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McDonald’s is a brand that engenders as much criticism as it does love. Over the years, it’s gathered more than a few negative headlines. From the ‘McLibel’ case in the 1990s, when it took two environmental activists to court, to – in the past few months – the first strikes by UK staff over zero-hours contracts and conditions; these are not the stories big brands covet. 

But alongside the media storms has been the business success, not least after Briton Steve Easterbrook took over as CEO in 2015. McDonald’s has enjoyed 45 consecutive quarters of sales growth in the UK, and a distinct sharpening of its global business strategy. 

In interviews, Easterbrook has cited a number of factors in its improved performance, including: investing in the menu; refocusing on its ‘value’ proposition; and making sure improvements – be they in staff, service or interiors – are evident to customers. 

Since the McLibel debacle, McDonald’s has adopted a strategy of being more transparent – and this was before transparency became the go-to business buzzword – in a bid to take on its critics. From its campaign to address the repeatedly peddled rumours of shocking farming and food preparation practices to its swift retraction of the ‘Dead Dad’ ad after criticism that it exploited child bereavement, there is an honesty to the company’s approach. 

Victoria Hodson, McDonald’s vice-president, business strategy and insight, acknowledges that a change of focus was required and that the company was “in a very difficult position” in 2005. 

“Trust was very low and some big decisions were made at that time that have set the bedrock for where we are now. It’s one of the reasons I was attracted to working here,” she explains. 

Part of that, says Hodson, was making changes to its supply chain. She cites the dividends this paid during the horsemeat scandal that hit the UK food industry in 2013. While many big-name food companies found their products, and reputations, tarnished, McDonald’s was one of only two firms to be named as upholding best practice thanks to its long-standing relationships with suppliers. 

One of the biggest appeals for Hodson, however – and something she’s carried on since joining McDonald’s in 2013 – was “the fact that the customer sits at the heart of everything”.

“It’s fundamental. To be able to sit round the executive team table and to influence every conversation, every decision that’s made. It demonstrates how important the customer is to McDonald’s, to its decisions and strategy.”

The fact that business strategy and insight are under Hodson’s remit is promising in itself. As well as having responsibility for consumer insight – which looks at everything from long-term reputation tracking, product development and customer experience – she has business performance to consider, too. The business insight team looks at sales forecasting and works with marketing on understanding promotions and campaigns to help with planning.

Hodson says head office is a lean outfit with a small core team that draws on external agencies, which often involves outside personnel coming to work at McDonald’s on secondment. She thinks the company’s habit of maintaining long-term relationships with suppliers is as valuable in marketing services as it proved to be on the food side of the business.

“Franchisees have to sign up for 20 years – nobody’s in it to make a quick buck, everyone’s in it for the long term. So it gives us a chance to work with our longer-term agencies on some bigger, more exciting, more unusual projects, which perhaps would be risky with a new agency,” she explains.

That said, one of Hodson’s recent objectives for her team is to be open to new agencies, and to make sure they are constantly innovating and looking at new methodologies. 

McDonald’s transparency won’t stretch to Hodson discussing which agencies she works with, however, and she prefers to focus on the work they, and the insight team, have done that has influenced the business.

Home delivery

One of the most significant recent changes has been the introduction of McDelivery – its home-delivery service through UberEats, which has been available at selected UK restaurants since June. Easterbrook had cited delivery as one of McDonald’s ‘key accelerators’ – and, with 75% of the population in its top markets living within three miles of a McDonald’s, it’s easy to see why extending its service to home delivery had the potential to boost the business. Especially as people, typically, spend between one and a half and two times as much on deliveries as they do in a restaurant.

Hodson says finding the right partner was crucial with home delivery. “It’s something our customers have been asking for, at least as long as I’ve worked here. For us, it was about when the time was right and finding the right partner to do it properly – speed is really important,” she says. “We’re piloting it in 150 restaurants at the moment; that’s where we learn all our operational glitches. What goes right, what goes wrong, and how we iron those out. It’s going really well and customers love it.”

McDelivery is just one of several new services the fast-food chain has introduced, all of which have been a direct result of research into what customers want from the brand. 

For instance, its mobile ordering app – now available in 250 of its restaurants – means customers can order at their table or at home, and the order is only activated once they scan a code at a digital checkpoint in-store. 

This ties in with the company’s ‘experience of the future’ strategy, a major operational change to update its restaurants and transform customers’ experience of McDonald’s. Behind the scenes, changes to its kitchens have meant McDonald’s can personalise items on its menu, allowing people to add or remove ingredients. 

Meanwhile, in the redesigned restaurants – 850 of its 1,275 have been converted so far – large digital ordering screens, which it refers to as kiosks, mean customers can take their time browsing the menu and ordering. 

Hodson points out that qual research was vital in developing these changes – not only in determining what customers wanted, but also in the finer details during the pilot programme. 

“The way we developed our new restaurants – with kiosks, the new order and collection points, table service – was that we had the idea, we did lots of qual studies, then we started piloting,” she explains. “This is the way we often roll things out. We then did lots more studies in the restaurant; we watched people go through [the ordering process] and looked at where they’d get stuck.” As a result, it could adapt the interface on the kiosk screens. 

Menu selection

One of the most significant consequences of giving people a different method of ordering has been its impact on the food choices that they make. Previously, with space limited above the tills, the entire menu wasn’t easy to access quickly.

“It’s started to shift consumer behaviour toward our healthier options,” says Hodson. “Often, people come into McDonald’s because they haven’t got much time – so what do you do when you’re pressured for time? You opt for your usual. One of the greatest things that customers tell us about these [kiosks] is, ‘I’m not pressured about that decision and I’ve got the time to choose’.” 

For instance, Hodson says, more Happy Meals are being bought with carrot sticks and fruit bags, while sales of salads have risen and wraps are doing well. But ongoing tracking is vital to identify when radical changes such as this are needed, and to monitor their success. 

This year, Hodson introduced a new customer-satisfaction tool, called Food for Thoughts. Customers complete an online survey after visiting a restaurant to give feedback on their experience. “It’s a very simple question to start with and, then – every tenth person – we’ll deep dive into different parts of the experience or parts of the meal,” she says. 

“What we don’t want is someone stuck on their phone for 20 minutes when they’ve only spent five minutes in the restaurant. It’s not the right ratio of effort to output. If somebody hasn’t marked us very well, we will follow up and ask them more questions.”

The responses are mainly used by restaurant managers to improve their customer experience, rather than at a business level. “Each restaurant has its own quirks of where service doesn’t always go well. If you aggregate it up and then try to performance manage people against those aggregate scores, it doesn’t make sense,” Hodson explains.

McDonald’s has succeeded in treading a fine line between global uniformity and recognising local market requirements. So, while its core menu means travellers in far-off countries can visit a McDonald’s and be safe in the knowledge that they’ll recognise the menu, it also has regional tweaks to meet local sensibilities. 

A recent addition to the menu is a direct result of customer research. While burger restaurants have grown in popularity in the UK, much of the expansion has been at the gourmet end of the market. This trend has led to McDonald’s introducing its premium Signature Collection, consisting of a thicker burger in a brioche-style bun.

Hodson says: “That was properly starting with a blank piece of paper and customers in a room, talking to them about great food. We talked, specifically, about beef and what constitutes a wonderful beef sandwich. Then we went to concept testing. 

“We used research in a different way there, to refine what that might look like. The thicker beef patty was the real constant that customers kept telling us about. Eventually, we came to what we have now – which is a brioche bun and quality ingredients.” 

The collection was piloted for almost two years before the company decided to expand it, and it’s now available in about half of McDonald’s restaurants. 

While Hodson acknowledges that the company “doesn’t always get it right”, she says it does respond to customer feedback and looks at what it can do to improve. Every year it conducts a strategic review to look at the bigger picture – what the influences are; the operating environment; the economic situation; the political situation; and so on.

“We’ll look at all of those aspects each year, to make sure we’re still pointed in the right direction,” she says. “We will adapt our strategy if we need to – if some of those things are no longer right, or some are now right, such as delivery. 

“We look at trends – are they definitely trends, or just fads? We’ll use research and insight to help us with that, and then we’ll use some good old-fashioned business common sense.” 

FACT FILE

■ In 1940, Richard and Maurice McDonald opened a barbecue restaurant in San Bernardino, California

■ The first franchise, using the arches logo, opened in Phoenix, Arizona, in 1953

■ Ray Kroc joined the business in 1955 and bought the chain from the McDonald brothers

■ It now has 34,000 restaurants worldwide, and employs 1.8m people

■ It opened its first UK restaurant in Woolwich, London, in 1974

■ In the UK, it has 1,200 restaurants, employing 97,000 people

■ About 70% of its UK restaurants are franchises

■ More than half ( 55%) of its ingredients come from 17,500 British and Irish farms.

Good to know

Research showed that some people were questioning how food at McDonald’s is made, with misinformation circulating about what happens to ingredients between leaving the farm and being served in the restaurants. Social media ensured these myths gained currency among young people. 

So, in May 2015, the company launched an integrated campaign platform called ‘Good to Know’. Through broadcast – and Leo Burnett’s ‘The Cow’ TV ad – it started by challenging the common assumption that McDonald’s burgers aren’t made with 100% beef. Further executions looked at 100% British potato fries and McNuggets. 

It also worked with YouTubers, inviting them behind the scenes of its supply chain and restaurants, to ask suppliers – and employees – questions on behalf of their fans, and then post videos on their findings. In the second half of 2016, more than three million young adults watched this YouTube content. 

In an effort to reach parent influencers, the company worked with Barry Lewis from Jamie Oliver’s FoodTube network. He recorded a behind-the-scenes video designed to reassure parents about what goes into the food. 

The company attributes the Good to Know approach to its improved food-quality metrics: ‘Good food quality’ has reached its highest ever level (from 35% to 46%); ‘Top-quality ingredients’ (from 33% to 45%); ‘Food I feel good about eating regularly’ ( 27% to 37%); and ‘Nutritious food’ ( 26% to 36%) – all scores from Q4 2014 to Q4 2016.