McDonald's enters next phase of testing a U.S. loyalty program ahead of nationwide launch
- McDonald's has entered the next phase of testing a loyalty program that's slated to launch nationwide later this year.
- Customers will rack up points for every dollar they spend, while McDonald's workers can earn points for completing training related to the program.
- Loyalty programs can drive sales for restaurants by encouraging more frequent visits and allowing them to target customers with personalized promotions.
McDonald's on Wednesday said that it has entered the next phase of testing a U.S. loyalty program before it launches nationwide later this year.
The fast-food giant has successful rewards programs in other countries, like France, but this is the closest it's come to bringing one to its home market. In November, the company began testing in Arizona and Nevada. It added restaurants in New England to the test several weeks ago. As of Wednesday, roughly 900 locations out McDonald's 14,000 U.S. restaurants are part of the test.
Starbucks and Chipotle Mexican Grill are among the restaurant chains that have used rewards programs to grow their base of loyal customers and encourage more frequent visits. Customer data from those programs can also help the company personalize promotions for members and push consumers to stop by restaurants at less busy hours.
Alex Menendez, a Miami-based franchisee, is a member of the operator committee that is overseeing the loyalty program test.
"It's not a secret that we're late in the game to loyalty, but I think from the operator side, we've been wanting to reward our loyal customers for years," Menendez said.
MyMcDonald's Rewards members earn 100 points for every dollar that they spend and have the opportunity to earn even more points with targeted promotions, like double points for visiting on a Monday. The program is split into four tiers — 1,500, 3,000, 4,500 and 6,000 points — for different redemption opportunities across 16 menu items.
Members are able use cash and mobile order and pay to buy their food and rack up rewards. When the program launches nationwide, customers will also be able to pay using credit or debit cards.
Alycia Mason, McDonald's vice president of digital, media and customer relationship management, said that the loyalty program changes up the customer experience in several ways. McDonald's workers will greet loyalty members by name as they move through the drive-thru lane, and customers will get a personalized email after they pick up their orders that includes upcoming deals tailored to them.
"It felt more special and different than my normal McDonald's experience this way," said Mason, who tried the program during a recent trip to Arizona.
But the rewards aren't reserved just for McDonald's customers. Its workers will also have the opportunity to rack up points by completing training related the loyalty program. Menendez said that training employees about digital initiatives was not prioritized in the past, so the franchisees looked for a way to involve their workers with this one.
The loyalty program is one part of the company's new "MyMcDonald's" platform, which ties together its various tech investments, like its app and digital menu boards, and make it easier for customers to order and pay for their food. Like many other restaurant chains, the coronavirus pandemic has led to a surge in McDonald's digital orders, further accelerating the trend that was in place before the crisis.
Shares of McDonald's have fallen 2% over the last 12 months, giving it a market value of $161 billion. While its U.S. restaurants have bounced back from the pandemic relatively quickly, European lockdowns hit fourth-quarter sales.