Should McDonald’s Kill The Pickle?

Has anyone ever bought a McDonald’s hamburger because they wanted the pickle?

According to McDonald’s – the company sells 225,000,000 burgers worldwide each year. 75 per second!

At 10 seconds per pickle per burger for producing, transporting, managing and serving the pickle – that’s up to 71 years of peoples lives wasted (per year) on McDonald’s pickle habit. (A lifetime wasted every year!)

At 5 cents per pickle to produce, transport, manage and serve – that’s $11.25m of pickle expenses per year.

And why?

All so picky-eating pickle-flickers and flick their floppy pickles onto McDonalds’ clean windows.

If McDonald’s removed the pickle – I doubt there’d be protests in the street, with millions of pickle-munchers shouting “Bring back The Pickle!”

In fact, I doubt McDonald’s would see their sales suffer at all.

I reckon those pickle-munchers are fickle-pickle-munchers. They’d still buy the burgers anyway – pickle or not.

And McDonald’s would save millions of dollars – and decades of wasted time – each year.

The Price To Be Paid is Bigger Than We Often Think

Every feature you offer comes at a cost.

Not just a financial cost – but a cost of effort, a cost of attention, and a cost of positioning too.

It’s easy to ignore the cost of providing a feature when you’re so focussed on marketing and sales.

After all, it’s always a great idea to “value-stack” and “over-deliver” and offer your customers more and more if you’re concentrating solely on the sale!

But at some point, it pays to look at your products and offerings under the harsh light of their cost.

And this could lead you to retire entire products – or product offerings.

Burning Money with Jet-Fuel

Recently, American Airlines retired their SkyMall catalogues – perhaps the most well-known magazine in the sky!

Ignoring the time and labour cost of providing the magazine and placing it within reach of every seat of every plane – or the costs of producing and printing – just flying around with tonnes of printed magazines was estimated to be costing the company $350,000 per year in fuel costs alone.

When examined under this light – American Airlines made the ruthlessly practical decision to stop printing its SkyMall catalogue permanently.

REAL vs IMAGINARY Wants and Needs

Similarly, you can retire a single uneconomical (or marginal) feature of a product, service or offering.

The reality of all products and services is that there’s a very narrow band of core features that directly provide the outcome the customer is looking for.

McDonald’s burgers, for example, aren’t about the pickles. Or the burgers. They’re about the customer’s need for hunger-satisfaction and convenience outcomes. McDonald’s could have easily addressed these needs for convenience and hunger-satisfaction with fried chicken (as KFC did), or home-delivered pizza (as Domino’s did).

Beyond the narrow band of features that address the core outcomes customers need to address – there are the features that you (as the business owner) BELIEVES the customer wants…

…And the features that the customer ACTUALLY wants.

Often, there’s less intersection between what the customer wants, the customer needs, and you believe they want than you’d think. Even when asking customers what they want! (As Henry Ford once quipped, “If I had asked people what they wanted, they would have said faster horses.”)

Yet each one of the features you provide that do not necessarily fit what the customer wants AND needs in order to achieve the real and desired outcome has a cost to provide.

The Quick Way to 10% Better Margins

If we’re looking at improving Margins by 10% within the 7 Levers structure – the easiest and most effective way to do this is to look for features and offerings that cost a lot – but do not deliver a lot of value to the customer.

This value could be either in the utility they provide in achieving the outcome, in their utility in attracting the customer’s attention and desire for what you sell, and/or in the offering’s financial value to you and your business and the direct profit margin it delivers.

And the cost needs to account for the real financial cost of providing the offering – as well as the opportunity cost of providing the offering instead of focussing on other areas of your business, or other offerings.

(Taking into account the opportunity cost, you’ll quickly discover that even marginally-profitable offerings might not be worth your time – when you could be focussing on much more profitable opportunities in your business.)

“But Brent! I don’t want to upset my customers!”

You won’t. If you do this effectively.

  1. If the costly offerings or features that you provide aren’t valuable – your customers won’t miss them.
  2. If you’re offering products or features at a loss or marginal profit – you’re not serving any valuable need anyway – and shouldn’t be too worried if those customers go to your competitors. (It’s win-win-win: You’ll get to deliver higher value outcomes and make bigger profits; your competitors will be happy to pick up your worthless crumbs; and the few customers you lose will be better served elsewhere anyway.)
  3. And you don’t need to remove offerings from existing customers anyway. At least not initially. You can remove features in a staged rollout – and test the effect of removing them with new customers.

Achieving success in the Margin lever is all about being part ruthless cost-cutting bean-counter – and part customer evangelist, understanding and advocating for the true and deeper needs and desires your customers have most effectively and most sustainably.

And – like all of the 7 Levers – there’s a process for getting this right.

Are you about to miss out?

We’ve made it through all 7 Levers – and it looks like you STILL don’t have a copy of the 7 Levers and the Growth Paradox whitepaper yet.

I’m a little saddened that you’re missing out – especially since you’ve been reading this short snippet of the type of insight you’ll get in the whitepaper, as you’ve read this email. However you know yourself better than I do – and know whether the whitepaper is right for you.

If you’d still like a copy of the whitepaper, this might be your final chance. Download a copy, have a flip through, and see if it’s something worth applying to your business. (I personally think it’s a hugely valuable concept – given it can very quickly and easily double your business profits.)

If not – that’s OK too.

Until next time,

Brent Hodgson

about-pete
Pete Williams is an entrepreneur, author, and marketer from Melbourne, Australia.

Before being honored “Australia’s Richard Branson” in media publications all over the continent, Pete was just 21 years old when he sold Australia’s version of Yankee Stadium, The Melbourne Cricket Ground For Under $500! Don’t believe it? You will! Check out the story in the FAQ section (it really is our most asked question).

Since then, he’s done some cool stuff like write the international smash hit ‘How to Turn Your Million-Dollar Idea Into a Reality’ (+ the upcoming ‘It’s Not About the Product‘) and he’s created a bunch of companies including Infiniti Telecommunications, On Hold Advertising, Simply Headsets and Preneur Group.

Lots of other people think he’s pretty good too! He’s been announced as the Global Runner-Up in the JCI Creative Young Entrepreneur Awards for 2009, the Southern Region Finalist in the Ernst & Young 2010 Entrepreneur of the Year, and a member of SmartCompany’s Top 30 Under 30.

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