Secret of Maccas’ success? Hint: it’s not the food

BERNARD SALT

NOVEMBER 30, 2019

THE WEEKEND AUSTRALIAN MAGAZINE

Two years ago, at a business conference in Melbourne, I heard a speaker deliver some extraordinary observations about human behaviour. Steve Carroll, a sales expert from England, told the audience that a decade earlier, a McDonald’s had opened in his parents’ home town on the Scottish border. This was a big deal, because apparently nothing much ever happened in that town.

Six months after the Maccas opened, Carroll said, the local post office reported a surge in complaints about service levels. What McDonald’s had done was to raise the bar in terms of service expectations. “If McDonald’s can deliver quick service, then why can’t you?” was the logic.

Indeed, this was the genius of McDonald’s visionary Ray Kroc. It wasn’t so much the food that was critical to Maccas’ success, but the realisation that the fastest growing currency in households shifting from one income to two was time. Ever since, customers have responded to and acted upon this quite central truth about modern life.

When you think about it, most of this millennium’s breakthrough businesses have harnessed a convenience that was previously missing from everyday life. Google delivers vast amounts of information immediately. On-demand streaming services such as Netflix have led to the demise of the local video store. Spotify has centralised and mobilised access to music and Apple is reconfiguring payment systems. Uber has removed the pain of the payment process from the taxi function (this marrying of mapping technology with the internet saves just a few minutes at the end of a journey, but to customers wanting to lead a frictionless life it’s well worth it). Airbnb brings authenticity to a market jaded by formulaic hotel accommodation. And Amazon offers customers access to a product range that cannot be matched by a bricks and mortar store. Theoretically the most valuable retail floorspace is no longer a chichi boutique in the CBD but a series of stacked pallets managed by robots in a suburban “fulfilment” centre.

Customers in the 2020s will take their demand for immediacy, convenience, range and price and apply it relentlessly online in the purchase of books, selected items of clothing and household appliances. Most things will be purchased this way. Why? Because it’s a better mousetrap, that’s why.

For newspapers, the competition is no longer other newspapers but the flow of information (and ads) that pours across social media platforms. Newspapers rightly complain that their hard-earned content is being nicked by social media aggregators.

The accuracy of online information may not be up to scratch but that doesn’t worry many in the market. Indeed, not everyone is in hot pursuit of the truth; what many people want is everyday validation of their version of the truth. And where better to get that than in the cosily curated world of social media, where you need hear only admiring voices?

Even politics can be packaged to align with ascendant ways of thinking. If empathy is a rising currency, can politicians entice voters by pitching policies based on compassion?

Selling products and services, including political ideas, was far simpler before globalisation and the rise of the internet. Businesses and politicians need to be aware that Australians are now looking for opportunities to take their outrageous expectations of service in one area and – fairly or unfairly – apply them to another.

BERNARD SALTCOLUMNIST

Bernard Salt is widely regarded as one of Australia’s leading social commentators by business, the media and the broader community. He is the Managing Director of The Demographics Group, and he writes weekly co… Read more