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The widespread adoption of mobile apps and digital technology has enabled businesses to expand their reach and tap into new markets by leveraging the benefits of online platforms. The development of mobile apps has opened up a wealth of new opportunities for businesses to expand their reach and visibility in the digital space, and the food and beverage industries are certainly not exempt from these benefits.
In this article, we will compare and contrast the digital marketing strategies of two major players, McDonald’s and Starbucks, to gain insights into how these successful industries utilize digital technology to optimize their loyalty programs and establish an unshakable global position.
Out-of-the-Box Thinking: The Driving Force Behind Innovation
McDonald’s has been renowned for its core principle of customer centricity since its inception. The latest data shows that in 2022, there was a notable increase of 10.9% in full-year comparable sales, along with a robust performance in guest count resulting in a global growth of 5%. Moreover, the loyalty program had approximately 50 million active customers by the end of the year. Through its classic menu items and innovative marketing strategies, McDonald’s has consistently demonstrated its commitment to putting the customer at the heart of its business model.
Starbucks, as the behemoth in the beverage industry, has also presented its strong financial performance, characterized by a steady increase in revenue each year. Besides, More than 28.7 million active members have involved in Starbucks’ loyalty program at the end of 2022. It has exhibited a steadfast dedication to the continuous development of novel, premium beverages that align with the ever-evolving preferences of its customers while also providing tailored experiences.
Despite the significant impact of the COVID-19 pandemic on both industries, their performance has demonstrated a notable recovery since 2021.
1. Personality On Display
McDonald’s has solidified its position as a high-end player in the digital space, thanks to its witty and humorous social media persona that resonates with users. Upon clicking into its Twitter and Instagram accounts, you’ll be greeted with a vibrant and cheerful digital environment that is sure to leave you feeling uplifted. Through integrating a large number of memes and the latest pop culture trends, McDonald’s has maintained a strong presence on social media and continues to connect with younger generations in a fun and engaging way.
Starbucks adopted a completely different style regarding product promotion and user engagement. It creates aesthetic, refreshing, and visually stunning content that emphasizes its high quality and appetizing products, specifically focusing on community engagement that fosters the sense of belonging that has become a hallmark of the Starbucks experience. Besides, Starbucks utilizes social media as an informative platform to express its brand values, particularly concerning social responsibility and sustainability, fostering deeper connections with customers who prioritize these values. By doing so, Starbucks has consolidated its position as a leading company in the coffee industry, appealing to an increasingly socially conscious consumer market that values ethical and sustainable business practices.
2. Connected Customers, Connected Loyalty
McDonald’s and Starbucks adopted an omnichannel approach to their loyalty programs, which is a wise move to drive customer loyalty. They enable customers to redeem rewards in-store and through various channels such as mobile apps, websites, and other platforms.
MyMcdonald’s Rewards v.s. Starbucks Rewards
Types of Loyalty Program
McDonald’s: A simple and direct point-based loyalty system that offers customers a straightforward and flexible way to earn and redeem rewards
Starbucks: A tiered system that categorizes customers into different levels based on the stars they earn, motivates customers to increase their spending to progress to higher tiers and unlock more rewards
Audience
McDonald’s: More diverse demographics
Starbucks: Mostly millennial generation; “More than half our US customer base is Gen Z and Millennials reflecting relevancy and brand love across generational cohorts, trends we see with diverse customer cohorts as well,” said by Sara Trilling during the Q422 Earning Calls.
With nowadays’ technological advancement and the heavy blow brought by the pandemic, McDonald’s strives to optimize the personalized experience using AI technology through one of its iconic features—Drive Thru. The Drive-Thru has evolved beyond its original purpose of reducing labor costs. Today, it offers a more personalized and humanized experience, with the ability to recommend products based on factors such as time of day, weather, and popular demand. With the assistance of AI technology, McDonald’s has been able to streamline operations, fulfill customer satisfaction, and most importantly, maximize profits by serving a large number of customers.
When it comes to personalized services, one cannot help but mention Starbucks, a winner who brings the effectiveness of customer data into play. It offers customers an extensive range of flexible options for personalizing their drinks. On the one hand, it satisfies the customers’ desire for unique drinks and increases their likelihood of marking future purchases. On the other hand, collecting these customer data allows Starbucks to understand customer preferences and purchase behavior that can be used to improve personalized recommendations to attract and retain more customers. Many businesses overlook the importance of making customers feel valued and appreciated, but Starbucks sets itself apart from competitors by prioritizing this aspect of the customer experience.
To put it simply, McDonald’s loyalty system is designed to prioritize a speedy and accurate operation, align with the fundamental principles of the fast-food industry; while Starbucks attaches greater importance to providing an exclusive experience that fosters a sense of belonging to the brand.
3. Winning the Game of Dining
McDonald’s has been incorporating gamification elements into its loyalty program since the late 1980s. Despite the current era of technological advancement, McDonald’s has consistently been adopting offline gamification promotions to engage customers. McDonald’s UK recently initiated a new promotional campaign—the Winning Sips game. Customers will have to purchase any medium or large soft drink and peel off the stickers on the cup to see if they have won a prize. It can be an instant win or a code that can be entered into your app, where you can win cash, food and drink, or limited-edition merchandise for the prize. In short, McDonald’s primarily uses gamification in an offline mode but distributes prizes through the mobile app. It places greater emphasis on increasing short-term profitability by establishing relatively shorter promotion periods.
Starbucks also incorporates traditional gamification elements, such as bingo and puzzles, into its loyalty program. Their primary focus on online gamification promotions over offline ones maximizes the use of their mobile app. One key point that sets it apart from McDonald’s is the purpose of its gamification. While businesses are primarily focused on driving sales, Starbucks has made a concerted effort to integrate its brand concept into gamification initiatives that are both educational and meaningful, such as the Earth Month Game that allows people to earn drinks by playing a puzzle game that promote the idea of environmental protection. By implementing these initiatives, Starbucks not only creates a more engaging and rewarding experience for its customers, but also promotes its values, which helps to strengthen and consolidate its customer base loyalty.
Reexamination of a Successful Loyalty Program
McDonald’s and Starbucks’ success in loyalty programs reflects the growing importance of customer loyalty and personalized experiences in today’s business landscape, which serves as evidence of the power of customer-centric strategies in driving business growth and success. So, are you ready to unlock the full potential of your business? Start create your free account on Shopuddy today!
