Have you tried the Big McAfee ?

Around the world more and more companies are constantly discovering the benefits of Enterprise 2.0. i.e through:

• Productivity and Efficiency
• Staff Engagement
•  Knowledge 
• Reputation

In The social economy: Unlockingvalue and productivity through social technologies (July 2012) report by The McKinsey Global Institute it is further stated that in 2011 72% of companies, asked in a survey, answered that they were using social technologies in their businesses. Out of these companies, non less than, 90% reported experienced benefits from the use of social technologies.

As the main finding the McKinsey Global Institute have in their report identified ten areas where social technologies can add value to an organization - the so called value levers. The ten areas are shown in the figure below. 

McDonald's befitting from social technology  

In this blog post I have decided to focus on McDonald’s and their use of co-creation in product development. 

Everybody knows MacDonald’s as a globalised company in the fast food industry and most people would properly also have voted for McDonald's as world leader with a market share of 13%.

In 2011 McDonald’s in Germany decided to engage in social technology in a very smart way.  

As a part of their constant product development and marketing events the company decided to launch a competition where people could log on to McDonald’s website and design their own dream burger.

Once the burger was designed the contestants used a wide pallet of different campaigning tools (such as banner templates) available on the McDonald’s website to create a customized campaign for their dream burger. The contestant would then use Facebook, Twitter or VZ-Networks to promote their individual campaign which at the same time would enter them into the competition to get the most votes. After a few months the top ten finalists got to present their burgers before a test jury while other contestants were able to follow the event on Facebook. The final top five burgers then went on sale at McDonald’s Restaurants throughout Germany.

Facts:                                                                                      

• During the competition a total of 116.000 burgers were designed - with the first 45.000 burgers designed in the first week alone.
•  More than 12,000 individual ad campaigns were posted on Facebook
• 1.5 million votes were registered.
• The campaign achieved more than 21 million contacts which in total meant reaching one out of four of the German population.
• The entirely event was launched and marketed through social media channels whiteout McDonald’s spending the usual fortune on advertising.

According to McDonald’s no campaign had ever resulted in so many new customers, so many promotional burgers sold or in such high total revenue.

McDonald’s has I my opinion used social technology for product development, through customer insights, as well as branding, in a very smart way with a minimum cost. Not only did Mcdonald’s use co-creation to develop 5 new burger variants, they also gained valuable customer insights, as a massive statistical foundation, in terms of forecasting how their customers think a McDonald’s burger should be composed ultimately providing McDonald’s with a tool to target their products even better.  

So let's do the math

According to McDonald’s financial report from2012 the total revenue for the McDonald’s Corporation in 2011 was 27 billion US dollars. Furthermore the report states that the European market accounted for 39% of the total revenue. Out of the total revenue generated in Europe, Germany accounted for 51%. This means that Germany generated a revenue of

27*0.39*0.51 = 5.4 billion US dollars                            

According to The McKinsey Global Institutes report, using social technology in the areas Product development and Marketing and Sales can generate extra revenue of > 0.5% and > 2% respectively.

Assuming the minimum expected growth, meaning that the revenue for McDonald Germany would only increasing 2.5%* from the use of social technology this would, however, correspond to a massive increase in revenue. More specifically:

5.4*0.025 = 134 million US dollars

This is in my opinion a pretty decent outcome of a competition that didn’t even offered a spectacular first price. In short McDonald’s Germany took a great idea and combined it with social technology and got the maximum benefits on the bottom line in return through different value levers. 

The Big McAfee

So of cause I couldn’t resist to log on to the Danish Homepage of McDonald’s and design my own burger as well. So here it is, in honor of you-know-who :-D I give you:

Now who's hungry? I know I am!!

References:
discovering the benefited of Enterprise 2.0
The social economy: Unlockingvalue and productivity through social technologies
world leader

the company decided to launch a competition

MacDonald’s financial report from2012
Danish Homepage of McDonald’s
*(from the assumption that the growth in the two areas is experienced simultaneously)