From its humble beginnings as a single restaurant, McDonald’s has become one of the world’s leading food service brands with more than 36,000 restaurants in over 100 countries. In an interview with ANA and WARC, Morgan Flatley, U.S. Chief Marketing and Digital Customer Experience Officer at McDonald’s, and member of the ANA’s Global CMO Leadership Coalition, talked about how the brand has pivoted during the pandemic.
1. What does the “new normal” look like to you on a day-to-day basis?
I don’t think any of us know what “normal” will look like and when we will be there. We have talked internally that we will keep having what we’re referring to as “next normal” because — my gosh — what’s happened in the last week with the senseless killing of George Floyd and the demand for social justice against racial inequality. We’re on to a next phase.
But your question was around my day-to-day. Like most CMOs, my time is blocked solid and spans everything from how we’re approaching reopening restaurant lobbies, operations procedures around cleanliness, and thinking about the menu to much more, like functional marketing focused on our messaging, our investment strategy, the question of how the media landscape is changing, and questions around the upfront.
Another piece that’s different — and I hope we will take this into the future — is how frequently we’re connecting as leadership teams. We’ve gotten into a powerful rhythm of frequent communication that’s helping us be much smarter and much more connected, solving the business problems.
2. How has COVID-19 affected your marketing messaging? What changes have you made?
One thing we’ve been talking about a lot is how we use this to accelerate some things we want to hold onto. There are four things we’ve started to focus on:
• The frequency and cross-functional nature of how we’re connecting. We’ve put aside silos and boundaries and are connecting with great frequency across our business.
• Moving more quickly on important things. At times we can be a slow organization because of the size and the scale, and now we’re moving quickly on important things.
• Putting the customer at the center of every discussion. We start every week with the insights team sharing customer sentiment. We start every operator meeting grounded in the customer. It’s forced us to really look at our customers and what they’re doing behaviorally and attitudinally.
• Becoming incredibly focused from the leadership level down into the organization. I think part of the challenge at McDonald’s is we can do so much. We typically ran up to eight distinct messages in a quarter and now we’re down to just a few. We’ve become more focused on singular messages grounded in what the customer needs. When the pandemic began, we started with a message around focused on availability: we are open and you could access our food through our drive-throughs and delivery. We pivoted to a more emotional message, celebrating that people were still enjoying our food, but in this new socially distanced world. We then went to a message around Thank You Meals that supported frontline responders. Through all of this, we’ve let the consumer guide our messaging. It’s been much less promotional and much more about the emotions of our consumers and how we reassure and support them today.
3. How are you incorporating customer insights in the day-to-day, and how is it different from before?
The customer insights team reports to me and they are driving both our marketing plans and our business plans. We’re reporting weekly to the senior leadership team in terms of customer KPIs for each phase of the crisis. We share weekly with agency partners and marketing. In the past, it happened probably quarterly, definitely not with the same frequency as today.
What’s so interesting for our business is the pandemic is so localized that we’re sharing data down to the county level to guide our decision-making. Data is at the core of our decision-making more than it ever has been before, across all functions, not just marketing. There’s no playbook for this, so it helps to put data and insights in much more of a driver’s seat then we ever have.
4. How have you needed to change your media channels now that the ways you’re serving customers are so different?
We’ve made a number of shifts, both in terms of level of investment in the early stages, where we scaled back how much media we had in the market just because traffic was down, and in terms of our media vehicles. Obviously, there’s been a tremendous amount of television, video, and digital. We’ve been focused on those channels and pulled back on some others while people are staying home. What has been fascinating is working to find our voice in social because there’s great awareness of that channel — that has been great learning for us. We’re really monitoring what’s happening and we continue to evolve.
While we can’t be certain what will happen, we keep discussing with the senior leadership team what behaviors may stick — the changes to online ordering, the acceleration and engagement on mobile, and delivery. We’ve seen a big uptick in delivery ordering and the ages of people who are engaging in it. Older consumers are starting to use their phones for ordering or use delivery because they’re concerned about safety.
5. Speaking of safety, how are you going to the next level to enhance that feeling of safety for customers?
Throughout our 65-year history, we’ve held ourselves to the highest standards of hygiene and cleanliness, and that has continued. We’ve introduced 50 new operations procedures for crew and customer safety in restaurants. We just created an ad that goes through the procedures we’re instituting around safety and cleanliness. In the first week of the crisis, we thought, “We’re not going to talk about safety procedures. Our customers aren’t interested in that messaging from McDonald’s.” Our tone has changed to the degree where we shot an ad, which shows crew coming in and going through the procedures in the restaurant in a really lovely way. It’ll be used regionally. It’s about how we communicate the procedures that we’re going through in the restaurants, so customers have that confidence, how we explain it as they go through the drive through, how we reinforce it at our order points. We’re doing a lot of work on the app around contactless purchasing, and what contactless customer journeys we can accelerate. We have to look at the customer journey because it’s changed from where it was two months ago.
6. How were you able to focus on the brand during this time? It’s classic recessionary advice, but internally that can be a very difficult conversation to have when there’s short-term pressure on sales.
I think you’ll see us do both as we start to get back to our full marketing calendar. In the past we have only done the promotional message. A few things have happened specific to McDonald’s that have helped us with brand during this time. One is we have a new agency; we moved the business to Wieden and Kennedy New York at the beginning of the year. One of the silver linings of this is that through COVID they helped us find our voice, and there’s been tremendous support from our franchisees and my team for the way we’ve expressed our voice. COVID gave us a moment to really do it, with an agency that is particularly good at helping brands find their voice.
We have to do both — promotional and brand-building. The true test will be in three months when all of our competitors are out loud, when there’s a fight for share. We keep saying it’s going to be a real street fight for the restaurant industry because there’s going to be desperate players, so that will be the real test. But I believe we will hold firm on ensuring we boost the business while we continue to focus on the brand. I don’t think they need to be mutually exclusive.
7. Are you finding that when you’re at senior leadership team meetings, your role at the table is different, and even more elevated, than it was pre-COVID?
I’ve experienced it, but I haven’t put it into words yet. Who would have thought that a global pandemic would make this happen? We’re all sitting in our homes, and yet it’s made us a high-performing team. Because we’re going so quickly, people are out of their swim lanes, out of their sandboxes providing feedback. It’s welcomed and it’s making us better. Typically, marketing would just run in its own silo, and I’d go to the leadership team meetings to keep abreast of the business and talk about critical pieces, but marketing is much more front and center.
What’s also been interesting is how our brand shows up right now, and the two best examples are the Thank You Meals where we gave away more than 12 million meals to first responders. And then the brand statement, donation, and commitment we put out that we don’t stand for racial inequalities. The leadership team has really looked to me and my team for how the brand navigates this, and typically, we wouldn’t take some of these risks. We wouldn’t be discussing them in that type of forum. It was so wonderful when I shared that work, to have the unwavering support of my peers and have their thanks and appreciation. For an operationally driven organization, marketing has taken a much stronger seat in a lot of these conversations.
8. What are you thinking about in terms of long-term brand building this year and then into 2021?
As a marketing organization, we’re spending time on how we plan scenarios for the tremendous uncertainty and how we think about managing through the next 12 to 18 months.
But the other piece concerning the brand is so interesting. With the beginning of COVID, there wasn’t as much selling of things, and so I think it forced me to reflect on the brand. Not the chicken promotion, not the burger thing… what’s the brand? Somehow, we found our voice in this. So the question is, how do we retain that as we go into the next 12 to 18 months? Because I do think brands are going to play a really important role in our society, more than maybe we did three months ago when the economy was booming.
I think brands are going to make a difference. We are putting the customer at the center; that’s what we keep talking about with our franchisees. We’ve got to think about where our customer is going to be in three months. It’s going to be a very challenging world that we’re emerging into, based on the racial events and the unrest over the last week. And I think brands really have to think hard about how we navigate this. 9.What big goal can we aspire to as an industry that creates more opportunities for you and for the societies you serve?
I think racial diversity — the diversity question. How we are going to build a society that is better for all people? I do think brands and CMOs and marketing can play a big role in that, and I think we should take it on. We risk going into a very unbalanced, unforgiving society if we don’t step in and help shape it. And I think part of what I’ve seen in the peaceful protests is that there’s different colors, different races, different ages, all genders who want that to happen. So that’s part of what I’m inspired by and hope that the marketing community and brands can help to drive.