

To summarize- McDonald’s Loyalty Scheme- game-changer or not?

McDonald’s loyalty scheme is a game-changer!

This new loyalty scheme can be a gamechanger as it will allow them to understand their customers better by giving them more of their products, bring back existing customers, and allow the customers to feel good by donating to Children in Need.

If this is not a win-win, I am not sure what is.