McDonald’s hopes discounts, contests boost mobile sales

Last holiday season, McDonald’s leaned on singer Mariah Carey’s starpower and discounts to drive customers to their mobile app.

This year, the Chicago-based restaurant giant is going further, giving customers the chance to win free McDonald’s for life for themselves and three of their friends with every mobile order. The chain is also offering exclusive access to branded merch releases and deals on food, like a 50-cent double cheeseburger.

The three-week-long promotion, which began Monday, is part of the company’s broader digital strategy to drive traffic to its mobile app through seasonal promotions and create recurring revenue without sacrificing profitability.

In recent years, restaurant companies have turned to loyalty programs to drive downloads of their mobile app and convince customers to keep coming back. McDonald’s CEO Chris Kempczinski said in late October that roughly two-thirds of U.S. customers who used the app in the last year had been active on it in the previous 90 days.

Tariq Hassan, chief marketing and customer experience officer for McDonald’s U.S. division, told CNBC that app users are “more meaningful and more profitable” than other customers.

A little more than a year after its U.S. launch, McDonald’s loyalty program has 25 million members who had been active on the company’s mobile app over the prior 90 days, as of Sept. 30.

For comparison, Starbucks, which has had a loyalty program for more than a decade, reported 28.7 million active U.S. members during its latest quarter. Chipotle Mexican Grill’s three-year-old rewards program has 30 million members, although the chain doesn’t disclose how many have been active over the last three months.

Hassan, who joined McDonald’s more than a year ago after a stint at Petco, said that roughly 40% of digital customers start using its app thanks to marketing and paid media. The fast-food giant has been getting creative, pushing beyond advertising and discounts to attract new app users, particularly through promotions pegged to the time of year.

For example, the company held “Camp McDonald’s” for four weeks this summer. The program included discounts on its menu items, virtual concerts and limited-edition merch collaborations for mobile app users.

Hassan said the company had a goal of adding 2 million app users during the virtual camp but didn’t share how many members it actually added. (The promotion also angered some customers when issues with the third-party site resulted in hours-long virtual queues to buy a Grimace-themed pool float that sold out.)

Still, McDonald’s digital strategy isn’t mean to be flashy. Hassan said he’s told his team to be comfortable being “boring.”

“You don’t change your strategy just to change it, to do the new and exciting thing,” he said.

One way that McDonald’s has gotten comfortable being boring is through its menu. In the early days of the pandemic, like so many other restaurant chains, McDonald’s scaled back its offerings, eliminating items like parfaits and salads, to focus on classic items like the Big Mac and McNuggets. The move away from limited-time menu items proved successful, fueling U.S. sales growth even as lockdowns lifted and consumers resumed their old routines.

McDonald’s digital promotions have also leaned on core menu items. Celebrity meals in 2020 and 2021 put a spotlight on the favorite orders of musicians such as rapper Saweetie, featuring classic menu items like French fries and cheeseburgers.

“When you have that kind of strategic consistency, it gives you more time to wrap those windows with really interesting, exciting and unexpected experiences,” Hassan said.