Skip to main content

Winning customers

Six out of 10 McDonald's outlets in the UK are run by franchise owners, each of whom contributes 4.5% of sales to the group's marketing budget. This may be a useful benchmark for your business when you think about how much you spend on promoting your business.

While McDonald's frachisees expect to see great TV advertising for their money, local retailers might like to think about the strategies behind the advertisements.

In 2005 McDonald's had a terrible year in the UK, losing sales and generating bad PR. In the past year, sales have grown by £460 million, chief marketing officer Jill McDonald tells Campaign magazine, driven by £90 million of marketing spend.

The turnaround has been achieved by refreshing the outlets, investing in better kitchen equipment so it could deliver hot food faster, and by promoting the quality of its food.

If you look behind most successful local shops in the UK you will see a similar pattern: investment in making the store attractive, getting the customer offer right and talking up the qualilty of what you do.

The real lesson is that even with a £90 million marketing budget, McDonald's says it cannot be complacent. "If we don't meet our customers' needs they'll soon tell us," says Jill McDonald.

As food-to-go becomes a bigger category for local shops and as the government pushes its healthy eating agenda, expect to learn from the marketing messages that McDonald's uses and to feel the chill wind of competition from its outlets.

Comments

Popular posts from this blog

The launch of the 2009 IAA

We are launching the 2009 Independent Achievers Academy tomorrow in London with a group of retailers and suppliers. The marketing team have come up with a great practical exercise to help us relive the Academy experience. At its heart, the IAA has a simple concept: set a goal, plan to hit it and celebrate the outcome. I hope to learn lots from participants and will pass this learning on to you.

What do shoppers see

I read a good post (http://www.newsagencyblog.com.au/2009/08/28/what-do-newsagents-charge-for-faxing.html) asking what price local shops charge for providing a fax service. The blogger had attached a photograph of his sign with his prices on it. What struck me was the message on the sign. "You drop, we fax," it said. "Pressed for time, drop your documents with us and we'll do it for you at no extra charge." That is a message that will persuade most shoppers that you want to give them good value, even if they stay to do the copying or faxing themselves.

Local advantage? Sainsbury's boss argues it is from his stores.

Online businesses don't pay local taxes, Sainsbury's boss Justin King argues in a big CityAM interview spread. Unlike the web retail businesses, Sainsbury's  "pay business rates at a local level" and "employ people locally" and "pay people locally" and "they spend their earnings locally". "If we are seeing a shift in consumer behaviour towards purchasing online rather than their local store then the government will have to address that the tax system is being usurped by a change in behaviour," he adds.  The point to notice here is that connection of Sainsbury's with "local shop". It is spin. But very effective spin. As any independent retailers who have talked to their MPs about competition from multiples will know, the grocers are very successful at projecting the "local" benefits that they will bring. Perhaps 10 years ago this was true. But supported by a better supply chain, independent...