• Hugh McPherson

The Founder

We hear so much criticism everywhere lately that I wanted to take some time to point out a company doing thing right. Most would have thought this unlikely 5 or 10 years ago, but this iconic company has started to find success in many smarts steps adding up to giant leaps in their performance at both the cash register and on Wall Street.

I get asked where I got the idea for The Media Store, what radio station or media company inspired it? Most are surprised when I tell them the idea came from a company that has nothing to do with radio and it is one I have admired my entire radio career.

Ray Kroc was my hero and I remember seeing him in interviews and reading about his dedication to giving the little guy a chance to advance if he was willing to sweat. Ray once said, “Luck is the dividend of sweat. The more you sweat, the luckier you get.”

These words stuck with me as I started my radio career at 100.9 WXIZ-FM in Waverly, Ohio at 19 years old. I sold and was on-air but quickly learned, like Ray Kroc, that sales were my thing. My first remote was at the brand-new McDonald's on US-23 on the south end of town. I sold it and I had a portable marti unit in my car, so I was the talent too. I was making a little money and having lots of fun.

Over the years competition got fierce, as it always does, and McDonald's was attacked from all sides. This was not just Burger King or Wendy's, new "fast casual" burger chains like 5 Guys Burgers & Fries and Culver's were stealing customers.

The biggest impact was made by a surprise competitor, as the coffee giant Starbucks had the most impact on McDonald's leading to McCafe', 24-hour breakfast and a sleek design to stores with more comfortable interiors! Starbucks, now the #2 fast food chain, was having a big impact!

The road to success has never been a smooth one for McDonald's throughout its entire history. Mistakes made along the way led many consumers, like me, to find new alternatives to our once favorite burger place. The Founder was gone, so many figured the company would never recover in the face on many new competitors and America's changing tastes!

I have been using McDonald's lately as my place for good coffee, free Wi-Fi and cheap lunch. The 2 for $5 mix and match got my attention and I hadn't had a Big Mac in 15 years. So, I got 2 for $5 and they were very good. So, I returned and tried mixing the Big Mac with a 10-piece McNuggets and I was once again hooked!

I just read an article on msn.com about McDonald's roll-out of "fresh beef" Quarter Pounders in 8 cities including Atlanta, Charlotte, Miami, Nashville, Orlando, Memphis, Raleigh and Salt Lake City. Using a Tweet of video with john Goodman, McDonald's started to set the stage for this change last spring. The video logged over 3 million views!

McDonald's first store - 1954 - The Founder Movie Set

Why is this important to radio you ask? McDonald's is finding its way back by listening to its customers! They are making changes to the look and style of their stores, the interiors, the health needs of their customers and, oh yes, the food is much better too!

Many in radio are upset with McDonald's decision to drop much of their radio advertising in favor of a digital focused approach.

McDonald's, radio's long-time loyal customer's needs are changing, so they changed their approach so they can grow again! What did radio do? Complained about McDonald's mistake and blamed this decision for poor revenue result in radio. On the March 7 Q1 earnings conference call, CEO of Urban One Alfred Liggins, blamed in his company's poor radio revenue performance on McDonald's cut in advertising.

Saying that McDonald’s has “historically been a stalwart advertiser in urban radio,” Liggins explained that “they need to be called out in particular” because they switched agencies and strategy, resulting in a significant cut in the fast food restaurant’s local radio spot budget. “It affected everybody in the industry in Q1, but it hit us particularly hard because they’re a big urban radio advertiser. Black people have been a core of that consumer base for a long time and they’ve been very committed to this audience. I don’t think they’re less committed to the audience; they’re just less committed to local radio. Who knows if that ultimately reverses.”

The last sentence sums up the attitude of many in radio, especially at the larger companies who see radio as a commodity. He has no idea if it will change? Maybe he should go and talk to McDonald's and see how their needs are changing and how his company can help. Maybe he should focus on his listeners and share data about McDonald's customers to help the chain with its problems and stop trying to "pitch radio." Maybe he should be a consultant as we all claim to be and learn about their customers and give them solutions.

This is going on with thousands of current and potential radio clients everywhere and McDonald's will not be the last to make a huge shift in spending. Will radio notice these changes? Will radio make changes to help these clients? Will radio want to go back to the "good old days" and do nothing but complain? Will radio lose more important customers like McDonald's? Only time will tell what happens. Peter Drucker said, "The best way to predict the future is to create it!"

This is a huge change in consumer and advertiser habits like the shift from AM listening to FM listening in the 70s and early 80s. Unlike that shift EVERY radio station can participate in the digital changes and use them to help their current clients so they don't lose others selling these solutions!

Remember, people LOVE to buy and HATE to be sold! Package your great radio brands up with some amazing products your current clients will LOVE buying from YOU! If you don't know where to start, call us and we will be happy to help!

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