McDonald’s has announced that its loyalty program members contributed over $6 billion in system-wide sales globally in the first quarter of the year. In the U.S., the company boasts 34 million active digital customers, lagging slightly behind Chipotle Mexican Grill with 40 million members and Starbucks with 32.8 million members. However, McDonald’s has set a goal of reaching 100 million loyalty program members by 2027.
To fund this ambitious plan, McDonald’s is suggesting that franchisees use their existing marketing contribution of at least 4% of gross sales. This may require franchisees to cut back on traditional marketing strategies like TV commercials, in favor of tactics that have a more direct impact on sales. In 2022, U.S. franchisees will be required to contribute 1.2% of projected identified digital sales towards the fund, with the rate changing annually based on yearly projections.
In return for their investment, McDonald’s is forecasting that U.S. restaurants will see an increase in cash flow of approximately $2,600 per year starting in 2025. This boost is a result of digital investment costs being shifted from a franchisee’s profit and loss statement to the marketing contribution. Franchisees in the U.K., Canada, Australia, and Germany will also participate in funding the global digital marketing fund, with other markets expected to follow suit in the future.
McDonald’s loyalty program has been instrumental in driving sales growth for the company globally and has been crucial in attracting younger customers who value convenience and affordability over traditional fast food options.
The success of McDonald’s loyalty program can be attributed to its simplicity and ease of use for customers. Members can earn points for every purchase made through their mobile app or at any restaurant location worldwide.
The loyalty program has also helped McDonald’s personalize its offerings for its customers based on their preferences and spending habits.
Overall, McDonald’s ambition to reach 100 million loyalty program members by 2027 seems attainable as long as franchisees continue to invest heavily in digital marketing strategies that drive sales growth and customer engagement.
