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    Burger King Sets a Standard for Modern Customer Acquisition

  • Why did the fast-food chain troll McDonald's? It was about a lot more than good marketing.

    flickr: Mike Mozart
    Burger King's offbeat marketing has been a staple over the past year.

    In late 2018, the No. 1 app in the Apple store wasn’t YouTube, or Instagram or Snapchat. It wasn’t even Netflix.

    It was Burger King.

    Fast food is not exactly known for its tech prowess. Or at least it hadn't been traditionally. In theory, Burger King had no business being anywhere in the conversation yet here it was, hitting one million downloads in less than a week.

    The chain did it with a clever 1-cent Whopper promotion: Users had to download the app, go within 600 feet of a McDonald’s, place an order and then receive turn by turn directions to the nearest Burger King. There, they could enjoy their penny Whopper in all its glory.

    “We generated over 1.5 million downloads from the initiative, making the Burger King app the No. 1 most downloaded app in the Apple store for several days in a row and the most downloaded quick service app in the U.S. among our direct competitors in December," chief executive Jose Cil said in February.

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    On the surface, it’s smart trolling that gets customers away from the competition and through the doors. In reality, it’s something much more brilliant: acquiring known customers at scale in an industry that has never collected information on the customers who buy their product. And they did it at a stupidly cheap cost.

    Let’s do the math: A Whopper averages $4.19. The majority of customers likely bought fries and a drink to go with their burger, which runs $1.39 and $1.29 for the value menu sizes, respectively. That means Burger King was acquiring many customers for about $1.50.

    It’s hard to say what the cost of customer acquisition (CAC) is across every industry, but it’s surely a lot more than $1.50.

    And it was more than good marketing. It was good customer relations building. Burger King now could collect information about customers’ shopping habits, what they bought, how often they bought and time of day. And because it knows more about guests’ habits, it knows better how to target consumers and make it easier to buy. Burger King was building on the customer experience.

    The brand showed that fast food was finally entering the modern age of customer acquisition and set a new benchmark for CAC in the process. And it’s a model that might be the savior for struggling industries, like retail apparel.

    Improving the customer experience

    It wasn’t that long ago that you had to have the perfect amount of cash on hand anytime you wanted to ride in a taxi. It also wasn’t that long ago that you had to go to a brick-and-mortar store to pick out which movie you wanted to watch.

    When Uber and Lyft came along, they didn’t invent the idea of giving other people rides for money. They made it easier to get a ride where and when you wanted. They made the experience better.

    Netflix didn’t invent the idea of home entertainment. They made it easier to watch programming where and when you wanted. They made the experience better.

    We all know retail is struggling, but it’s not just because Jeff Bezos is hiring robots. Amazon made the retail experience better. You can now buy an espresso machine, groceries, and running shoes while sitting on the couch in your underwear. How is that not an amazing shopping experience?

    The good news is retail and restaurants still have the opportunity to inspire loyalty in customers that goes beyond rewards cards or other incentives that subtract from the bottom line. The technology that enabled Uber and Netflix and Amazon to flourish is no longer out of reach.

    But to get there, a restaurant must first become a customer-centric, customer-first brand. They have to become a customer experientialist.

    Know your customers

    For industries like clothing retailers, the vast majority of customers are completely anonymous. Bob isn’t Bob; he’s a pair of socks and a suit. He comes in, buys, leaves, and no one knows that he was ever there.

    To create positive customer experiences, restaurants can’t just acquire any customers, they have to acquire known customers.

    Imagine what retail clothing stores could do with known customers. Today they rely on red sale signs to bring in more foot traffic. Maybe it helps one or two customers to come in or encourage someone to make a purchase, but the truth is they don’t really know what the customer’s motivations are who shop with them. The situation isn’t that different for restaurants.

    What if, instead of store-wide sales that dip into revenue, operators were able to offer an improved experience and serve up personalized incentives? What if I could reserve a changing room online at a time that works for me, create a list of clothes I’d like to try on and when I arrive they’re already in my changing room, ready for me? Or be offered a food experience that aligns with my daily schedule and wants, or past user behavior?

    Online clothing retailers can do a lot, but they still can’t know what is going to fit my specific body type. If my shopping experience was improved, and all I had to do was download an app and give up some of my information, I’d do it gladly.

    This is the Burger King effect. They are now in millions of pockets, and that was the real brilliance of the 1-cent Whopper campaign.

    Customers are willing to give you their information and they want to be loyal, but only in exchange for something that’s going to meaningfully improve their lives and their experiences. Some recent research shows that only two in 10 members are very satisfied with the level of personalization in their loyalty programs. When personalization is done well, there is a 6-fold lift in member satisfaction with the program.

    It’s time for restaurants to get serious about making it personal. It’s based not on reinventing an industry, but simply by making a single customer’s journey a little more enjoyable.

    Becoming a customer experientialist will not only improve sales, but it may also fundamentally alter the future of retail. That’s a Whopper of an idea.

    Sean Claessen, Executive Vice President of Strategy & Innovation for Bond Brand Loyalty, has taken years of millennial marketing, experiential excitement, and an appetite for innovation into new realms.