Five Lessons From The World’s Greatest Promotion

If there was such a thing as the Oscars for promotions, which promotion would win a Lifetime Achievement Award?

While the field has many worthy candidates, we ultimately concluded that if we had to select one promotion it would be the Happy Meal, as pioneered by McDonalds. The Happy Meal, which combines a meal deal with a giveaway of a toy for children, is conservatively estimated to have driven over $80 billion in sales since it was launched in the early 1980s. So what are the keys to the Happy Meal promotion success, and what can other business learn from them?

Five promotions design lessons from the Happy Meal

  1. Acquisition power: The Happy Meal is able to recruit new customers to the brand from a pre-school age. Few promotions could claim the same.
  2. Scalability and longevity: The offer has global appeal and is scalable across geographies. Furthermore, many promotions only run for a few weeks, driving feast and famine in the supply chain. The Happy Meal has been running for decades, with resulting benefits in efficiency and consumer recognition.
  3. Strong economics: The promotional investment of the meal deal and toy in the program is likely to be more than offset by the ‘halo’ purchase of the accompanying adults at 65%+ gross margin.
  4. Variety: Through partnerships with the likes of Disney, McDonald’s has been able to continually refresh the theme of the Happy Meal and maintain interest. It doesn't get boring.
  5. Brand reinforcement: The Happy Meal as a concept fits perfectly with McDonald’s family quick service dining demographic. In addition, the business has refocused the meals to healthy options as it has with the adult menu.

Is your promotion Oscar worthy?

The next time your business or a supplier proposes a promotion, put it through the Happy Meal Test by asking the following questions:

  • How does this promotion help me drive new customers to the brand?
  • How long can I run the promotion? Can I scale it across the different parts of my company, or will it be a ‘one and done’?
  • What are the end-to-end economics of the offer, including cannibalization, funding, and halo effects on side products?
  • If the promotion is a success, how do I keep it fresh in the coming months and years?
  • Will the offer enhance my overall brand positioning?

Only promotions with strong answers to the above are Oscar candidates. The others should go straight to video.