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McDonald’s is Bringing Back the Value Menu – What it Means for Sales Strategy

Al Davidson | Nov 17, 2017 348 views No Comments

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McDonald’s recently announced that they are bringing back their “Value Menu” in 2018. Formerly known as the “Dollar Menu,” McDonald’s is trying to offer a wider selection of low priced items to deliver everyday value prices to their customers. The former Dollar Menu was popular with customers but many McDonald’s restaurant franchise owners complained that the prices were too low to be profitable. By bringing back the Value Menu with new pricing, McDonald’s is exemplifying a variety of lessons for restaurant owners and small business owners of all kinds.

Here are a few business management and small business sales and marketing lessons from the new McDonald’s Value Menu:

Give Customers What They Want

McDonald’s used to have a Dollar Menu where you could get everyday meal items like a double cheeseburger or a package of 4 McNuggets for just one dollar. This was highly popular with lots of customers, who loved getting some low-price deals on their favorite items. McDonald’s has recognized that their customers enjoyed the Dollar Menu and so they are bringing it back in a new format.

LESSON FOR YOUR BUSINESS: Listen to customer feedback! Your customers are (almost) always right – so if they have ideas for something they’d like to see from your business, or if they love a certain feature or service that you used to provide, look for ways to accommodate them!

However, even though they’re listening and being responsive to customer feedback, McDonald’s is also showing another valuable lesson, which is…

Be Flexible on Pricing

One problem with the original Dollar Menu was that the prices were so low! And this became a point of contention for many McDonald’s franchise owners because they felt it put too much pressure on their profit margins. As a result, McDonald’s is introducing its new Value Menu with a variety of price points: $1, $2 or $3 items. This can help provide more of a cushion for the restaurants’ profit margins while still giving customers a good value.

LESSON FOR YOUR BUSINESS: Pricing strategy matters! Sometimes making just a small increase in price can make a huge difference in your overall profitability. Don’t offer loss leaders unless you have a clear plan for how your low-priced offerings will drive profits among your higher-margin products.

Go After Different Customer Segments

In the past few years of the fast food industry, there has been a rise of “fast casual” restaurant chains like Panera and Chipotle and Shake Shack offering food that was perceived to be higher quality (and higher priced) than traditional fast food. As a result, for awhile in recent years, it looked like McDonald’s was becoming out of touch with the trends toward higher quality burgers. But McDonald’s has adapted and recovered – its McCafe coffee menu has proven popular and its all-day breakfast menu has been well received, and McDonald’s is experiencing an upswing of sales momentum. The resurgence of the Value Menu is a sign that McDonald’s is not forgetting about its cost-conscious customers who might not want a premium coffee, but who want a $2 burger.

LESSON FOR YOUR BUSINESS: You don’t have to bet your whole business on just one type of customer. Not every customer is right for your business, but you can probably find ways to serve multiple types of customers with different offerings or different price points. Just like McDonald’s is targeting more affluent customers with premium coffee, it’s also making room for the cost-conscious lower-budget customers who want that everyday Value Menu.

McDonald’s is one of the biggest and most influential fast food brands in the world, but no matter what business you’re in, you can learn a few things from this latest pricing strategy. Go after multiple customer segments. Develop a smart, profitable pricing strategy. And most of all, keep listening to your customers and building relationships with them – that will keep your business thriving no matter what’s on the menu.

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