Why we’re lovin’ McDonald’s 2020 holiday promotion

(and what small business owners can learn from it)

Marketing isn’t an easy task, even if you’re a large national brand with a large budget. 

Big brands can do national research with your target audience, come up with an idea that really resonates with them and still get completely skewered by the media and people who are not your target audience. 

Anyone remember the Peloton ad from last year? Peloton got completely roasted for an ad picturing a woman getting a bike from her husband and having a look of fear/excitement about it. PS - as a Peloton owner, I saw that ad and completely understood how the women felt - there are certain instructors whose classes I take with that same mixture of excitement plus a lot of fear because those classes are HARD. Luckily, that backlash is way behind them - Peloton has had their best year yet.

Anyway. I digress. Back to my original point. It can be tough to be on the national stage as a large brand, especially when you’re arguably the best known brand in the world.

We want to give McDonald’s a big high five for their 2020 holiday promotion. If you haven’t heard about it, for this promotion, they give away a free food item every day, and tie that food to a famous character from a Christmas movie. Apparently Scrooge loves a Big Mac - who knew?

Here’s why we love this promotion. 

The promotion inspires consumer goodwill

From a consumer standpoint, the idea of McDonald’s giving back to their customers in a year like 2020 when so many are struggling is great for their image. Brands who can give back to their loyal customers should do so, this year more than ever. It’s hard to argue with free, and 12 days of free is very generous. 

Consumers are savvy, and they know that McDonald’s is one of the companies that actually saw sales increases this year, when so many restaurants did not. Giving away food so freely is a great way to give back and show appreciation to their customers. It’s the right tone in a time when so much feels wrong. 

It encourages app download and usage

This marketing promotion isn’t just a way for McDonald’s to give back to its customers. It’s a fantastic way to drive app downloads and usage, because the free items are only free if ordered using the app.

If we had to place a bet on it, we would bet that McDonald’s mobile app team will be jumping for joy after the promotion, because they’ll see greatly increased numbers of new users and also repeat users on the app. 

Restaurants create apps because it gives them unprecedented access to their consumers. Through push notifications and email, restaurants can directly contact their consumers to tell them about a promotion or a new menu item. 

Then, they own the data. They can see how many times a customer has purchased, and if they worry about lapsed usage, they can send them deals that are almost impossible to refuse. And, best yet, the restaurant doesn’t have to pay an advertising fee to use the space - the space within the app belongs to them, unlike social media platforms or other digital spaces. 

It drives frequency 

Remember when I said that 12 days of giveaways is generous?

It is. But there’s also some great strategic thinking behind it. Why? Because along with 12 days of giveaways, McDonald’s is encouraging customers to come back again the next day, and the day after that. 

In marketing terms we call that frequency, and frequency is an important metric, especially when a brand like McDonald’s has big competitors like Wendy’s, Taco Bell, and countless other fast food brands competing for the consumer’s share of wallet. 

Driving frequency can make meaningful impact on market share - encouraging customers to choose McDonald’s for more occasions means they choose McDonald’s competitors less.

It also drives basket

Driving basket is a term I learned in my shopper marketing days working with Procter & Gamble. To drive basket means to shoppers or consumers to buy more than they might normally. Or, in plainer words still, to encourage shoppers to add more to their basket on a given shopping trip. 

With the exception of Christmas Eve, McDonald’s is not giving away products completely free. Each day’s free food items are only free with purchase of at least one dollar’s worth of other food items. So, McDonald’s is essentially “driving basket” with this promotion, knowing that its customers will have to purchase at least one other item in order to get the freebie.

Well done, McDonald’s. We believe your team will be unwrapping some great sales numbers under the tree after this promotion. 

Small business owners and marketers with small budgets, take note.

You don’t have to be a large national brand to learn from this promotion.

Small businesses, here are a few things you can take away and apply to growing your business.

Drive habit and frequency

You don’t need an app, or even technology to drive habit or frequency. Simple punch cards where you give a discount or a free product after 10 purchases are a great way to drive habit and frequency. Or, having a weekly event, like “Taco Tuesday” at your restaurant can also be a great way to drive habit and frequency.

Consider your “chain of value”

It can be a sound marketing strategy to give away or price a product low in order to drive traffic to your store or website. However, you must have a plan to sell additional items or a higher-priced product so that your margins don’t take too much of a hit from this kind of promotion. 

Here are two small business examples of this - one service-based business, one product/retail-based business. 

Service-Based Example: Andrea, an Accountant, looking to increase her client list, has a free “Tax Planning Checklist” that she gives to prospective clients. It’s a beautifully designed and very useful tool. Prospective clients love using the tool, and then when they want help with their annual taxes, they call Andrea for help, because they love using her tool. Andrea knows that while she could charge for people to use this tool, it’s a great way to get new clients, which is her primary objective.

Retail-Based Example: Esters, a local Denver restaurant with multiple locations, has a “kids eat free” promotion. It drives families to come in and spend money on meals and drinks, and is a profitable (and popular) promotion.  

Focus on “owned” communication channels

McDonald’s owns the real estate within their app, but you don’t have to have an app to have an “owned” space to communicate with your customers. Email marketing is a great example of a low-cost or free way to have an ongoing conversation with your customers and prospective clients. An email list is one of the most valuable assets you can have (and use) as a small business owner. 

Reward your loyal customers

Remember to reward your best customers. Finding small ways to say “thank you” to them (at the holidays or any time of the year) makes them feel appreciated and will also drive their loyalty. You can do this with thank you cards, exclusive events, or discounts.

Need some help applying these ideas to your business?

Looking for some ideas on how you can drive frequency, loyalty or drive basket for your small business? Contact us anytime, or set up a marketing consulting call. We’ll be happy to brainstorm ideas with you.