McDonald's may be a large brand, but it doesn't always want to invest large budgets in marketing. With a little help from Foursquare this Spring, the fast food chain increased foot traffic 33% in one day with an investment of less than $1,000.
Rick Wion, head of social media at McDonald's, is a big fan of such pilot programs. As he says, "the bigger your budget is, the harder it is to scale."
Speaking at the Mobile Social Communications conference in New York, Wion explained that "an app is not a strategy." However, for many businesses trying to get into the social marketing space, it can be confusing and overwhelming to figure out where and when to invest their time and money.
Wion suggests creating pilot programs with small amounts of money and using the results to win over executives and shape larger marketing efforts.
Wion started at McDonald's just a few weeks before Foursquare Day this year, a consumer generated event that celebrated the check-in service on April 16. He noticed the postive word of mouth surrounding the national event and decided to contact the organizers to foster a partnership. McDonald's ended up offering 100 giftcards to Foursquare users who checked into McDonald's establishments on 4/16.
Rather than offer coupons to every person who checked into a McDonald's that day, Wion decided to choose random winners. While not guaranteed a prize, many users checked into McDonald's for the chance to win the $5 and $10 giftcards.
Moreover, even before the special went live, there was an uptick in check-ins to McDonald's stores. McDonald's saw over 50 articles and blog posts written about their special, and won 600,000 new fans and followers. Overall, there was 99% positive feedback.
The most important metric for Wion was foot traffic. On Foursquare Day, McDonald's saw a 33% increase in check-ins from the day prior. And for the week of the special, check-ins increased 40%. Says Wion:
"I was able to go to some of our marketing people — some of whom had never heard of Foursquare — and say, 'Guess what. With this one little effort, we were able to get a 33% increase in foot traffic to the stores.'"
Of course, the increase could have been attributed to McDonald's current customers simply using the new digital interface of Foursquare, but creating a communication line between customers and a brand can help to increase both customer loyalty and sales.
With this special, Wion also sidestepped an implementation problem that chains may have with check-in services like Foursquare. Right now, consumers redeem specials on Foursquare by showing their phones to cashiers and employees of brands that have partnered with the company. But at an international chain like McDonald's with 14,000 stores, it's difficult to expect every cashier to know what specials are being offered on differing digital platforms. Says Wion:
"We want it to be point of sale so that the burden to know the different specials isn't on the crew person behind the counter."
In addition to this pilot program with Foursquare, Wion is working to implement all sorts of new digital marketing tools at McDonald's. They're looking to leverage To-Do's and check-ins, mobile wallet technologies, bolster live events through digital and partner with multiple digital platforms.
"Ultimately we're going to have a whole suite of ways to engage with people."
But with all of those, the company is likely to use a similar pilot testing method. Says Wion of Foursquare Day:
"If it costs us $50,000 to do a pilot program in mobile social, that doesn't scale."
Update: We caught up again with Wion to get some clarification on the difference between foot traffic and check-ins.
Reader comments (18)
4:35PM on 15th September 2010
Question. McDonalds saw 33% increase in check-ins but we know you can check-in without actually settign foot in a store. Did McDonalds see a 33% increase in actual foot traffic?
Search Director at Crafted Media
4:41PM on 15th September 2010
Looks like another misleading Social Media statistic being wheeled out again. While an outdoubted success in terms of coverage, they didn't generate 33% extra foot traffic to the stores: "On Foursquare Day, McDonald's saw a 33% increase in check-ins from the day prior" Emphasis on "Check ins" and NOT foot traffic, it even says later "Of course, the increase could have been attributed to McDonald's current customers simply using the new digital interface of Foursquare" So the actual foot traffic to the stores could have been completely unchanged. These sort of offers are great and it's all the good stuff that social media can do, but it's misleading stats/claims like this that give the SM doubters ammunition.
US Editor at Econsultancy
7:13PM on 15th September 2010
"Foot traffic" is the term that Wion used. I know that Foursquare is able to detect when users are actually in/nearby the place they check in, though I'm not sure that McDonald's used that feature. As I mentioned, even if this was only a check-in increase, it was great for brand purposes. The most interesting part I think is how much the offer increased check-ins considering how small the reward was — and how few people actually received a gift card.
9:27PM on 15th September 2010
Even if there was a 33% increase in foot traffic, what was the lift to sales? If all of those people were crowding the restaurants without buying much or anything, such promotions could backfire. I agree with Ian--we need to be more careful with how we publicize social media success stories lest the doubters and naysayers use our hyperbole against us.
11:57PM on 15th September 2010
I am happy to see this post. In my view, Rick and McDonald's should be commended. We only had three weeks from conception Foursquare Day to execution and in that time we tried to engage national corporations as well as small businesses around the world. It is noteworthy that ONLY McDonald's was able to move fast enough to make it happen and see success. Small business owners were able to make a decision to participate in Foursquare in hours and starting promoting it in days. Big companies either didn't understand it or were too bogged down in bureaucracy to get organized. This contributed to the grassroots, local feel of the day. In the days before April 16, Rick was able to not only roll out Foursquare Day to all the McDonalds in the US, but have an attendee at the Global Swarm Party here in Tampa, FL with support and prizes. Some saw McDonald's as cluelessly piggybacking on the Foursquare Day momentum, but the reality is that Rick and Co. got as excited as everyone else and seized the opportunity. Hats off to them!
Search Director at Crafted Media
8:52AM on 16th September 2010
My issue is that the 33% figures isn't qualified. If McDonalds as a whole had 33% increase in foot traffic in the US as a whole? specific stores? worldwide? or (which I feel is the case) 33% increase in Foursquare foot traffic - the context and degree of success is completely different. Also, if it's a 33% increase, it needs scale. If it's 33% increase in Foursquare traffic, what was it previously? was it 1000, 10,000, 100,000 check ins / foot traffic per day? If they were getting 10 checkins and then got 13 - that's 30% but a massive difference in scale and reach. I completely agree with you that this is only a good thing, social can be very powerful and it's a great thing to see brands adopt it. I just take issue with sweeping statements like these with little context, giving a misleading impression of impact. As I said before, the campaign was an undoubted success, and their movement on it was quick and agile for such a large company.
6:19PM on 16th September 2010
This is not a rocket science question, but the issue is whether it will lead to trial (i.e., at least a one time trial) and adoption. McD has tons of data, so I assume they can figure this out. Still, the program only cost $1,000, so they only needed 250 additional sales of a $4 purchase to break even. For other retailers -- say Gap -- the question would also be whether they are generating incremental sales, or just cannibalizing what would have been future sales.
9:28PM on 16th September 2010
I'm not sure if this is the type of promotion they need; it would be great for generating awareness about an overlooked regional restauant in a saturated market like us (Carl's Jr.). Our company's stats show, though, that online interest and foot traffic are NOT the same thing. I can announce a special coupon on our website through Twitter, get 30 Retweets, generate 1000 hits, but whether those hits = printed-out coupons making their way into the restaurants ... doesn't happen. Which leaves me explaining AGAIN to my Operations Manager just why I support social media as an outlet. Overall, I'm glad we have a very well developed presence NOW, which will help us down the line. I do not think one-shot wonder campaigns are sustainable, and worse, one UP day means we will be "down" week over week" with little to show for it (and more to explain to Ops.) ... The saving grace is that it costs virtually nothing in comparison to Major Media and print.
12:13AM on 17th September 2010
1. I do agree with the most of the commentators that the headline is sensational.
2. But, McDonald's got a bunch of people to bid on gift cards - which are usually worth more than their face value to the franchise system because of continuity effects.
3. They got great data for $1,000 and a lot of publicity!
9:19AM on 17th September 2010
Honored to work with McDonalds on Foursquare Day. I really was astonished on how quickly Rick and the Mcd's crew were able to establish and put in to play this action. It was only less than a week and we were rolling in frappes and foursquare checkins.
1:16PM on 17th September 2010
This headline is hyperbole and reads like a spam article. McDs didn't increase their foot traffic 33% on one day because of 4sq, they increased 4sq checkins 33% from one day before. Ugh.
11:32PM on 17th September 2010
It's good to hear that FourSquare is getting some attention from some main stream establishments. That is pretty cool to hear that they were able to increase the foot traffic by 40%.
12:42AM on 18th September 2010
The Read Write Web guys point out that as there are only 1m Foursquare users and c 26m daily burger eaters, a 33% increase of 26m is somewhat - er - supersized ;-)
6:31AM on 18th September 2010
i must exam also the results it is good for my case study in Greece?? www.eklogika.gr?
8:09AM on 27th September 2010
What can we say; it is good intelligent step by the McDonald’s, which allows them to increase the foot traffic upto 33% with an investment of less than $1,000.
10:53AM on 27th September 2010
In theory, these results look amazing. However the real question is: what was the uplift in sales as a direct results of this campaign?
Was 33% uplift in sales achieved on that day? Was any uplift registered at all as a direct result of this campaign? If not then this was purely a brand reinforcement exercise - with intangible results - at best.
If it does not positively affect the bottom line (either now or later) then it is a waste of resource, even if it cost a mere $1,000.
12:31AM on 6th October 2010
33% of 1m, 1% of 26m. Who cares.
The numbers, except for the $1000 investment, are irrelevant. Do you think McDs increased their sales by more than $1000 for the day at each of the stores that had a corresponding increase in check ins? I would say yes. An assumption, sure, what a safe one Id suggest.
5:04PM on 9th March 2011
1. Response to Meghan's comment: While "'Foot traffic' is the term that Wion used". Wion is responsible for social media, and has a strong incentive to make it sound better that it really is.
I am a marketing analyst for one of the largest restaurant companies in the US, and I deal with this all the time from the Marketing folks. They use misleading stats to make things sound better than they really are. Once a true analysis is done, they are often losing money on programs they claimed were wildly successful.
Most of the commentators above are absolutely correct. A 33% increase in check-ins is NOT meaningful – we need to know the increase in actual sales.
2. To the folks that said you need $1000 in sales to pay for a $1000 marketing program: Those sales involve providing food -- that food costs McD’s money. Also, they probably had to increase staffing, which also costs money. The equation is really Additional Sales minus Additional Costs must be $1000 or more. It probably took $3000 - $4000 in sales to cover the $1000 in marketing costs
Log in to post a comment