With quick-service restaurants (QSRs) increasingly pushing their digital loyalty programs to gain valuable customer data, McDonald’s is aiming to add 100 million new members in the next few years.
The company announced Wednesday (Dec. 6) in an investor update that it aims to grow the 90-day active user base for its loyalty program from 150 million to 250 million by 2027. Additionally, the company plans to drive more value from each of those loyalty members, with a goal of more than doubling systemwide sales attributable to these users from $20 billion to $45 billion by 2027.
“We have a clear trajectory for future growth as we continue to build on the brand strength, global footprint and digital ecosystem that have resulted in unparalleled competitive advantages and cemented McDonald’s as one of the world’s leading consumer-facing brands,” McDonald’s President and Chief Executive Officer Chris Kempczinski said in a statement.
Loyalty programs can provide restaurant brands with direct insight into their customers’ behaviors and can help them personalize their marketing without relying on third-party information (and the changing regulations to which such data is subject). Indeed, McDonald’s touted in Wednesday’s announcement the importance of delivering personalized digital offers through its app.
Overall, the majority of consumers now use loyalty programs at restaurants. According to data from the PYMNTS Intelligence study, “Connected Dining: Consumers Like the Taste of Discount Meals,” which is based on a survey of more than 1,800 U.S. consumers, 51% use at least one restaurant loyalty program, with 49% participating in these programs at QSRs and 34% at FSRs.
QSRs are increasingly turning to their personalization capabilities to set them apart from competition. Take, for instance, Starbucks, the world’s largest restaurant chain by revenue.
“[We’re leveraging] targeted offers to our most loyal customers, increasing efficiency as we create a more personalized experience,” Executive Vice President and Chief Financial Officer Rachel Ruggeri told analysts on the company’s most recent earnings call. “As it relates to demand, it was another record-breaking quarter for key aspects of our Starbucks Rewards program: active members, spend per member, and total member spend, which all surpassed previous highs.”
Brands ranging from Chipotle to IHOP to KFC, among others, are investing in improving their data analytics and personalization capabilities.
The kind of personalized offers that loyalty programs become even more essential as ongoing economic challenges put pressure on consumers’ restaurant budgets. A PYMNTS Intelligence survey of more than 2,300 U.S. restaurant customers late last year revealed that roughly a third of consumers have been making purchases from restaurants less frequently amid inflation, and those cutbacks are all the more pronounced now, during the holiday season, as the costs of travel and gifting further constrain consumers’ spending power.
In fact, the PYMNTS Intelligence study “The Credit Economy: How Consumers Are Approaching Holiday Spending and Travel,” created in collaboration with i2c and based on a survey of more than 3,300 U.S. consumers, reveals that 79% say they plan to cut back on buying food from restaurants this season due to concerns about holiday spending.