Loyalty efforts underway at McD's

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Both DDB Needham Worldwide and Leo Burnett USA pitched McDonald's Corp. on loyalty programs during the just-concluded creative shoot-out, but the fast-feeder has been testing two of its own.

In Dallas, the company has been testing a program called McBreak that rewards consumers with points for buying its food. For every dollar spent, the consumer earns a point; when 25 points are racked up, for example, the customer gets free hash browns.

McBreak has now moved into 300 stores in Dallas, Santa Barbara, Calif., and Hawaii, and McDonald's plans to expand it into other markets it won't disclose.


The other loyalty effort is running only in units adjacent to Amoco gasoline stations in Chicago.

Called the Break Card, the procedure is similar, except consumers must redeem and update their cards in the same store in which they received it.

"The trick with loyalty programs is to generate same-store sales gains," said Chain Leader Senior Editor Bill McDowell. "McDonald's franchisees' sales are falling apart because so many new McDonald's are being built, and the battle is being fought at the local-market level."

But the loyalty program, said Mr. McDowell, can be ineffective unless franchisees manage it properly by keeping accurate databases for future marketing endeavors.

"A lot of them are just filling out the cards," he said. "It's just one more record-keeping, administrative hassle for them."

Copyright August 1997, Crain Communications Inc.

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