Question

5-McDonald's “Seniors” Restaurant Lisa Aham manages a McDonald's restaurant in a city with many “seniors.” She has noticed that some senior citizens have become not just regular patrons. Many of these older customers were attracted initially by a monthly breakfast special for people aged 55 and older. Every fourth Monday, between 100 and 150 seniors jam Lisa's McDonald's for the special offer. But now, as many as 100 are coming every day—turning the fast-food restaurant into a meeting place. Lisa's employees have been very friendly to the seniors, and it is part of McDonald's corporate philosophy to be friendly with its customers and to give back to the communities it serves. These older customers are an orderly group and very friendly to anyone who comes in. Further, they are neater than most customers and carefully clean up their tables before they leave. Most of the older customers leave by 11:30, before the noon crowd comes in. Quetion:Refer to the attachment on Seniors McDonalds. The customer lifetime values are likely to be lower with Seniors. Does it make the seniors segment less attractive? What are the options? Suggest some ways to create additional “values” that the franchisee can create for the seniors group.

Answer 1

The customer lifetime value is likely to be lower for the seniors because the overall lifetime is lower for the seniors' group. However, the paying capacity of the seniors are also more and so present value of their overall payment may still be higher than most other customers. Moreover, the customer retention cost is lower for this group of customers. So the seniors form an attractive segment of customers based on the above factors.

Additional options for the store could be to create additional options for the seniors which would include:-

1) Delivering food to their home as per their demand

2) Organizing meetups in different venues and arranging the food and venue management for them and for that they can charge the seniors extra thus augmenting their value for the store.

3) Another example could be that the store could provide an additional kiosk for the purchase of groceries, medicines etc. for the convenience of the senior group. The store can get additional revenue from this service.