The $2.1 Billion Screen: McDonald's Sales Funnel Tricks

5 Min Read | 992 Words

This week, we delve into the fascinating world of McDonald's self-ordering terminals (SOTs), a prime example of how technology and strategic design can significantly influence consumer behavior and drive business success. Serving around 69 million customers daily, with half of these orders placed on SOTs. This highlights crucial lessons in user interface design, sales strategies, and the impactful role of data in maximising efficiency and profitability.

Fun Fact

Did you know McDonald's once tried to create a “Bubblegum-flavored” Big Mac? The experimental burger was part of a quirky promotional campaign in the 1980s, but thankfully, it never made it to the menu! 🍔🎈

How McDonald’s Self Order Terminals Are Worth $2.1 Billion

We’ve all been there, you walk into a McDonald’s wanting a simple cheese burger but a couple minutes later you’re walking out with a Big Mac, 6 piece nuggets, large coke, large fries and an Oreo McFlurry.

So the question is, how do they do it?

While the short answer is that you probably wanted it in the first place, the consensus of research on their SOT(Self Order Terminal) shows that they in total are worth a whopping $2.1 Billion to the company due to their ability to increase average order value.

The reasons these machines are so effective are because of the simple yet killer sales funnels and upsell ladders that they employ. Let’s discuss the different aspects below.

Reference Value

Reference items are shown fixed at the top and sometimes on the side bar of the display, forcing customers to subconcsciously compare the price of the item they intend to order with that of a higher value bigger item.

This comparison highlights the price difference and often causes us to view the original item as more affordable than we previously thought.

Nudging

This practice of user interface design subtly influences behavior by displaying options in different ways.

A simple example on self-ordering terminals (SOTs) is how the menu sidebar is significantly smaller than the prominently displayed meals in the center of the screen, drawing our attention to these items. Additionally, more expensive items are often placed at the top or middle of the screen, eliminating the need for scrolling and dominating our eye-level plane, thereby capturing our attention more effectively.

Upselling and Bundling

Upselling is a sales technique where customers are offered additional items as part of a bundle at a lower price than if purchased individually.

For example, McDonald's employs a two-step upsell process. First, they offer a small meal, and then they suggest upgrading to a large meal for "only a little more"—making it a "no-brainer" for the customer.

The products added also often boast a far higher profit margin and involve little extra effort to make.

Product Recommendations

Another, more subtle form of upselling involves offering extra products severable from the ‘standard meal’, typically snack-like items such as six-piece nuggets, pizza pockets, or desserts.

This strategy further increases the basket size and the average order value.

Dopamine Hits

To encourage adding items and increasing meal sizes, the system's display and graphics are intentionally designed to show more colour and satisfying animations after clicking "add to cart." This triggers a small yet influential release of dopamine, reinforcing the behavior.

Offering Availability

Each time an item is added to the cart, the system takes the customer back to the main menu. This subconsciously encourages browsing more products, with the highest click rate for desserts occurring after a return to the menu.

Dark Patterns

The process of designing interfaces to subtly guide customers toward actions they might not otherwise choose is evident in the SOTs.

For example, the SOTs "conveniently" display the order total at the bottom of the large screen, forcing the customer to actively look down, in a dull black font, while prominently featuring the bright yellow "Add to Order" and "Checkout" buttons. This design choice minimises the visibility of the total cost, encouraging customers to focus on completing their purchase.

Checkout Design

The checkout system within self-ordering terminals (SOTs) encourages card payments by using larger button designs compared to the cash option. This is because customers often associate more emotional value with cash payments.

Another tactic employed by SOTs is the dehumanisation of the interaction, which eliminates the social pressure of being judged for buying a large meal, add-on snack, and dessert.

Data Collection

McDonalds serves roughly 69 million customers every day, with around half of these orders placed on the SOTs.

This extensive usage allows McDonald’s to leverage big data and AI automation to continuously streamline the user interface and optimize the SOT system based on millions of data points, maximising efficiency and profitability for the company.

Round Up

The use of these SOTs underscores the growing importance of leveraging technology and data to drive business success, a trend that is becoming increasingly critical globally. While such advanced systems may not yet be as prevalent and wide spread in other South African industries, understanding these strategies is vital. They play a key role in analysing data, optimising processes, and introducing innovative solutions to enhance profitability and efficiency.

Extra Tip/Suggestions

This weeks article was inspired by the video below, feel free to check it out.

Resources

We’ve compiled a list of our favourite value-packed finance and other resources, including industry relevant courses from Wall Street Oasis.

Check them out!

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