McDonald's
Fatburger
“Economies of scale.”
“Predictability — the product is the same regardless of the market.”
I’ve long been bemused by people who hold up the McDonald’s restaurant business model as one to be followed by radio stations.
In fact, you’ve probably heard someone — either at a convention or in a boardroom — hold up that model as one for your company to aspire to.
McDonald’s doesn’t make much money when they sell one of those miserable little hamburgers. So to make a lot of money, they’ve got to sell a whole lot of hamburgers.
They don’t offer great taste or a pleasurable dining experience.
They offer “dollar menus.”
“Dollar Menu” = “Cost Per Point Radio.”
If you play that game, whoever charges the least wins.
And when lots of others compete with you on price, you have to resort to promotions that further erode your profits: giving away plastic toys, conducting sweepstakes (which, sadly, occasionally turn out to be rigged), etc.
On the other hand, there’s Fatburger, which I have patronized for 25 years now.
Their burgers are a LOT bigger than McDonald’s.
And a LOT tastier.
And a LOT more expensive.
How much more expensive?
You know what? I don’t even know, because I’m not thinking “price” when I go to Fatburger. I’m thinking “taste” and “satisfaction.”
If your radio station aspires to nothing more than doing what every other radio station does, in the same way that every other radio station does it, you don’t get to charge premium advertising rates.
Instead, you get the pleasure of being bullied by 24-year old media buyers who — to quote Randy Michaels from his legendary PD GRAD SCHOOL presentation — “don’t even know how to operate a radio.”
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Good point Dan. I’ve heard this “McDonald’s” argument before but anybody who sees Mickey D’s marketing strategy as only cheap burgers is really missing it. They have a great product! I like Fatburger too and will gladly pay the money for one when I want one. But every now and then I want a Big Mac because I like them. If I didn’t like them I would I wouldn’t buy one if it was 5 cents.
ugh I love this site!! thank you for this Dan!
“You know something is gonna happen, you just don’t know WHAT.” Of course we know! The GM needs to make his bonus and we’re gonna get fired. 🙂
The In and Out Model is the better one..pick a few things to do well, and do them well every time..the menu is limited..its hamburgers, fries, shakes, soda..but every time I’ve visited the store near the Las Vegas Strip, the place is SRO..because the food is that good..everytime..
I would use the “Disney” or “Starbucks” model for radio (at least when it comes to the customer’s experience and service).
I agree Rick. When I leave Disneyworld, I feel like they wanted my business. When I leave McDonald’s, I feel like I’m just a timed acquiry to get in and out as fast as possible.
McDonald’s isn’t about cheap burgers – and bash their business model all you want, they’re still the ones who turned the phrase “do you want fries with that” into an exta $135 million in sales! McDonald’s also happens to believe in Radio and uses it effectively across the country. Quit dogging them and stop arguing with success! Excuse me – I have to stop at my neighborhood McDonald’s and pick up a GREAT cup of coffe that DOESN’T cost $2.50.