You probably have seen this by now: MacDonald’s Ups Foot Traffic 33% on Foursquare Day. Everyone loves these seemingly huge social media success stories and this one had the winning buzzwords: Foursquare, casestudy and 33% traffic increase. Econsultancy had the story direct from the mouth of Rick Wion the brand new Director of Social Media For MacDonald’s.
Speaking at the Mobile Social Media Conference earlier this week Wion described the promotion that he implemented on Foursquare Day. He said that MacDonald’s offered a chance to win 100 gift certificates valued at $5 to $10 to FourSquare users who checked in at MacDonalds on April 16th. The results sounded impressive. Econsultancy said that there were over “50 articles and blog posts written about the special and over 600,000 new fans and followers” for MacDonald’s. Wion stated that Foot Traffic was his most important metric and “With this one little effort, we were able to get a 33% increase in foot traffic to the stores.”
Mashable and a multitude of others wrote about the 33% and it was Tweeted and re-Tweeted by countless more. Then Frederic Lardinois, one of the smart folks at Read, Write, Web wrote, Sorry, But McDonald’s Did Not See a 33% Increase in Foot Traffic because of Foursquare. Their issues? The first question was about the equating of Foursquare Checkins to Foot Traffic. Gavin Dunaway from Adodtas asked MacDonald’s Wion that question in a tweet and Wion responded that indeed, MacDonald’s considered a Foursquare “check in to be the same as a person entering a restaurant;” which I guess means foot traffic. Right there it starts to get as fuzzy as Al Gore’s math.
Lardinois makes the valid observation that given Macdonald’s 28 million customers and Foursquare’s base in April of approximately 1 million users, that a 33% increase in check ins equating to a 33% increase in MacDonald’s foot traffic is mathematically impossible. But there really are some more important issues here than that. And maybe MacDonald’s didn’t want to share the specifics of their strategy, metrics and how they measured the ROI of this promotion or plan to measure the ROI of social media. However the statements that foot traffic is the most important metric and “with this little effort we were able to get a 33% increase in foot traffic to the stores” seems like too much fast and no food.
So, if you are wondering about using social media to promote your restaurant business or are wondering how to evaluate the impact of your social media efforts on your business first think about what the objective of your business, any business is: transactions, revenue, profits. The cost of social media like traditional media is an investment in your business and investments must have positive returns in order to achieve objectives. So when we start thinking about, for instance, a promotion that offers Foursquare users a chance to win gift cards for checking in at our restaurant on a given day what we really want those people to do is check-in at our restaurant and become our customers and along the way have that check-in notify that customer’s social networks that they are dining at out restaurant; even better that they had a great meal, met up with lots of their friends and won a gift card and better still that they signed up for our newsletter, became our friend and follower on other social networks and are planning to come back.
There are lots of important metrics in that scenario beginning with the cost…. in time to implement the promotion as well as the cost of the gift cards. This $1000 was insignificant to MacDonald’s but if you are going to try this at home, don’t forget to start with the costs and then set specific measurable objectives that will define success for you. And to most of us, success ultimately needs to convert to sales.
Traffic? Yes, it is a metric but it is only an important metric if that traffic generates an increase in transactions; transactions that wouldn’t have occurred without the promotion. At MacDonald’s from what we know, foot traffic could have been people walking into the restaurant, seeing if they won a gift card and walking out. At your restaurant, what would a 33% increase in traffic mean?
Check-ins? Well that is an interesting one because a check-in is important as media; it is word of mouth. A check-in by a customer at your restaurant puts your restaurant on the “radar screen” of that customer’s social networks and the size of that network, the influence of the customer that is checking in and if that check in is followed by more user generated content will determine the value of that check in. And the true word of mouth value of that check-in may not be confined to one day. Setting up the criteria for determining the value of a check-in needs to factor in the measurements that you use for your individual business including a baseline and a time frame.
A 33% increase in check-ins or in traffic doesn’t have a lot of meaning if it is a stand alone, one day event.
So, certainly for MacDonald’s 600,000 new fans and followers (and btw that info was not very precise either; was it Twitter, FourSquare, Facebook?) and “50 articles and blog posts” sounds pretty good for $1000. The 33% increase in checkins less meaningful…..33% of what? And then of course, check ins are not necessarily foot traffic and foot traffic is not necessarily an increase in revenue, especially at MacDonald’s.
Rick Wion was also quoted by EConsultancy as saying that an app is not a strategy and we couldn’t agree more on that one. Olivier Blanchard has a great series of posts on the ROI of social media and uses an acronym for Frequency, Reach and Yield….those are the kind of FRYS that belong with your social media strategy!
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- McDonald’s Foursquare Day Campaign Brought in 33% More Foot Traffic (mashable.com)
- McDonalds and the supersized Foursquare impact (broadstuff.com)
- HUGE: McDonald’s Cashes In With Foursquare Stunt – Where’s Facebook? (businessinsider.com)
- Sorry, But McDonald’s Did Not See a 33% Increase in Foot Traffic Because of Foursquare (readwriteweb.com)
{ 1 comment… read it below or add one }
Taughnee,
This is a really great post. This statement sums it all up for me:
“The first question was about the equating of Foursquare Checkins to Foot Traffic. Gavin Dunaway from Adodtas asked MacDonald’s Wion that question in a tweet and Wion responded that indeed, MacDonald’s considered a Foursquare “check in to be the same as a person entering a restaurant;” which I guess means foot traffic. Right there it starts to get as fuzzy as Al Gore’s math.”
Foursquare has about 3 million users, are we suggesting that McDonalds has 600,000 of them? If they even have half that many on Foursquare that would make a pretty lousy demographic for most independent restaurants. I thoroughly believe that Foursquare is just one big game that users play at the expense of the businesses. I guess that Mickey D’s could say that they were able to create 600,000 impressions for $1,000. Advertisers would probably tell us that is cheap advertising but other than a couple seconds of awareness what if anything does it do to create brand loyalty.
For the record, I am hopeful that QSR’s will go nuts over Foursquare! They can post their checkin bonuses, discounts, and freebies and have the herds bounce from one brand to the other. I do not see benefit for independent restaurants through Foursquare! Somebody, anybody please prove me wrong and I will send you my free video!