In a recent conversation with a chief technology officer, he asserted all digital technology changes in his organisation were being led by IT and not by marketing. It made me wonder: How long a marketing function like this could survive?
McDonald’s A/NZ CMO, Mark Lollback, isn’t someone who backs away from a challenge or the need to change.
“Every job I’ve had has been going into a problem,” he tells CMO. “I love change and solving big corporate problems or businesses that are flat-lining; it’s just my mindset. I also consider myself a bit of a maverick.”
So when he was offered the opportunity to help McDonald's turn its go-to-market strategy around and find a way to deliver stronger long-term value to its customers to drive sustainable business growth, Lollback jumped at it.
“Strategy is definitely more important than it has even been for marketers: Not just marketing strategy, but building a business strategy where the role of marketing and CMO is taking a real leadership position around where the business should be going,” Lollback comments.
Over the past year, Lollback has spearheaded a transformation program at McDonald's which has seen the organisation overhaul how every department looks at its customer value proposition.
One of the cornerstones of this approach is introducing “consumer noticeable branded platforms”, or longer-term growth initiatives aimed at providing more value to McDonald’s customers. Examples include the ‘create your taste’ customisable burger menu and extending McCafé into drive through.
“We’ve also moved away from limited time offers to new platforms such as ‘real choices’ lighter choice range,” Lollback says. “That’s a platform, and that’s what we’re focused on building. If we lay down the business plan correctly and genuinely deliver to the consumer, we’ll see growth.
“So it’s really about changing our thinking from delivering next month’s sales, to laying down plans that have a longer-term impact.”
Time to change
Lollback says the catalyst for change at McDonald's was necessity. In 2013, the fast food chain experienced a tough year and was facing heavy, price-led competition. “We probably didn’t react as strongly as we should have at the time,” he says.
“I think I nearly blew this joint up, because the way we solved that is by throwing everything at it. We did more one-time offers, launched more new products, made more TV commercials and ran 200 campaigns. It nearly broke the restaurants in terms of complexity, stress and the crew. But even on the back of that, we didn’t get the results we needed.”
This forced the organisation to take a step back and start looking at the fundamentals. “Whenever a business is going through ‘difficult times’, it’s always good to look at what has been really powerful historically, and what built the business into what it is today,” Lollback says.
“The answer was simple: It was these consumer noticeable platforms that had longevity and were truly valued by the consumer. It wasn’t noise, it wasn’t short-term innovation, it was fundamental platforms. “When we did that review and shared it with the board, it became very easy for all of us is see that our responsibility was to find out what those platforms would be.”
The group also realised it had stopped truly putting customers at the centre of the business. “We had become internal, chasing internal targets, and forgot what our business was about, which was being a fantastic place for customers and being very customer centric,” Lollback says.
To regain this focus, McDonald's investigated every touchpoint, from menu and marketing to restaurants, the service model and platforms. It also took a brutal look at what consumers were saying about the business.
“Internally, we created these ‘consumer tensions’,” Lollback explains. These included value, food experience, convenience, and the brand. “Across every function, we then tried to address those tensions.
“There was lots of brand tracking and consumer insights to filter down a small number of disruptive tensions, and these made us feel a bit uncomfortable. But it was through those that we could galvanise the business and operators behind a real desire to change.”
Since executing on this strategy, the business has turned around and is growing.
“We’re very strong and we’re very happy with the results,” Lollback adds.
Up next: How McDonald's is planning to personalise experiences through new digital innovations