McDonald’s "Pay With Lovin’" Campaign: A Cautionary Tale of Good PR Gone Wrong

During this year’s Super Bowl, McDonald’s ran a very interesting commercial, not about a special new sandwich or other changes to the fast-food giant’s menu, but about how customers may be able to pay for the items on that menu. Dubbed “Pay With Lovin”, this new promotion allows select customers to pay for their order with kindness of some kind. As shown in the ad, you can make a call to a family member and tell them that you love them, give someone a compliment, or even do a little dance in exchange for your Big Mac and fries. The ad itself is actually very well done and touching, and the entire campaign is an interesting change from a company that is certainly not seen in a favorable light by many consumers (McDonald’s is always at or near the top of “Worst Fast-Food Restaurant” surveys and lists). In this article, we will take a look at why this new promotion from McDonald’s is a good move for the company and what we may be able to learn from this campaign.

The perception of McDonald's

When someone says “McDonald’s” to you, what do you immediately think of? If your answer is “cheap, low-quality food”, then you are not alone. Right or wrong, McDonald’s has long been known by many for inexpensive, mediocre food. The company’s decisions over the years, like their “value menu” of very low cost items, has certainly contributed to this perception. Today, restaurants like Chipotle and Panera continue to grow in popularity by offering customers quick service, but with better quality (and more expensive) meal options than the traditional fast-food restaurants offer. These restaurants, often known as “Fast-Casual”, have taken business away from McDonalds while further cementing their place as the go-to location for that aforementioned “cheap food.” So how does McDonald’s start to move away from this negative perception of their brand – they begin by changing the conversation.

Changing the conversation

McDonald’s latest promotion has nothing to do with their food or their prices, the two things for which they are most commonly known in negative light. This “Pay With Lovin” campaign is all about fun and good feelings. It is part contest, part giveaway, and part customer appreciation event all rolled into one.  The campaign itself is a very interesting experiment. Between February 2nd and the 14th, each participating McDonald’s location will have 100 total “prizes”, with a select number of customers selected by random each day. Those random customers will be given the opportunity to “Pay With Lovin” and use a fun expression of kindness instead of money when they are ordering their meal. There is excitement to this promotion as customers wonder if they will be chosen for this “Pay With Lovin” opportunity. It also provides McDonalds with a great way to connect with those customers in a way that they have never done before. In an article on Inc.com, McDonald’s Chief Marketing officer, Deborah Wahl, says, “We’re on a journey of transformation and a key part of that journey is how we engage with our customers.” McDonalds realizes that to change the negative perception of their brand, they need to change the conversation, and they are starting that change by interacting with their customers in a fun way that is designed to make people feel good.

People are talking

Another great aspect of this promotion is that people are talking about McDonalds – and it is not in a negative way! The company has given customers something to get excited about and something to share with others. That moment of delight when a customer is informed that they can “Pay With Lovin”, and the fun that happens from that event, is something people can enjoy and then share on social media by telling others about the experience. This will further spread the good cheer and the positive vibes for a brand that has seen far too few of those in recent years. The fact that people are being nice and kind as part of this campaign just adds to the positive vibes of the promotion, and while I am sure there will be the occasional sourpuss who will refuse to engage in this idea (you can’t please everyone, no matter how hard you try), the majority of customers who are told their order is free if they simply spread some love will be happy to do so!

What’s next?

So changing the conversation is a great start for McDonalds, but what comes next? This promotion, as innovative as it is, is a short term initiative. Once this campaign is over, McDonald’s will be back to being known as that cheap, low quality fast food restaurant unless they make some additional moves in their business. If they want to truly change the conversation in the long term, they need to build on what they have started here – but at least they have found a place to start.

What can we learn?

So what marketing lessons can we take away from McDonald’s “Pay With Lovin” campaign?

1. If people are speaking negatively about your brand, finding a way to change the conversation is a good start to changing perception.
2. If you want to change the conversation, start with your existing customers and change how they talk and think about your company.
3. Engaging customers in ways that are fun and unique will get people excited and talking, which encourages them to tell others about their experience. The more people they tell, the quicker the conversation around your brand moves towards the positive.
4. A campaign like this is a great start, but if you have larger problems, you still need to fix those issues or risk falling back exactly to where you were before your campaign began.

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10 Things You Pay for From Traditional Marketing Agencies

In today’s business world, it’s no longer the big fish that eats the small fish; it’s the fast fish that eats the slow fish.

In the same way the information revolution has changed how customers and market share are won, it has also reshaped the old systems that once governed how companies operate and how people work. The future of business is more flexible, faster, leaner and smarter.

This is not just about adopting a telecommuting policy or forgoing the purchase of that expensive copier. It’s about changing how business is done, both in philosophy and in execution.

The penalty of clinging to old business practices is losing clients that no longer can justify bills with unneeded overhead baked into them. As leaner and smarter companies emerge, the old juggernauts who are slow to change are quickly dying.

Marketing agencies

At the top of the scale of corporate bloat are marketing and advertising agencies. While not all industries can shed their physical offices and adopt a virtual model, the dominance of digital marketing coupled with the very nature of marketing’s day-to-day business operations afford these agencies a clear-cut path to modern efficiency.

However, in reality, few have changed. The majority of marketing firms hang on to these old systems of operations, passing on the burden of their expenses to their clients.

The traditional marketing firm still maintains an expensive posture to attract its clients.Why? Most find changing their methods of operations to be just as hard as adapting to today’s Web culture and the new rules of doing business. Too much has changed too quickly. In clinging to old methods – even those of its own self-promotion – the traditional marketing firm still maintains an expensive posture to attract its clients with their lavish offices and costly travel. These companies force work into physical locations, perpetuating the punching of clocks and shuffling of paper, while carrying years of old business operations in the form of debt, all of which must ultimately be paid for by the client.

There’s a reason why marketing companies are dying left and right, beyond becoming irrelevant in the digital age. Today's clients no longer accept invoices inflated by bloated operations, particularly when virtual companies can do more at a fraction of the cost.

The rise of the virtual company

It took time for companies like Amazon, Netflix and Apple to revolutionize and overtake industries that were once based in bricks and mortar. Replacing the physical form was a challenge in reconditioning the mind of the consumer and in reshaping traditional systems, such as fulfillment, customer service and exception handling.

2010 will see the emergence of the virtual company in full force.These initial obstacles were quickly overcome as consumers realized the advantage of lower prices by way of lower overhead, mutually beneficial partnerships and geographical barriers being torn down and giving way to an expanded market. Today, that same virtual model that started strong in the retail sector is being adopted throughout all applicable industries. As a result, virtual companies are growing at record pace.

2010 will see the emergence of the virtual company in full force. The convergence of technology, communication, new service-based companies and systems that meet the demands of companies that no longer carry the burden of bloated operations will allow more companies to work smarter, faster and from anywhere.

As virtual companies continue to refine their systems and clients continue to realize the value in receiving better service for less money, the virtual company will gain strength and overtake the outmoded traditional business models. This not only improves efficiencies but tears down geographical barriers to markets and talent.

As we enter the age of the virtual company, let’s review ten things you pay for from traditional marketing agencies:

1. Facilities

Office space is typically the largest expense on the books for marketing agencies. These obligations range from rented space in a shared office park to owning (and owing for) real estate, freestanding buildings and parking facilities.

Virtual marketing companies shed this expense because the nature of the business simply doesn’t require it anymore. Marketing is digital, and print is dying. All the infrastructure that was once housed in a physical location is now replaced by a range of new digital services. Communication is conducted through e-mail, mobile devices, video conferencing and client dashboards rather than on-site meetings and client lunches, the costs of which are ultimately passed back to the client.

The marketplace demands geographic barriers be removed to hire, collaborate and partner with the best talent in the industry. The virtual company’s employees work remotely within a virtual space that accomplishes anything that a physical location provides and more. They are mobile and available at a moment’s notice to meet with clients. Even remote offices, meeting spaces and presentation rooms can be rented by the day or hour, as needed, so as not to waste money on a fixed building that sits there to house all the bloated systems and conventions the traditional marketing company clings to.

2. On-site employees and physical work systems

For many office-based companies, the days of having people gathered in a building to work is gone. For these businesses, the act of keeping people around was just another form of time card punching, rooted in old systems founded on the demand for people to be present and available to coworkers and customers from 9 to 5.

Happy employees do better work, particularly the ones responsible for great creative work.Virtual companies don’t operate according to fixed 9-to-5 schedules. Instead, their systems and employees are faster, more flexible, working within tighter deadlines and using new, more robust project management conventions.

Telecommuting is more prevalent today than ever, for reasons that go beyond avoiding the cost of expensive office space. Happy employees are ones that are not trapped in cubicles, hustling through traffic, burning 30-40 hours and hundreds of dollars a month in commuting to a fixed place to do work that can be done anywhere. The fact is, happy employees do better work, particularly the ones responsible for great creative work.

Moreover, work systems based on having everyone in a centralized office all day are terribly inefficient. To see this, you have to look beyond hard costs and expenditures and consider the man hours wasted on meetings, scheduling, water cooler talk, Web surfing – the list goes on and on.

Replacing the physical office environment are proven virtual office management and collaboration systems like Basecamp, video conferencing, cloud computing and mobile Internet connectivity. Most importantly, the philosophy behind the work is based on maximizing project development efficiencies rather than filling up a 40-hour work week simply for the sake of adhering to convention.

3. Utilities

From security systems, electricity, heating and A/C to cleaning and facility repairs, the auxiliary costs of maintaining a facility can be extraordinary. This is an expense that virtual companies leave behind and don’t pass on to their clients.

4. Landline phone systems

In an age where business is a 24-hour, anywhere and everywhere proposition, corporate phone systems are an enormous waste. Everyone has a cell phone, and most working professionals carry smartphones. For many, the superfluous office phone collects dust, and voicemail systems are rarely used. In a time when most households are shedding the costs of landlines in favor of more flexible and leaner mobile options, many businesses still lag behind.

Agencies that continue to operate from a physical facility must pay to maintain and upgrade expensive landline systems, adding yet more extraneous dollars per hour to their clients’ bills.

5. Office furnishings

Expensive offices, conference room tables, desks, chairs, bathrooms, kitchens, interior decoration and even trophy cases displaying purchased accolades are omitted from the overhead costs of all virtual companies.

6. Computing infrastructure and LANs

So many companies still keep gobs of file and printer servers along with data backup systems, server redundancies, uninterrupted power supplies, routers, switches, cabling, internal e-mail systems – the list goes on.

For virtual companies, the idea of a LAN (local area network) has been replaced by cloud computing, with Web-based service providers, project management, collaboration systems, and applications. These systems are accessible from anywhere in the world, offer true collaboration with anyone and are always backed up and protected.

What’s more, project management in the virtual space allows for new and innovative work habits that promote speed, efficiency and flexibility in ways old companies employing old work systems simply cannot keep pace with.

7. Paper

So many of the slow, dying companies we see today still live in an office with paper circulating all the time. Believe it or not, nowhere is this more true than at your local marketing agency. Also included in this paper-filled world are printers, copiers, fax machines, shredders and a never-ending variety of supplies, all in support of paper trails that lead from the office to the client and back again before ending in nicely climate-controlled filing cabinets.

Virtual companies exist in a paperless world, and the best work circles around those that stay in a paper-driven office. The benefits of going (and staying) completely digital are immense. Digital documents are searchable, sharable, versioned, more secure and viewable on nearly any device. The more files that are kept, used and cataloged in digital format, the more efficiencies will increase overall.

8. Support staff and personnel

When agencies pay for an office, furnishings, phone systems, computing infrastructure and everything in between, they also require additional personnel, time and resources to support those systems, including office managers, receptionists, IT staff, cleaning crews, landscapers and security, to name a few. Thus, these already excessive expenses are further exacerbated and passed on to the client.

9. Restricted geographical barriers

If there’s one thing the Internet has brought to the economy, it’s the expanded marketplace. The business systems of virtual companies are not only set up to take on clients without most of the additional expenses suffered by traditional companies but to hire the best talent available anywhere.

Truth is, many marketing agencies are restricted to their local markets. While these firms would in theory jump on a plane to take on a client nearly anywhere, most find in practice that only local clients are cost-effective given the traditional systems still employed.

10. Debt

The result of all of this expense in a world that is quickly shifting to leaner and smarter operations is that this much of the excess is carried forward in debt that comes at a premium paid to a bank in interest. That ongoing obligation is passed to clients along with the cost of all other inefficiencies.

Virtual companies that start fresh, using smart, lean and flexible systems of operation don’t carry years of bad investments in outmoded, expensive systems on their backs. In fact, as traditional marketing agencies continue to lose clients and market share to these more adept modern firms, the additional debt taken on to stay alive will eventually lead to the extinction of the slow, bloated traditional marketing company as we know it.

photos: Flickr: Christ0ff, chrisdlugosz

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