McDonald’s has a loyalty problem.
In 2021, the fast food chain launched its rewards program, giving frequent diners the opportunity to earn points, which could then be redeemed for free or discounted items.
The program has grown steadily over the last five years, and now boasts some 220 million active global users.
But, the company says that at any given moment there are an additional 150 million members who aren’t engaged in the program.
“They are customers who initially signed up for loyalty but haven’t visited us in a few months,” McDonald’s Global Chief Marketing Officer Morgan Flatley explained during a recent investor day talk.
Now, the chain says it has a plan to reengage those diners.
McDonald’s loyalty program is getting more personal
While McDonald’s rewards program has grown at an impressive rate, Flatley says it isn’t meeting the needs of all of its customers.
“Our 220 million active loyalty customers span a range of behaviors and needs,” he told investors. A one-size-fits-all approach, then, wasn’t incentivizing return visits the way the company had initially hoped it would.
So, McDonald’s is now planning to split its loyalty program into tiers in an effort to “earn more visits with relevant offers and experiences.”
For the most engaged fans, who visit at least once a month, the program will now offer not just savings but deals tied to incremental occasions and trade-ups on their favorite items.
“This could include exclusive benefits and access to things only McDonald’s can provide. like earning points faster, early access to limited menu items in Merch or a coveted invite to a McDonald’s launch event,” Flatley said. “These things really matter to them.”
McDonald’s wants to entice less-frequent visitors
For diners in the second tier, those who visit at least once every 90 days but not much more, the program will offer rewards tailored to their individual favorites.
“Rather than broad discounts, this includes highly personalized experiences based on the food, rituals and moments that matter most to them,” Flatley explained. “A customer who comes for breakfast might receive tailored breakfast rewards, while the family could unlock offers and experiences designed for group occasions and even share bonus points with loved ones.”
Gamification, like personalized missions and menu discovery challenges, will also be utilized at this level to encourage diners to make just one more purchase.
And for the chain’s lapsed rewards users, those 150-million-plus diners who rarely use their loyalty benefits, McDonald’s says it plans to focus on “immediate and practical” perks like birthday bonuses, free items for coming in, and new partner benefits.
“Still to come this year in the U.S., we’ll be offering Uber ride credits and Disney+ subscriptions [through the loyalty program],” Flatley told investors. “This works across all cohorts to ensure McDonald’s stays present in our customers’ lives between visits. Evolving from a points program to a partnership platform has been clearly effective for bringing customers back into our ecosystem.”
McDonald’s has already launched a version of this tiered loyalty program in other markets, like Germany, and has seen encouraging results.
“We’ve seen that with these partners… up to 20% of the customers who participate are new or infrequent loyalty customers,” Flatley said. “Personalized and more relevant offers, rewards and experiences are at the heart of our customer engagement engine that builds deeper individual relationships and earns more first choice visits.”
Why loyalty programs matter so much
Restaurant loyalty programs have seen explosive growth over the last few years and have become increasingly central to restaurants’ profitability.
Between 2019 and 2024, loyalty traffic doubled, and rewards members now represent 39% of total restaurant visits, according to Circana. And at quick service chains, loyalty members account for 50% or more of total traffic.
“Loyalty programs remain a winning strategy and have been one of the few consistently effective ways to build restaurant traffic since 2019,” Tim Fires, president of Global Foodservice at Circana, said in a statement accompanying the findings.
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“However, enrollment gains alone do not guarantee success,” he continued. “Restaurants must make meaningful personal connections and create moments of surprise throughout the year.”
As someone who eats out multiple times a week, I can confirm that I am far more likely to visit a restaurant where I’m getting something back, be it a discount on my next meal or a complimentary upgrade, than those where my visit earns me nothing.
And if the rewards are personalized to my preferences, I’m even more likely to order through an app or pull out my phone at the counter if it means getting those free fries or large Coke a little faster.
With its new rewards program structure, McDonald’s is betting that making loyalty more personal will give customers like me more reasons to come back, and give those 150 million lapsed members a reason to open the app again.
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