McDonald’s is the largest Fast-food provider within the Danish IEO market (Informal Eating Out) equipped with a fully utilized and optimized mass communication set-up that brings guests to the restaurants, increase sales and hence revenue from marketing.
Yet, an increasing number of competitors are challenging McDonald’s across the value chain, and while mass media still play a pivotal role, more traction is needed to keep momentum in the marketing driven revenue.
Customer centricity is deeply rooted in McDonald’s corporate DNA and will continue to serve as a guiding star for strategic business development throughout the organization. The everyday unique customer experience serves as the main source for sustainable competitive advantage.
Today, privacy regulations, depreciation of 3rd party cookies and increasing complexity in the marketing industry call for actionable customer data and insights to deliver best-in-class customer service and quality content in customer contact points across owned and paid media.
Companies need to unfold new ways of understanding how customers are engaging with their brand and products throughout the customer journey, with a hawk’s eye on how to deliver relevant and memorable customer experiences that drive loyalty, and hence revenue.
The successful McDonald’s app is well underway as a service design for customers and works as a tool to navigate the new marketing- and commerce paradigm. The app collects a vast amount of 1st party data as it combines games, offers, the loyalty program as well as purchase and ordering features. Connecting the customers with the restaurants both on and off-location.
Now is the time for McDonald’s to implement new path-breaking technologies that enable data driven, hence more relevant customer experiences, which can deliver the sustainable competitive advantage and level up the marketing driven revenue.
The starting point was the app! We wanted to put together a 1st party data strategy by applying Machine Learning and AI to create key insights on customer behaviour and activate data in the day-to-day operations as well as in owned and paid media.
Annalect, OMD and McDonald’s have a long-lasting relationship and a proven track record to extract insights from a data science approach. With over 25 years of experience with handling complex data and enabling data science for clients, Annalect and OMD have developed a CRM insights platform to engage client’s 1st party data and optimize internal CRM communication, corporate strategies, and customized external marketing communication. The engine of the platform is advanced Machine Learning and AI algorithms, which is applied on the 1st party data. Combining the data with algorithms like neural networks and XG Boost, we predict unique customer engagement scores taking all behavioural touchpoints into consideration. With these predictions, Annalect can rank all customers, based on engagement probability, identify behaviour patterns between low- and high-revenue customers and activate customers either based on churn preventing or increased buying frequency strategies.
With the power of unsupervised machine learning algorithms, key segments in the customer base are identified. The identification of these segments of customers take segmentation to the next level by focusing on actual behaviour and not only what the customer think they want. The segmentation enables customization at scale as well as balancing the cost-benefit perspective to deliver more relevant and perceived customer experiences across owned and paid media.
The platform was directly connected to McDonald’s data infrastructure releasing a fully automated setup. The algorithm optimization is conducted through cloud computing and made available in the platform for further exploration and activation by McDonald’s CRM analyst, McDonald’s owned media experts, SOME planner and OMD’s digital planners.
McDonald’s and OMD are now all set to realize prioritized use cases within CRM, automation, and media segmentation.
So far, we have identified 5 key segments in the McDonald’s customer base. The results show up to 25% points difference in the engagement scores across segments. Each segment differentiates significantly in their preferences, communication, and sales per transaction. Results are delivered through a report built by Annalect, providing concrete learnings and recommendations for the optimal day to communicate, offer types, and product preferences with affinity scores linked to each customer ID. In extension the results are also available in the platform and create new opportunities for optimizing digital media buying in the day-to-day work between OMD and McDonald’s.
To activate and implement the insights, Annalect has made the workstream as frictionless as possible for everyone involved, from the CRM Analyst, owned media experts to the digital planner, when booking campaigns and building CRM journeys. The CRM insights platform contains an Audience Builder tool, containing all the 1st party data together with the predicted engagement scores and segmentation allocations. In this platform the analysts and planners can drill down on the results to increase understanding and build their own audiences for further activation.
Once the segments have been built, the planner can choose the media platforms e.g., META, and with the push on a single button, the audience is automatically sent and is now available in META as a custom audience. In META, the planner simply chooses the custom audience and add the standard campaign information, and potentially also use the twinning algorithms in META to further target new customers. The CRM insights platform will automatically ensure that only customers, who have given the necessary consent are being activated. Furthermore, no GDPR data will be saved in a nonsecure location, making this activation GDPR compliant and user-friendly at the same time.