CRM Practices of McDonalds
CRM Practices of McDonalds
CRM Practices of McDonalds
Submitted to
Dr. Sheena K
Submitted by
FK-3403 Ajay Vincent
FK-3417 Anirudh V
FK-3372 Arun Mohan
FK-3320 Zahra Ahammed
INTRODUCTION
McDonald’s is the world's largest restaurant chain by revenue, serving over 69 million customers
daily in over 100 countries across 37,855 outlets as of 2018. Although McDonald’s is best known
for its hamburgers, cheeseburgers and french fries, they feature chicken products, breakfast items,
soft drinks, milkshakes, wraps, and desserts. In response to changing consumer tastes and a
negative backlash because of the unhealthiness of their food, the company has added to its menu
salads, fish, smoothies, and fruit. The McDonald’s Corporation revenues come from the rent,
royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants.
According to two reports published in 2018, McDonald’s is the world's second-largest private
employer with 1.7 million employees (behind Walmart with 2.3 million employees).As of 2020,
McDonald’s has the ninth-highest global brand valuation.
McDonald’s restaurants are found in 120 countries and territories around the world and serve 68
million customers each day. McDonald’s operates 37,855 restaurants worldwide, employing more
than 210,000 people as of the end of 2018. There are a total of 2,770 company-owned locations
and 35,085 franchised locations, which includes 21,685 locations franchised to conventional
franchisees, 7,225 locations licensed to developmental licensees, and 6,175 locations licensed to
foreign affiliates.
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Focusing on its core brand, McDonald’s began divesting itself of other chains it had acquired
during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October
2006, when McDonald’s fully divested from Chipotle through a stock exchange. Until December
2003, it owned Donatos Pizza, and it owned a small share of Aroma Café from 1999 to 2001. On
August 27, 2007, McDonald’s sold Boston.
McDonald’s brand mission is to be our customers' favorite place and way to eat and drink. Our
worldwide operations are aligned around a global strategy called the Plan to Win, which center on an
exceptional customer experience – People, Products, Place, Price and Promotion. We are committed
to continuously improving our operations and enhancing our customers' experience.
To move with velocity to drive profitable growth and become an even better McDonald’s serving
more customers delicious food each day around the world.
As a result of the COVID-19 pandemic, McDonald’s closed most seating and all play areas in its
United States restaurants. It transitioned to drive-thru and curbside orders at locations and online food
ordering delivery services.
Restaurants in a number of countries including France, Italy, Spain, the United Kingdom and Republic
of Ireland were temporarily closed. Some of these closed restaurants have now reopened for drive-
thru/delivery service only with menu limitations and spend caps. In other countries including
Australia, Germany and Canada restaurants did not close but were limited to providing drive-thru,
takeaway or delivery only.
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The re-opening of McDonald’s restaurants for drive-thru in the United Kingdom generated significant
queues of traffic throughout the country.
McDonald’s restaurants in West and South India through its wholly-owned subsidiary, has launched
contactless delivery service to deliver food to the customers’ doorstep. McDonald’s India is ensuring
that food reaches customers without being touched by bare hands and delivered safely with adequate
social distancing measures.
McDonald’s have doubled up the safety and hygiene processes at their restaurants. The crew member
who assembles the food, the one who packs food and the runner do not touch the food with bare hands
and take all possible precautions to ensure hygiene. The packets are sealed and delivered by a runner
who drops the order at a pre-appointed spot outside the customer's door and then watches from a safe
distance while they retrieve their order and go back inside.
One important aspect of the CRM approach is the systems of CRM compile data from a range of
different communication channels, including a company's website, telephone, email, live chat,
marketing materials and more recently, social media. Through the CRM approach and the systems
used to facilitate it, businesses learn more about their target audiences and how to best cater for
their needs.
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Importance of Customer Relationship Management in an Organization
● A CRM system consists of a historical view and analysis of all the acquired or to be
acquired customers. This helps in reduced searching and correlating customers and to
foresee customer needs effectively and increase business.
● CRM contains each and every bit of details of a customer, hence it is very easy for track a
customer accordingly and can be used to determine which customer can be profitable and
which not.
● In CRM system, customers are grouped according to different aspects according to the type
of business they do or according to physical location and are allocated to different customer
managers often called as account managers. This helps in focusing and concentrating on
each and every customer separately.
● A CRM system is not only used to deal with the existing customers but is also useful in
acquiring new customers. The process first starts with identifying a customer and
maintaining all the corresponding details into the CRM system which is also called an
‘Opportunity of Business’. The Sales and Field representatives then try getting business
out of these customers by sophistically following up with them and converting them into a
winning deal. All this is very easily and efficiently done by an integrated CRM system.
● The strongest aspect of Customer Relationship Management is that it is very cost-effective.
The advantage of decently implemented CRM system is that there is very less need of paper
and manual work which requires lesser staff to manage and lesser resources to deal with.
The technologies used in implementing a CRM system are also very cheap and smooth as
compared to the traditional way of business.
● All the details in CRM system is kept centralized which is available anytime on fingertips.
This reduces the process time and increases productivity.
● Efficiently dealing with all the customers and providing them what they actually need
increases the customer satisfaction. This increases the chance of getting more business
which ultimately enhances turnover and profit.
● If the customer is satisfied they will always be loyal to you and will remain in business
forever resulting in increasing customer base and ultimately enhancing net growth of
business.
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Effects On Customer Satisfaction
Customer satisfaction has important implications for the economic performance of firms because
it has the ability to increase customer loyalty and usage behavior and reduce customer complaints
and the likelihood of customer defection. The implementation of a CRM approach is likely to have
an effect on customer satisfaction and customer knowledge for a variety of different reasons.
Firstly, firms are able to customize their offerings for each customer. By accumulating information
across customer interactions and processing this information to discover hidden patterns, CRM
applications help firms customize their offerings to suit the individual tastes of their customers.
This customization enhances the perceived quality of products and services from a customer's
viewpoint, and because perceived quality is a determinant of customer satisfaction, it follows that
CRM applications indirectly affect customer satisfaction. CRM applications also enable firms to
provide timely, accurate processing of customer orders and requests and the ongoing management
of customer accounts. Furthermore, CRM applications also help firms manage customer
relationships more effectively across the stages of relationship initiation, maintenance, and
termination.
Customer Benefits
With Customer relationship management systems, customers are served better on a day to day
process. With more reliable information, their demand for self-service from companies will
decrease. If there is less need to interact with the company for different problems, customer
satisfaction level increases. These central benefits of CRM will be connected hypothetically to the
three kinds of equity that are relationship, value, and brand, and in the end to customer equity.
In 2012, after reviewing the previous studies, someone selected some of those benefits which are
more significant in customer's satisfaction and summarized them into the following cases:
● Improve customer services: In general, customers would have some questions, concerns
or requests. CRM services provide the ability to a company for producing, allocating and
managing requests or something made by customers. For example, call center software,
which helps to connect a customer to the manager or person who can best assist them with
their existing problem, is one of the CRM abilities that can be implemented to increase
efficiency.
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● Increased personalized service or one-to-one service: Personalizing customer service or
one-to-one service provides companies to improve understanding and gaining knowledge
of the customers and also to have better knowledge about their customers' preferences,
requirements and demands.
● Responsive to customer's needs: Customers' situations and needs can be understood by
the firms focusing on customer needs and requirements.
● Customer segmentation: In CRM, segmentation is used to categorize customers,
according to some similarity, such as industry, job or some other characteristics, into
similar groups. Although these characteristics can be one or more attributes. It can be
defined as subdividing the customers based on already known good discriminators.
● Improve customization of marketing: Meaning of customization of marketing is that the
firm or organization adapts and changes its services or products based on presenting a
different and unique product or service for each customer. With the purpose of ensuring
that customer needs and requirements are met Customization is used by the organization.
Companies can put investment in information from customers and then customize their
products or services to maintain customer interests.
● Multichannel integration: Multichannel integration shows the point of co-creation of
customer value in CRM. On the other hand, a company's skill to perform multichannel
integration successfully is heavily dependent on the organization's ability getting together
customer information from all channels and incorporate it with other related information.
● Time saving: CRM will let companies to interact with customers more frequently, by
personalized message and communication way which can be produced rapidly and
matched on a timely basis, and finally they can better understand their customers and
therefore look forward to their needs.
● Improve customer knowledge: Firms can make and improve products and services
through the information from tracking (e.g. via website tracking) customer behavior to
customer tastes and needs. CRM could contribute to a competitive advantage in improving
firm's ability of customer information collecting to customize products and services
according to customer needs.
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CRM PRACTICES FOLLOWED BY MCDONALD’S
● Each outlet is headed by a restaurant manager. He is responsible for the daily operation
and customer interaction.
● Delivery crew members carry basic operation of a restaurant. They ensure customer
satisfaction at the restaurants.
● In order to motivate their employees, McDonalds give them stars as per their performance.
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● All the upcoming product and related information are posted on their website-
www.McDonald’s.com
● Special promotions during festivals as Indians tend to spend more at such events.
● Complimentary drinks with every late order delivery after 1 minute.
● McDonald’s India provides fast friendly service – the hallmark of McDonald’s that sets its
restaurants apart from others.
● McDonald’s restaurants provide a clean, comfortable environment especially suited for
families.
● McDonald’s menu is priced at a value that the largest segment of the Indian consumers can
afford.
● McDonald’s does not sacrifice quality for value- rather McDonald’s leverages economies
to minimize costs while maximizing value to customers.
● The main effort of McDonald’s service is to make customers the whole sole beneficiary
through its stringent standards maintained all over the world.
The PowerCentre software brings in data from throughout the company and includes both
positive and negative reviews. Being able to assess restaurants by region, or even individual
restaurants, means that McDonald’s can quickly spot potential customer relationship issues
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and resolve them before they become a serious problem. Information is passed through the
company quickly, providing key results.
There are several reasons why Astute Solutions were chosen to be the providers of
McDonald’s CRM services. Firstly, McDonald’s started looking for a service provider with
a concrete set of goals. They wished to extend the capacity for data capture from customers
and have software which could provide both McDonald’s corporate services and individual
franchises with access to real-time customer information.
They also wanted to be able to integrate their existing database into an effective CRM tool
without the software becoming bloated or manageable. In addition to this’ they also wanted
software which was flexible and functional to provide support for their evolving needs as
a business.
As a part of its digital transformation McDonald’s is now investing in technology and using digital
innovations to meet its goal of moving from mass marketing to mass personalization. The company
is looking at increasing its one to one interaction with customers and the loyalty program will act
as an enabler for this goal.
McDonald’s uses the data to understand customer behavior and preferences and lure customers
back into restaurants if they have been absent for a while. The company believes that its loyalty
program will be the future of its customer relationship management and can be a significant sales
generator for McDonald’s. As the company works on its turnaround strategy, it benefits in three
major ways through its loyalty program:
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➢ Build a strong relationship with its customers and have better data to gather insights on
customer behavior and preferences.
➢ Compete better with players, such as Starbucks and Dunkin Donuts, who already have
loyalty programs running.
➢ Increase sales and encourage repeat visits.
McDonald’s technology initiatives and the loyalty program helps the company to build stronger
relationships with its customers and improve its offerings through customer feedback. In the long
term, these initiatives will translate into higher sales for the company.
● McDonald’s App
McDonald’s Focuses on Attracting Local Customers with Mobile App. The McDonald’s
app brings unique offers that are customized for their customers. Based on the customer's
past orders, it puts together all their favorites in different combos at unbelievable prices.
All they have to do is step into the nearest McDonald’s store which the app will help them
locate, open the app to choose their favorite offer, and redeem it within ten minutes.
It offers mouth-watering breakfast offers for its customers. All the customers need to do is
place an order of Rs. 100 during the breakfast hours and get his or her card stamped on
every visit to avail exciting offers.
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➢ On the fifth visit get fresh Brew coffee/tea.
➢ On the sixth visit get free veg supreme/ chicken sausage mc muffin with egg.
It’s a loyalty program that operates in the west and south regions of India. Customers can
earn McGold Points when the customer places an order either through McDelivery website
or app and use these points to pay for their next meal. A customer who places an order that
exceeds Rs. 649 on McDelivery app/web store can get 30% McGold which can be
redeemed 3 times per user.
Happy, loyal employees are inherently beneficial to customer experience strategy. Their
happiness will lead to more pleasant interactions with customers – and with other
employees. Their loyalty meant employees stayed longer, so they have a greater ability for
product and process knowledge.
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McDonald’s is also training its employees to make the most of those extra seconds. By
educating them on the products, they have improved their ability to suggestively sell and
upsell other products. McDonald’s empowers employees to maximize the revenue
associated with each interaction.
Customer value proposition is a business's way of generating value in their product or service when
targeting potential customers. McDonald’s conducts its CRM activities to maximize and improve
the value that their customers experience at their stores.
● Convenient locations
● Comfort seating and in-store facilities
● Consistent quality menu items
● Distinct and unique products
● Good value offering and pricing structure
● Food choices for all ages
McDonald’s in their overall value proposition , have a number of distinct benefits over their key
competitors . The main importance of value proposition is to give consumers a reason to come
back to your store .
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a calculation that is used for business growth and intelligence that informs you of the value of each
customer. This value is a critical indicator used to indicate the value of your company.
McDonald’s focus on cross-selling and up-selling based on customer likes and dislikes to improve
and extend the customer lifecycle value .Traditionally, cross-selling is the act of selling
supplementary products or services when a customer purchases a product. Up-selling is defined as
the act of offering a more expensive product to a customer in the place of the one they are trying
to purchase. The most common example of this is “super-sizing” a meal at McDonald’s. In the
realm of customer personalization, up-selling and cross-selling are actually very easy to achieve
mainly because existing customers have a larger amount of data in company databases. As a result,
McDonald’s is able to see the transaction history of specific customers and offer additional
products that are relevant or offer a higher quality brand or product with more features than what
they are buying.
While McDonald’s earlier stood for standardized meals at a reasonable cost, it now also offers
‘gourmet’ food like muffins , cookies etc. that customers can enjoy . With its McCafé banner, it
aspires to bring the typical quick coffee house to customers , complete with a range of sweet
accompaniments. While 2018 was the first profitable year for McD India with discounted combos
and presence in high footfall markets (like malls) being the driving factors, the arrival of McCafé
was a game-changer in itself. Constructing a special counter just for coffee and limited beverages
has achieved two goals with a single shot. McCafé was a good move to extend customer lifetime
value as Indians consume tea and coffee a lot on a regular basis.
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cup of McCafé’s freshly brewed coffee. And this is why – though McD continues to be a great
brand for budget meals and a once-in-a-while junk food restaurant, it now also attracts people far
beyond its initial target audience. A family outing is now complete where a young kid enjoys his
burger, while the parent sips on a Flat White.
The fast-food giant has claimed that a McCafé will be a part of every McDonalds’ in India by
2022. A country like India where coffee use is on the rise and stores like Starbucks is expensive,
McDonald’s provide good value to customers.
McDonald’s Corp on had reported a bigger-than-expected drop in global same-store sales as the
burger chain's restaurants across the world were shut because of the COVID-19 pandemic, limiting
operations to only drive-thru and delivery.
Restaurants have been struggling to cope with the changing dynamics and consumer behaviors
around the health crisis, forcing them to simplify menus and shift largely to online and mobile
orders for pickup, delivery and drive-thru.
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VALUE EXPERIENCE IN THREE DIFFERENT PERSPECTIVES
1) Value - in -use
It is the want satisfying power of a commodity. The satisfaction which one obtains from the use
of a commodity is known as the value-in-use. It is the exchange of one form of value for another.
At McDonald’s , many of the customers mentioned that they experienced immense value at
McDonald’s as they provide standard quality food which is tasty and fulfilling. Most of the
customers who are of the age 22-30 are highly interested in this value provided by McDonald’s.
Customers mentioned that the burgers, fries and beverages served are always of top quality and
taste never differs . Customers at Aluva metro McDonald’s with McCafé were highly satisfied
with the value provided by McDonald’s in the form of good and standardized coffee , tea , burgers
etc. which they can grab fast and conveniently as they depart to or arrive from the metro ride .
2) Value - in - exchange
It is the amount of goods and services which we may obtain in the market in exchange of a
particular thing . When considering the case of McDonald’s the value in exchange is the form of
money being exchanged for the food and beverages. Customers of McDonald’s in most foreign
countries experience immense value in the form of getting food for low price considering
restaurants . In the case of India, McDonald’s pricing and value of exchange is comparable to some
expensive restaurants. The value received by customers considering the money they pay is less in
India and especially in the low income available areas. Most customers who have experienced
McDonald’s in foreign countries , International airports, Tourist destinations etc. have said that
the amount and quality of food they receive for the money paid is what they value the most.
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3) Value in experience
It is the value experienced by customers as they interact with or exposed to marketing , sales or
service output of the organization. Customer experience is the outcome of all the interactions at an
organization , thus the interactions are what provides customers the value experience. Good
interaction is key to providing customers with a good experience and value proposition
.McDonald’s over the years have given a lot of attention for the design of usable and user-friendly
website experiences, store locations and encounters. Customers at McDonald’s store ate Lulu Mall
Kochi responded to this value the most. The ambience , choices , customer friendliness, service
aspect etc. at Lulu is similar to most foreign McDonald’s and people highly value it . Most young
customers at McDonald’s value mostly the experience they receive while purchasing and eating at
the store with the ambience. The experience provided by the seating area with Ronald McDonald’s
statue at Lulu provides people with the same experience that McDonald’s provides in foreign
countries.
● Currently McDonald’s offers home delivery via food delivery apps like Swiggy, Zomato
etc. McDonald’s must introduce their own home delivery service in nearby areas for
delivery over a certain amount limit.
● No service charge on takeaway orders.
● McDonald’s must introduce some more traditional flavors in different regions of India.
● McDonald’s should continue to invest in menu customization and menu standardization
strategies to attract and connect with target customers in diverse geographical markets.
● McDonald’s should be more focused on serving healthy food items since consumers are
becoming more health conscious.
● McDonald’s should devise digital marketing strategies to engage with the online customer
base.
CONCLUSION
McDonald’s is the world's largest restaurant chain by revenue, serving over 69 million customers
daily in over 100 countries across 37,855 outlets . McDonald’s restaurants are found in 120
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countries and territories around the world and serve 68 million customers each day. McDonald’s
operates 37,855 restaurants worldwide, employing more than 210,000 people .Customer
relationship management (CRM) is the process of managing interactions with existing as well as
past and potential customers. It is one of many different approaches that allow a company to
manage and analyze its own interactions with its past, current and potential customers. Customer
satisfaction has important implications for the economic performance of firms because it has the
ability to increase customer loyalty and usage behavior and reduce customer complaints and the
likelihood of customer defection. McDonald’s uses CRM in order to make sure that there is
constant and orderly customer relationship across all their restaurants. McDonald’s follow many
CRM initiated across different countries and also make use of many softwares to implement their
CRM across all their restaurants. The CRM initiatives , practices , procedures etc. has helped
McDonald’s to stand out from the crowd of many fast food restaurants and become a valuable and
respected player in the industry. The organization provides good value to the customer such that
they are happy to come back and become loyal customers of the restaurant .The CRM practices ,
initiatives and procedures at McDonald’s are highly effective and provides lot of benefits to both
customers and the company alike .McDonald’s continuously strive to make their products and
services in a way that they provide better value to the customers.
BIBLIOGRAPHY
Cantor, B. (2016, May 24). McDonald's Improves Customer Experience By Improving Employee
Experience. Retrieved from customer contact week digital:
https://www.customercontactweekdigital.com/agent-engagement/articles/mcdonalds-
improves-customer-experience-by
Customer Relationship Management Practices by McDonalds- A Case Study. (2015, May 18).
Retrieved from FDocuments India: https://fdocuments.in/document/customer-
relationship-management-practices-by-mc-donalds-a-case-study.html
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ETRetail. (2020). McDonald's India launches contactless delivery amid coronavirus scare. New
Delhi: The Economic Times. Retrieved from
https://retail.economictimes.indiatimes.com/news/food-entertainment/food-
services/mcdonalds-india-launches-contactless-delivery-amid-coronavirus-
scare/74654226
Rath, P., & Tandon, D. (2020, June 18). McDonald’s – I’m Lovin’ It. Retrieved from My Brand
Tales: https://www.mybrandtales.com/2020/06/18/mcdonalds-im-lovin-it/
The software tools that make McDonald successful. (n.d.). Retrieved from WhataSoftware:
https://blog.whatasoftware.com/the-software-tools-that-make-mcdonald-successful/
TheEdge (Ed.). (2009, September 27). McDonald’s value proposition. Retrieved from The Edge
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proposition
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CONTRIBUTION OF TEAM MEMBERS
1. Anirudh V
• McDonald’s Company profile
• McDonald’s Mission Statement
• McDonald’s Vision Statement
• McDonald’s during Covid-19 pandemic
2. Ajay Vincent
• Customer Relationship Management
• Importance of Customer Relationship Management in an Organization
• Effects On Customer Satisfaction
• Customer Benefits
3. Zahra Ahammed
• CRM practices followed by McDonald’s
• McDonald’s CRM Initiatives for India
• CRM for internal customers
• Extended CRM initiatives
• McDonald’s CRM Software Tools
• Ways through which McDonald’s enhances Customer experience
• Recommendations for McDonald’s CRM process
• Bibliography
4. Arun Mohan
• Customer value proposition at McDonald’s
• Customer lifetime value at McDonald’s
• Extending the Customer Lifetime Value
• Improving customer relationships during and after covid-19
• Changes undertaken by McDonald’s to improve customer relationship and value
• Value experience in three different perspectives
• Conclusion
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