McDonald’s Just Announced Some Great News, and It Has These 3 Things to Thank

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McDonald’s Just Announced Some Great News, and It Has These 3 Things to Thank

In the middle of a pandemic, it reported good news. Here’s why.

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This is a story about the three things McDonald’s has done recently that enabled it to report big revenue growth last month, in the midst of a pandemic and economic recession.

The three things? They’re about promotions, predictions, and process — our own new version of the 3 P’s, if you will (as opposed to people process and product). And as you read and learn what McDonald’s has done, you just might find some brilliant inspiration for your business.

First, the big story. McDonald’s said this week that its sales in the United States have bounced back since the start of the pandemic, increasing 4.6 percent over the last three months, against the comparable time period in 2019.

That’s after falling 8.7 percent during April, May and June.

“Our unique strengths,” CEO Chris Kempczinski said as part of a press release, “including our unrivaled drive-thru presence around the world, advanced delivery and digital capabilities, and marketing scale have become even more important during the pandemic.”

I know that sounds like corporatespeak, and in fairness, we won’t know for sure if profits match its revenue growth for that time for another month.

But, I think it’s also easy to break this all down and find some strong takeaways.

First, let’s talk about promotions. In September, the third month of the three month period, McDonald’s teamed up with rapper and producer Travis Scott on a meal deal.

This was reportedly McDonald’s first celebrity meal promotion since the early 1990s, when it teamed up with Michael Jordan. It generated huge headlines and reportedly was so popular that it stretched McDonald’s supply chain, with some restaurants literally running out of hamburgers.

Second: predictions. Because while I am quite certain that not a single person reading this would have put “global pandemic” on their prediction list a year ago, McDonald’s was predicting some other trends, and investing in technology to take advantage of them.

For example, it poured money into trying to “reinvent the drive-through,” and using predictive intelligence to customize digital menus based on time of day, weather conditions, and even customers’ license plates.

It’s still a work in progress, but even if McDonald’s couldn’t have predicted the immediate reason for an increase in takeout and drive through business, it got the trend right.

Finally, there’s process. This might work out to the most important takeaway for other businesses.

In short, besides funnelling people through the drive through more efficiently (McDonald’s said average wait times are down), McDonald’s also streamlined several other key processes.

Some of these were out of their hands, or even serendepitous. For example, the focus on drive-through and takeout came in part because the chain and its franchisees had no choice but to suspend dine-in service in many locations.

But also, McDonald’s streamlined its menu–for example, getting rid of all-day breakfast — something the chain launched several years ago to great fanfare, only to suspend it in May.

Even before the pandemic, reports were that all-day breakfast wasn’t a big winner for McDonald’s, because regular breakfast customers were simply coming in later and buying less-profitable breakfast items–and even forcing people buying food to wait.

Anyway, it’s stories like these that lead me to advise owners of smaller businesses to pay attention to the strategic choices that much bigger competitors make.

Perhaps you can’t duplicate a McDonald’s promotion with a celebrity like Travis Scott. But is there something else you could to do generate headlines? Now might be the time.

Perhaps you’re already spending a lot of time trying to predict the future. If you’re not, does McDonald’s experience convince you that you should?

And as for what I think is probably the most direct takeaway, have you used the pandemic as an opportunity to think hard about the processes you use in your business?

Maybe thinking about streamlining both the decisions that customers have to make (people love choices, but they sometimes hate decisions), and the efficiency with which you can serve them.

Maybe you don’t need to do any of this. Maybe you can also look at your track record over teh last three months, and marvel at how your revenue is much higher than a year ago.

But if you can’t, maybe you should take a look at McDonald’s.

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