McDonald’s has had five CEOs since 1999, and as a new one takes the helm this month, they are faced with an immense challenge.
Despite massive market penetration and a 75 year history, this brand is in trouble. It’s not that they’ve changed their product, neglected customer service or raised their prices. Instead, their single greatest problem is that millennials just do not like them. In fact, they’ve been taught all their life not to like them.
The public perception among millennials is that McDonald’s is unhealthy junk food, a problem only further exacerbated by the recent food factory scandal in China. This all important demographic has abandoned McDonald’s in droves in favor of healthier fast food options such as Chipotle and Chick-fil-A, where the food is higher-quality and the atmosphere is more to their liking.
In short, McDonald’s has a branding problem.
I am convinced that branding is the single most powerful tool companies have in their arsenal for maintaining market share and increasing profits. Building brand awareness and attracting more customers isn’t easy, but neither is it complicated.
Simply put, branding is a strategic effort to create a perception in your customer’s mind about you, your product or your organization. That perception can be positive, negative, neutral or anywhere in between. Think of a restaurant you love, a product you’ll never buy again, a store that’s made you a loyal customer for life, and the emotions you experience when you think of Starbucks. Each of those perceptions are branding.
Once we simplify branding down to perceptions, we can identify who already has a perception about our brand and who does not. We can also strategize how to repair negative perceptions customers have of us as we move forward.
Your brand is the way people experience you in every interaction. Daily we are interacting with thousands of brands and every interaction either drives us farther away or engages us closer to them. Even as you’re reading this, you’re beginning to form your own perception and opinion about me.
But as an organization, we don’t have to sit on the sidelines and just watch it happen. We have the ability to actually shape people’s perceptions of us. This is known as brand positioning: the deliberate attempt to occupy a specific place in someone’s mind.
And this is what McDonald’s has failed to do with the millennial generation and one of the reasons they posted a 21 percent drop in earnings last quarter. Watch their recent television commercials and you can easily see what they admit to be their problem: consumers believe that McDonald’s is junk food, and millennials don’t want junk food.
Innovative brands lead culture. For decades, McDonald’s has been synonymous with American culture. But instead of leading and transforming that culture, they have relinquished their brand dominance to fresher brands. These newer companies have made it their business to deeply understand the motivations, mindsets and priorities of the millennials and have crafted their brands to cater directly to them.
How is your brand perceived in the marketplace? Does your message resonate with your customers?
Don’t just look at who’s walking in the door right now. Instead, look at who will be walking in the door 10 years from now. How do you want them to perceive you? What do you want your brand to be known for? How will you transform culture?
Millennials will flock to you if they feel that you believe what they believe.
James Kramer is CEO of Pneuma33 Creative Agency, a Bend ad agency that’s looking to empower one thousand world-changing visions. They’re also excited to announce their relocation into The 1001, an innovative creative co-working space just above the Old Mill. You can reach out to them at connect@pneuma33.com or check them out at pneuma33.com
(Photo above courtesy of Pneuma33 Creative Agency)
