McDonalds Framework of Brand Turnaround: The Eight Ps

You have an eight P framework. Purpose. Promise. People. Product. Place. Price. Promotion. Performance.

Those eight Ps started a long time ago when we tried to synthesize what a turnaround plan looks like. What are the common elements of our various experiences? Small brands. Big brands, global brands. In one case, a small family business in California. Other cases, like we’ve talked about, huge global enterprises, multi-brand companies. There were several common elements to our turnaround plans. We branded it. We called it the plan to win. It actually consists of three phases or three elements. One is the brand ambition, which I talked about, which is design internally. It’s not design for the customer. We don’t expect it to appear in advertising. It’s nobody’s business what our vision is. It’s to address the internal culture. If you don’t achieve cultural alignment, nothing successful will happen. We call that brand ambition, it has two parts to it, purpose and promise. There’s a lot of discussion in marketing about purpose. It’s important because purpose helps build an internal pride. An internal pride is a very powerful force. There’s research data that says proud employees do a better job on quality. They do a much better job on service in particular. They come in early and they stay late because they’re prod to do what they’re expected to do. They work harder, but they also work better. They want to succeed, they just don’t want, okay, I’ll get along and go along, they want to contribute ideas. They want to help the company succeed. Purpose is all about building internal pride. Promise is what is our promise to the customer?

To build brand preference. I come back to brand preference. It’s not simply to attract customers. It’s to attract customers because they prefer our brand, not because we’re convenient and cheap. Purpose is, what’s the purpose? Why are we in business? What’s the purpose of our enterprise? Promise is what’s our promise to the customer? With the way we describe that is, what’s our relevant differentiated trustworthy promise to our customer? It must be relevant, it must differentiate us for customers and people must trust, I say trustworthy, not trust. We must be worthy of the customer’s trust. Just saying trust me doesn’t build trust. Promise is the trustworthy relevant differentiation. Then once we’ve defined that, the next five Ps are how we put the promise into action. We call those the five action Ps. I start with People. People is the first action key. People doesn’t refer to the customer. It refers to the people who are in the company. For example, to get our people aligned worldwide, when I was there, McDonalds had 1.6 million employees worldwide. One and a half million employees.

We would launch a new advertising campaign and we would keep it secret until the franchisee convention every other year. One of the highlights of the franchisee convention is we would unveil the new advertisement. It would get a standing ovation. The next day it would go on television around the world. I felt that was a stupid way to do business. I proposed that our franchisee convention is coming up in February, I’d like to launch the new advertising in October before that February meeting. How can you do that? What will we do with the convention? Well, find something else to get a standing ovation. I have a different idea. My idea is, I want 1.6 million people, every single employee worldwide and I’m going to give HR 100 million dollars out of my ad budget to expose the new advertising to every employee around the world. When the advertising breaks, and a friend comes up to you, an employee anywhere in the world and says, “I just saw a new commercial for McDonalds, I really think it’s terrific.” The employee says, “Yes, I’m glad you like it. I’ve already seen it.” Not what we have had. A friend says, “I’ve seen the new advertising.” The employee says, “I haven’t seen it yet.” We achieved that goal. Now, what people don’t recall to date, we had new music, written and performed by Justin Timberlake who was the number one performer around the world. We built a huge promotion around it. Our new music, I’m lovin’ it. Justin put it as the opening music on his website.

He sang it at his concernt tour. We invited employees and franchisees and provided them with free tickets to the Justin Timberlake concert tour. I’m lovin’ it music became the number one most requested song on MTV’s program called TRL, total request live. It made number one on the charts in China. It was number one on the charts in France. Why hide this from the employees? I’d rather employees come to work with a smile, proud of the brand that they work on than, “Another Mc job.” People is the first P. Get all of your people on your side and you can’t fail. Don’t get them on your side and you will fail. What aggravates me in the way we teach marketing at business school is, we have the four Ps. Product, place, price, and promotion. That’s a sin. That’s all about what we geniuses do. We don’t do anything. We don’t do anything. Our people do everything. Without them, we’re nothing. They bring the brand to life. We don’t bring the brand to life. They do. Honor them. Respect them. I’m passionate that in a customer focused business, customers don’t come first. Customers come second. Customer focused employees come first. People come first.

Then comes product and service, of course, and to me, product service is the tangible evidence that you will live up to your promise. If you want people to prefer the brand, if you make a relative differentiated promise, then product and service is how you live up to the promise. Then comes place. Place in the modern marketing world includes the place where the people interact with the brand, which is we now realize may not even be at the restaurant. Could be online. Not only do 70 percent of the sales are through the drive through window, but a large percentage of them, they don’t even drive to the restaurant. They order online. It’s delivered. That’s still the place where they interact with the brand. Place is a much bigger more complex thing today. Price isn’t about how to be cheapest, it’s of course how to be the best value. In the value equation, the denominator isn’t just money. It’s money, time, and effort. Interestingly, people will pay money to save time. If you focus on money, time, and effort, the answer isn’t always to charge less. People will pay a premium to save time or reduce effort. Make life easy for the customer, not just make your service cheaper for the customer. Then comes, of course, promotion. Promotion isn’t about how you build awareness. The word promotion has been corrupted. We spend too much on promotion. We should spend it on advertising. Advertising is promotion. If you look the word promotion up in the dictionary rather than in a marketing textbook, promotion doesn’t mean deals and discounts and price cuts and limited time offers. The word promotion, to promote means to elevate. I got promoted means I got a higher title. I got a bigger job. I got promoted to a more advanced course in my high school class. I’ve been promoted into the advanced calculus.

Promote means to elevate. The purpose of promotion is to elevate the brand in the customer’s mind. The elevate that, every channel makes a difference. If it is a price promotion. Don’t promote the deal, promote the great brand on deal. Don’t just: We have a great deal. We have a great brand on deal. Elevate the brand and then tell them why it’s a good deal. every communication with a customer should aim to elevate the brand. Every touch point should try to elevate the brand. That’s what promotion is all about. Those are the five action Ps. The last P, of course, is performance. It all comes down to results. Create a result’s focused culture. When I arrived in McDonalds, McDonalds was talking about brand and what a great brand they had and the CMO was giving speeches and they won advertising awards. They were so proud that they won an award at Con. What were the business results? They didn’t include brand preference. They didn’t include brand loyalty. They didn’t include customer frequency and customer attraction. The only thing they focused on was stock price. When you do that, everything else is a fraud. Those are my eight Ps.