The thesis supported was that "rightly from his point of view" that: "If I start giving away coffee, I'll close shop here, you don't make money by giving away stuff.. THEY'RE CRAZY!"
McDonald's Coffee Strategy
Anyone who has a commercial activity of any kind should carefully evaluate 2 fundamental aspects:
CUSTOMER ACQUISITION COST : How much does it cost me to acquire a new customer in terms of marketing expenditure? (of any kind, if I have not allocated any budget for marketing I have a serious problem, much bigger).
THE LTV (Life Time Value) OF THE CUSTOMER : How much can nigeria whatsapp number data 5 millionthat customer bring me in terms of “USEFUL LIFE”?
Obviously all this is counterintuitive and often generates conflict in our way of thinking, because in fact we need to "digest" a fundamental concept:
THE CUSTOMER MUST BE PAID
and yes, whether we are aware of it or not, acquiring a customer always has a cost to pay!
Let's now try to hypothesize some numbers that are completely exemplary for the specific case of McDonald's:
COST OF FREE COFFEE: 30 Cents
FREE COFFEE DISPENSED BY 1 SALES POINT: 100, therefore total promotional cost 30 Euros (only “live” cost)
NEW CUSTOMERS: n. 1 (Let's assume that only 1% are actually new customers who don't go to McDonald's regularly or have never been there)
LVT (Customer Lifetime): €30 (Let's assume an average customer eats 3 meals of €10 in 1 calendar year.)
In fact, by investing 30 Euros in this promotion, McDonald's gets 30, so nothing in immediate monetary terms, but in fact it has 1 NEW CUSTOMER!
He then created a SYSTEM (Funnel) to ACQUIRE NEW CUSTOMERS at ZERO COST!
Returning to the Barista's reasoning, but it is valid for any Business , we must never evaluate a customer on the basis of the dry TRANSACTION he makes on a single purchase but always evaluate him from a RELATIONAL and recurring LVT Business perspective (how much it brings me in 1 year for example).
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