McDonald's Double Cheeseburger

9 December 2011

What’s The Beef? McDonald’s Gets The Customer-Centricity Treatment

by Freddy Tran Nager, Founder of Atomic Tango + IMC Instructor and Practitioner; photo by BrokenSphere via Wikimedia Commons…

So I’m reading IMC The Next Generation by Professor Don E. Schultz, the father of integrated marketing communications. This seminal book offers some good approaches to marketing management, such as value-based customer segmentation and goals-based budgeting, with a large side-order of raw naiveté, the nonsensical customer-centric marketing mix.

But what inspired me to write this isn’t Schultz’s ivory tower myopia but his Golden Arches slam on pages 167-168:

“On any given day, 11 percent of McDonald’s customers are dissatisfied. About 70 percent of dissatisfied customers are further dissatisfied with the way their complaint is handled. More than half of all dissatisfied customers visit McDonald’s less frequently as a result and tell as many as ten other people about their unsatisfactory experience… While the company is still a fast-food giant, it loses an estimated $750 million a year as a result of this marcom inconsistency. Even for McDonald’s, that’s a lot of money.”

And that statement is a lot of bull…

Now, I’m no fan of McDonald’s, but it’s not because I’m dissatisfied with their service — I’m actually impressed by McD’s clockwork operations and consistency. I just happened to see the documentary Super Size Me, and I’m not interested in putting any McD products in my body.

But I will defend the chain against superficial thinking. Schultz’s “estimate” (not proof) that McD’s loses three-quarters of a billion dollars annually because it dissatisfies 11% of its customers is not only a hasty assumption, it could be completely wrong. Why? Because he fails to ask the key question:

Who are these customers and what the hell are they complaining about?

Customer-centrists like Schultz rarely acknowledge the existence of a creature called “the bad customer.” Anyone who has ever worked as a waiter has probably met more than a few bad customers, and has probably had the urge to throw them out (or worse). Indeed, smart businesses do throw bad customers out and, even smarter, encourage them to patronize their competitors.

Who are these 11 percent and what could they be unhappy about? Consider this possibility…

McD’s Employee: “Welcome to McDonald’s! How may I help you?”

11 Percenter: “Yes, I’d like a Big Mac, cooked medium-rare, without pickles, and double the cheese.”

McD’s Employee: “Uh, sorry sir, all of our Big Macs are prepared the same way.”

11 Percenter: “That’s bullkaka! Then give me a Quarter Pounder, but double the cheese and…”

McD’s Employee: “Uh, sir, all of our food is prepared the same way.”

11 Percenter: “What?! That’s outrageous! It’s the age of the customer, and I’ve got a B.S. degree in customer centricity! I demand to get what I want how I want when I want! Or else — or else — or else I’ll tweet about it!”

He then demands to see the manager, and won’t budge out of line until he does, and when the manager says nothing can be done, he bangs out a steaming email to corporate, which ignores him. He’s thus further dissatisfied, so he posts a music video about his complaint on YouTube in hopes of scoring some gift certificates and maybe a record deal.

Can you imagine some of the other people who might be dissatisfied with McDonald’s?

  • “What do you mean I have to vacate my booth? I’m a paying customer! If I want to sit here for three hours without buying anything more, then I will sit here for three hours without buying anything more! Where’s your manager?”
  • “OMG, this bun has wheat in it! I’m allergic to wheat! Why didn’t you tell me this bun has wheat in it?! I’m so gonna sue… unless you give me $100 right now for my pain and suffering. Where’s your manager?”
  • “Don’t you dare tell me how to raise my kids! If they want to run around screaming and throwing french fries, that’s their First Amendment right! Where’s your manager?”
  • “Why is there a line at lunch? I’m in a hurry. Why aren’t the McRibs ready already? Damn, this place is slow! Where’s your manager?”
  • “Don’t tell me you’re out of apple pies. I come by here every day to get my apple pie, and I always get it! And no, don’t try to push that cherry pie on me. Where’s your manager?”
  • “Damn, you’re cute in that uniform! What time do you get off? And by ‘get off,’ I mean, ‘get off’! Get it? What’s your phone number?”

Any of those could be possible. We don’t know, because the book doesn’t tell us.

The real issue here is that mass-marketing and efficiency are anathema to customer-centrists, who fail to understand that not all businesses can or even should satisfy all of their customers, since trying to please everyone can lead to failure.

McDonald’s has spent more than six decades honing a system that works by emphasizing uniformity and efficiency. Catering to individual requests would either throw that system out of synch or drive up McD’s costs (and prices). And either of those outcomes could cost the company much more than $750 million.

And what’s so bad about the number 11? Is that dissatisfaction percentage unusual for a large business? And what would happen if those 11% went away forever? You know the answer: McDonald’s customer service satisfaction rate would reach 100%.

That’s right: the key to satisfying all of your customers is to make the unsatisfied ones go away.

There’s a reason McDonald’s is “still” a fast-food giant after 60 years, and that it still satisfies an impressive 89% of its customers. How many businesses can claim to do that?

So as you read business books and articles, beware of undercooked statistics and sloppily assembled estimates. Numbers without hard questions are just junk food for the mind.

Tags : , , , , , , , ,

Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches graduate-level marketing communication courses at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.

7 Responses

  1. Great article Freddy! The ‘quantipulation’ tag says it all – academics, just like accountants and other professionals, ‘make the numbers work’ when they have to.

    Freddy’s Comment: Yes. Some of my marketing professors taught “formula marketing,” and if the real world interfered with their formulas, they discarded the evidence.

  2. Alec Baldwin’s Twitter rant about being tossed off an American Airlines flight is becoming a win for the airline because we (the public) strongly suspect Alec is a pompous ass.

    Banks have the same issue. There are customers that will make noise if charged any fee. They want everything for free, and any financial mistake must be the bank’s mistake.

    I agree with the post.

    ~ Jeff

    Freddy’s Comment: Thanks, Jeff. Alec Baldwin is the perfect example of a bad customer. And there are thousands more who don’t get the celebrity coverage, though they demand to be treated like celebrities.

  3. Schultz labels McD’s inability to appease complaining customers as a “marcom inconsistency.” How’s that? What can marcom do to address a complaint besides write a letter? Complaints are almost always service issues.

    Freddy’s Comment: Schultz was referring to McDonald’s slogan, “We love to you see you smile,” which he says creates an “inconsistency [that] resonates with consumers and the McDonald’s brand is damaged.” Of course, that assertion is nonsense. Yes, the company does want to see customers smile, but not if it means bankrupting the company to cater to some misfits. The “inconsistency” applies to a minority of the customers, who may not be worth the effort.

  4. I for one agree with Freddy. In my opinion, McDonalds has already hurt their bottom line by continually expanding their menu in an attempt to appeal to a broader market. In return, the more they offer, the more customers have to complain about. By perfecting and offering a select menu, McDonalds has the ability to appeal to it’s core customers without compromising quality or cost efficiency. A pefect comparison is “In-N-Out.” Here we have a very select menu that emphasizes quality over quantity. As a result, there is seldom a moment where you do not see a line out the door (or drive-through) during peak meal times at ANY location. In such a large competitive industry, trying to appeal to everyone just may leave you with no one in the end. Although I am not a fan of McDonalds myself, they do appear to be doing some things right if they happen to be pleasing 89% of their customers who do not mind filling up on chemically produced beef and machine pressed french fries.

    Freddy’s Comment: In-N-Out Burgers is a great counter example (no pun intended). In low-cost mass-market businesses, do what you do best, and attract the customers that like what you do. Catering to individual tastes is best left to high-margin sit-down restaurants.

  5. Bah… I don’t think the slogan “We Love to See You Smile” becomes a marcom inconsistency if 100% of McD’s customers aren’t smiling. It’d be different if the slogan was “We Make Everyone Smile.”

    The current slogan is fine. The business model is fine. The food… well, that’s another matter :)

    Freddy’s Comment: I agree with you 100% on all counts.

  6. Freddy: I agree with you, too….well, I eighty-nine % agree with you.

    Nearly any marketer succeeds by finding the ideal customer sector: the top-spenders, the most frequent visitors, and now in the age of digital, the top advocates and connectors. Marketing retains those customers, keeps them happy, then finds the one nearest to them (spend a lot but not as frequently, visit frequently but don’t spend much per visit, highly connected but not yet advocates of the McBrand, and so on) and tries to convert them further. McDonald’s does an enviable job of retention of great customers and migration of good ones toward greatness. They’ll McStrive to top the 89% figure, and yet they are what they are.

    But let’s not jump on Schultz too much. His tome is a real primer on IMC. And who amongst us marketers hasn’t fudged a fact to drive home a point? McGuilty on all counts.

    The other portion of 11% where I have to disagree: you can actually get a Big Mac with no pickles, or at least you could back in 19blahblahblah when I worked drive-thru for a year and half as my first real job.

    Thanks for the article: I’m lovin’ (okay, let’s not get carried away)…LIKIN’ it.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.