Mc Donald’s and its CRM technology

Objective :
To understand the CUSTOMER RELATIONSHIP MANAGEMENT in McDonald’s

About Company :
McDonald’s Corporation is a “Centralized, International company”, which is the largest
chain of fast food restaurants with more than 30,450 fast-food restaurants in 121 countries
worldwide. Fifty eight percent of these stores are operated by franchisees, twenty eight by the
company, and fourteen percent by affiliates. McDonald’s expand its market into foreign
countries through three primary methods ,franchising, company owned restaurants, and
joint ventures which will help McDonald’s easily to be accepted into unfamiliar markets and
franchising continues to contribute heavily to McDonald’s international success. Although
its expansion rapidly, McDonald's still manage a tight grasp on operations, cost and
quality by using a centralized, international structure. However, McDonald needs to face the risk
of its change in operation strategy.
The CRM strategy of McDonald's

McDonald's CRM objectives and strategy

 General strategy
 Interaction with the customer
 Fast-feeding with services?

Where are they particularly good?

 The Brand recognition
 The feels-like-home concept
 Adaptability

McDonald's have developed a price-slashing and low volumes policy; and comprise the main
components of its competitive advantage. Prices have to be affordable in order to deliver a variety of
meals every day. McDonald's is not a regular restaurant. They want to attract the customer as
regularly as possible, and thus, the prices of the meals cannot be too expensive. The prices are not the
same in every country and they can vary in a country depending on the city or the restaurant.
Moreover, about 70 % of the sales at McDonald's are conducted within four hours. Hence, they
decided to try and change the dietary behavior in order to attract more customers during the off-
hours. For example, if you buy a meal at lunch, you have a discount on a second meal which is
bought before six in the evening.
Types of customers:
There are three kinds of customers at issue here.

Group One: which is those who love McDonald's and are loyal customers.
Group Two: which is those who detest McDonald's and everything it stands for.
Group Three: which is those who are not wild about the chain but will quite willingly go there
when it's the best of weak options, such as when traveling and the choice is between McDonald's and
an entirely unknown local restaurant with a frighteningly empty parking lot.
Say what you will, you members of Group Three, but McDonald's excels at quality control.
Granted, that quality-level lever is set quite low, but it's valid to say that a Quarter Pounder will
taste pretty much the same at any McDonald's.

Quick-serve restaurants (QSR):

In McDonald's category of fast food known in the business as quick-serve restaurants, usually
referred to as QSR they overwhelmingly dominate in mind share. As a practical matter, that
translates to: When those consumers want fast food, McDonald's is often the first name that
crops up.
If McD's wants to boost its slice of the QSR market which it does it has little room to move, though
it can thank decades of its own advertisements for that. Its better shot would be to increase how
often those consumers find themselves in QSR-friendly situations (more business travel wouldn't
hurt).
Rightly or wrongly — and in my view, it's rightly — McDonald's has been tarred as the worst
offender in the healthy eating category. As that category grows, it will take revenue away from
stores like McDonald's and will give it to those who are perceived to be healthier. This is not a
game of truth, but of perception. The brand that McDonald's has spent generations cultivating is
coming back today to bite it.
Mcdonald’s improves customer satisfaction

When you serve more than 25 million people each day, leveraging the right CRM solution is
important. McDonald's customer satisfaction contact center was quickly outgrowing their CRM
system. This system lacked the functionality to meet their evolving business needs and it was
time to look for a better solution.
McDonald's was looking for improved functionality for their customer satisfaction group, as well
as a tool that provided the company with real-time access, via flexible and comprehensive
reporting, to the data that was collected from customers each day.
Their objectives were to,

 Increase data capture with regard to customer feedback and satisfaction

 Provide both McDonald's franchisees and corporate management with real-time access to
customer data
 Integrate the company's extensive and constantly changing restaurant database into a
reliable CRM tool
 Gain robust and actionable reporting capabilities that provide measurable customer
satisfaction results from the national to franchise level
Provide system functionality and flexibility that will support evolving business needs
Implementing ePowerCenter in the customer satisfaction contact center, McDonald's decided to
also deploy it in contact centers supporting Human Resources, Investor Relations, and Operations.
They've also extended its use to support their restaurants in Canada.
EPowerCenter allows McDonald's to track more than 600 types of diverse customer issues through
issue codes. It also enables them to capture other very specific types of information from
customers regarding their experiences at McDonald's restaurants nationwide and in Canada.

With more than 15,000 restaurants just in the U.S., ePowerCenter provides McDonald's the ability
to integrate into their CRM systems. This combination of databases gives them the power to
measure customer satisfaction results both from the national level, and down to the individual
restaurants. Ease and flexibility made ePowerCenter the perfect choice for McDonald's.
McDonald’s CRM Software Tools
In order to ensure that there is a consistent customer relationship throughout these many restaurants,
McDonald's uses a method which provides improved data capture, real-time reporting, and fast issue
resolution. This uniformity is down to the utilization of a program called Power Centre, supplied by
Astute Solutions. The software provides a data capture and information database which can be used
to monitor and measure the customer relationship throughout the brand.

The Power Centre software brings in data from throughout the company and includes both positive
and negative reviews. Being able to assess restaurants by region, or even individual restaurants,
means that McDonald's can quickly spot potential customer relationship issues and resolve them
before they become a serious problem. Information is passed through the company quickly, providing
key results.

McDonald's started looking for a service provider with a concrete set of goals. They wished to
extend the capacity for data capture from customers and have software which could provide both
McDonald's corporate services and individual franchises with access to real-time customer
information.
They also wanted to be able to integrate their existing database into an effective CRM tool without
the software becoming bloated or manageable. In addition to this’ they also wanted software which
was flexible and functional to provide support for their evolving needs as a business.

Strong Customer Relationship Can Improve Sales

As a part of its digital transformation McDonald’s is now investing in technology and using digital
innovations to meet its goal of moving from mass marketing to mass personalization. The company is
looking at increasing its one to one interaction with customers and the loyalty program will act as an
enabler for this goal. McDonald’s can use the data to understand customer behavior and preferences
and lure customers back into restaurants if they have been absent for a while. The company believes
that its loyalty program will be the future of its customer relationship management and can be a
significant sales generator for McDonald’s. As the company works on its turnaround strategy, it
should benefit in three major ways through its loyalty program:

 Build a strong relationship with its customers and have better data to gather insights on
customer behavior and preferences.

 Compete better with players, such as Starbucks and Dunkin Donuts, who already have loyalty
programs running.
 Increase sales and encourage repeat visits.
As per our estimate, the average spend per customer visit at McDonald’s company operated
restaurants will remain steady at slightly below $4.00 over our forecast period. There can be an
upside to our price estimate if the average increases in future.

As McDonald’s works on its turnaround strategy, some of its key initiatives such as All Day
Breakfast have been successful in driving revenue growth. We believe its technology initiatives and
the loyalty program should help the company build stronger relationships with its customers and
improve its offerings through customer feedback. In the long term, these initiatives should translate
into higher sales for the company.
Enhancing customer experience
According to management, McDonald’s will continue to build the business in 2013 and beyond by
enhancing the customer experience through optimizing its menu, modernizing the customer
experience, and broadening accessibility to its brand. The company remains focused on seizing the
long-term opportunities in the $1 trillion IEO segment by leveraging its competitive advantages. It
has a brand advantage in convenience, menu variety, and value, a resilient business model, and the
experience and alignment throughout the McDonald’s system to navigate the current competitive
environment in the sector.
McDonald’s number-one priority continues to be satisfying its customers’ needs by serving great-
tasting, high-quality food in contemporary restaurants. This focus on its customers is particularly
critical in this uncertain environment, where ongoing volatility continues to negatively impact
consumer sentiment and spending. The company anticipates a continued flat to declining IEO
segment in many of the markets where it operates. Growing market share will remain its focus in
order to attain sustainable and profitable long-term growth. With respect to customer experience, the
company will continue to reimage its building interiors and exteriors and provide its restaurant teams
with the appropriate tools, training, and technology.

Accessibility
Accessibility-related efforts will include increasing the level and variety of conveniences provided
to its customers through new restaurant openings, extended operating hours, stronger value
platforms, and faster, more accurate service through innovative order taking. With operational and
financial discipline, the company will execute these priorities to increase McDonald’s brand
relevance.

Mc Donald's also takes into account the specificities of each country:

For example, in China, TV has not had the same impact on customers as in France, and they focus
more on newspapers in these countries. The communication at Mc Donald's is running smoothly and
does not need to be often changed. Of course, they regularly adjust to the new trends and interests
of their customers, but their basis is still the same. b. The feels -like-home concept one of the new
concepts they had developed in the past years is the feels-like-home concept.

Diversification of the services:

It is not only about food in a McDonald's as there are many other services that are added to this. In some
restaurants in the US, you can now also rent DVDs, for instance. b. Interaction with the customer
another important point of the strategy of McDonald's revolves around its interaction with the customer.
The objective of the company is not to know about the customer, but to study about the market they are
in.
Freedom within a framework
We pay special attention to how our customers are alike – and how they are different too. For that
reason, markets and countries have latitude when it comes to menu, marketing, community
involvement and local business management.

Communicatewith your employees

Your CRM may be designed to handle large amounts of data, and to facilitate communication
between various groups, but it is your staff that will determine whether or not your goals are met.
Involve your employee in every step of the strategic process. This will help them not only internalize
the objectives, but will also give them personal ownership over the direction that the company takes.
Invested employees will be better able to integrate new policies and technologies in a way that will
benefit everyone involved;