From Hungry to Happy: The McDonald's upselling experience

From Hungry to Happy: The McDonald's upselling experience
Arun Patel

Arun Patel

May 4 2023

19
3.8k

How upselling can be a win-win situation for both the seller and the customer, and listed several benefits of upselling, including increased average order value, improved conversion, reduced customer acquisition costs, pricing power, preventing dead stock

Last weekend, I visited a crowded mall filled with people shopping, chatting, and eating. As I walked around, I started feeling hungry, and my stomach began to growl. So, I decided to head to the food section, where I saw a McDonald's restaurant.

The smell of burgers wafted through the air, making my mouth water. I approached the cashier and ordered a classic burger, which was juicy and delicious.

During my visit to the restaurant, the friendly cashier offered to add fries and a drink to my order for just a few extra dollars. Although I was initially hesitant, I remembered that I was very thirsty and could use a refreshing drink to quench it. So, I said yes and added the extra items to my order.

After some time, I realized that what the cashier did was a classic example of upselling. This is when a seller offers additional items to increase the total value of a purchase. We often see upselling on McDonald's website, like the following example:

From Fries to Profit: Understanding McDonald's Tactics to Increase Profit.
  1. Increase average order value: Did you know that by upselling, McDonald's is increasing their average order value? That means more profitable revenue. By offering customers a fancier or upgraded version of a product they already love, the store can encourage them to spend more money in total.
  2. Increased Conversion: Offering extra options that you may not have thought about before leads to increase conversion. Online stores, like McDonald's, have been able to improve their conversion rates by suggesting personalized recommendations and showing relevant products. It's definitely something to consider!
  3. Reducing customer acquisition costs: Did you know that offering rewards programs can actually lead to repeat business for McDonald's, just like any other online store? Basically, when customers are satisfied with their purchases and the shopping experience, they are more likely to return to the store for future purchases. This reduces the need for costly customer acquisition campaigns.
  4. Pricing Power: Like McDonald's offering upgraded or fancier versions of products, stores can set higher prices for those items, and customers may be willing to pay more for the added value.
  5. Preventing Deadstock: McDonald's has got a cool strategy where they offer different meals using the same products and variants, making them unique. Similarly, online stores can appeal to a wider customer base by offering a diverse range of products. This not only reduces the risk of dead stock but also helps to keep things interesting.
  6. Improved customer lifetime value: McDonald's has enhanced the value of their customers' experiences by taking a few steps. Other sellers may follow as well. Firstly, they could focus on making their customers happy by providing positive experiences. Secondly, they could consider implementing loyalty programs that reward customers for repeat business. And lastly, they could offer personalized menu options to cater to individual preferences. These simple changes could make all the difference in improving customer lifetime value!
  7. Reducing Costs: As you read above, upselling can increase the average order value and revenue per transaction, which in turn can lead to reduced costs and increased profitability for each sale.

So, I wanted to share something cool with you about upselling. It can actually be a win-win situation for both the seller and the customer! Unlike some sales techniques that may pressure or trick customers into buying something they don't really need or want, upselling involves offering customers a better or more suitable product that will genuinely enhance their experience.

When you upsell correctly, you can increase customer satisfaction and loyalty. It's important that customers feel like you're interested in helping them find the right solution. This can lead to repeat business and positive word-of-mouth referrals, which are both really important for any online seller's long-term success.

Arun Patel

Author

Arun Patel

Arun Patel previously an e-commerce merchandiser, is passionate about increasing Average Order Value and spends time researching and writing about profitable tactics to increase AOV.