I went into a McDonald’s yesterday and said, “I’d like some fries.” The girl at the counter said, “Would you like some fries with that?”
Jay Leno
McDonalds is a food powerhouse. With over 71 years of service, this company has a history of being popular, and leading the fast food race, and inspiring dozens of chains to go national, and even international. Their food always comes under criticism, but the company continues to reinvent itself, and make a product that is always better than what is expected. However, in the last year, the company has lost power, and was usurped as the #1 franchise by sandwich chain Subway. Despite these changes, Mcdonald’s power in the field of fast food is enormous, but we largely underestimate their ability to innovate.
The best example of this is their yearly sweepstakes, Mcdonalds’ Monopoly. Based around the popular board game Monopoly, this sweepstakes has you attempt to find small game pieces that resemble famous slots in the game. You can get these pieces at any everyday Mcdonalds, on most menu items. If you manage to collect all three of a certain color, you can turn them in and get a prize. These prizes vary in size, from a $200 Spa certificate to even a million dollars. But that’s not all. The company provides a number of other prize types, including food, rentals, coupons, and much much more. When we look on it from the outside, it seems like an expensive endeavour, but there is actually a lot of value in it.
You see, the company has a unique distribution system for it’s tabs. The company produced a lot of 2 out of the 3 tabs needed for a certain prize. This makes the collecting process look fairly easy . Everything feels like you have a winning chance. However, your endeavours are blocked by a simple change in distribution: There is only a set amount of the 3rd tab, and they are very, very rare. So, if you’re able to get that final tab, then you are in a great spot.
Now, does that remove the odds of you winning? After all, the company does state up front that you have a “1 in 4″ chance of winning.
The catch is that this is 1 in 4 chances is talking about the chance that you’ll win a small prize. You’ll get something financially insignificant like a free fry, or a free Redbox rental. But you’ll also get a feeling that will send you flying. You’ll start thinking that you have a “lucky chance”and that you will play again, just to see if you can win again.. And you’ll spend more and more, in order to increase your chances. The whole system is built around our desire for the “Thrill of the Win”.
And that’s the genius of it. All the Mcdonalds corporation has to do is invest money into these prizes, offer up chances to win, and they receive an sudden increase in their income. What’s an even bigger deal is that people often toss these tabs away with the rest of their food. So, the recipitent of the winning tab won’t know it, and will lose all her potential money because of it. That money stays in the Mcdonalds budget. Also, the company doesn’t lose any large portions of money, since they pay out the winners in increments of 50,000 a year, for 20 years.
Mcdonald’s Monopoly makes a lot of money, while offering a opportunity for the consumer, if they are lucky enough to receive the winning game piece. It’s well orchestrated in a way that makes it unique among many other companies. So, I recommend checking out some of the other economic and sociological studies of this phenomenon.
If you are interested in learning more about how to succeed in the game, check out Bargaineer’s piece on Mcdonalds’ Monopoly. Also, you can check out this economic study done byBusiness Pundit and the blog Human Ventures. Both bring a lot of insight into the economic and the human equation.
And of course, you can find out more at http://playatmcd.com
Please note: I don’t support obsessing over this game, or any sweepstakes. Your chances for victory are very little. However, I admire the innovation it took to create and use the sweepstakes effectively.