The McDonald's Effect - how upsells drive $100M+ in extra revenue

It’s Friday night, 6pm. You’ve been driving for three hours and have another two hours to go. The advice you’ve been hearing echoes in your head: never arrive anywhere hungry.  You see there’s a rest stop three miles ahead. 

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You exit the highway and park your car.  The Golden Arches are smiling at you. You enter the McDonald’s and walk up to the counter.

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“Can I have a Big Mac Menu?”

“Would you like a large menu?”

“Sure”

“A large coke?” 

“Yep”

“Do you want to add any sauces?”

“Mayo and ketchup please”

“We have a McFlurry promo: half price when buying a Big Mac meal.” 

“That sounds great, I’ll have one.”

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In that short conversation, you went from ordering $10 worth of food to ordering $18. +80%. That’s the McDonald’s effect. All their customer-facing employees are trained to upsell.

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In ecommerce, the same is happening. Stores are gearing up to give the customers easy options to buy more.

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Ecommerce 1.0:

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Ecommerce 2.0:

Why does this work?

• Customers are already in buying mode when something is in their cart. Easier to buy more.
• Reacquiring customers can cost a lot
• Higher AOV
• Higher ROAS
• Reinvest extra profit in channels
• All channels become more profitable