McDonald's just dealt another blow to Starbucks' troubled loyalty program

McdonaldsJustin Sullivan/Getty ImagesMcDonald’s is building a loyalty program.

McDonald’s is building a loyalty program into its smartphone app.

The program is still in its early stages, but it will likely reward customers with deals based on the number of visits they make to McDonald’s every month, Nation’s Restaurant News reports.

The program will also track customer purchases and learn their menu preferences, McDonald’s USA President Mike Andres said at a conference Wednesday, according to NRN.

So if customers haven’t visited McDonald’s in a while, the app may prompt them to return with promotions on their favourite items.

Starbucks’ app currently rewards customers for every visit they make to one of the coffee chain’s stores, which is how McDonald’s is considering setting up its program.

Starbucks recently came under fire however, after announcing that starting in April customers would earn reward stars based on the amount of money they spend at Starbucks, as opposed to the current system of one star per visit.

“If we see a thawing off, we can entice them with their favourite products to come to the restaurant,” Andres said, according to NRN. “That’s the future of customer relationship management. We think it can be a significant sales layer for us.”

The loyalty program will likely be rolled out late this year or early 2017.

With the new program, McDonald’s is following in the footsteps of Starbucks, which has one of the most successful loyalty apps in the retail industry.

In the last several years, the coffee chain’s mobile orders have grown to represent 20% of all its US sales.

That’s a remarkable feat. Retailers have been trying and failing for years to get customers to interact with them on their mobile devices.
Many Starbucks fans are upset that the new loyalty program will reward customers who get more expensive drinks like lattes, while essentially punishing those who just get black coffee — which is Starbucks’ cheapest drink.

McDonald’s is likely hoping that any customers that Starbucks angered with the changes will switch to McDonald’s coffee and loyalty program instead.

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