Steve makes a spreadsheet of McDonald's points

So, Tyler, you remember, uh, episode like 18? This is like half of the lifetime of the podcast to go. But, but,

Oh yes. The Dark Ages.

the episode called Optionality. And, uh, it, uh, in the cold open, I asked you if you had any like weird things that you use spreadsheets for,

Yeah.

Uh, and, and, uh, my example was not actually super weird. It was like keeping track of my utilities or something. But I came up

Yeah. Neither was mine. Neither was mine.

I came up with a, uh, a weirder one, more esoteric, that's also kind of silly, and it's McDonald's Rewards Points. Can we talk about that? Today.

Oh, Steve, we have to talk about that. I love McDonald's and their reward points.

All right, let's do it. Hello there, dear listener. I am Steve.

And I'm Tyler. And welcome to another episode of It's Not About The Money. It's about the points, the podcast where we help you gain the clarity you need to run a successful small business.

Tyler has a financial coaching practice, and I run a tax business. We are both small business owners like you, and this podcast is our exploration of entrepreneurship, one episode at a time. Alright, alright,

we're talking about McDonald's.

So, McDonald's has an app, and if you place the order in the app, or if you like, give them the code when you're in the drive thru, whatever, you can accumulate points. And these Points are eventually, perhaps, worth something.

Oh, I'm familiar, Steve.

Okay, so, so the other day I got curious because it's like, uh, hello, you have, you have, uh, you know, how are many points, I forget the number, expiring at the end of the month. And so that, uh, triggers my brain of, Oh, I got, I gotta go spend these points before I lose them, you know, because, you know, what are they? They're, they're made up internet points, but they are actually worth something. And so I was curious, like, How much are these worth?

And they were different.

yeah, they're different. Uh, that also surprised me. Uh, like, the one inside the Walmart is the most expensive.

Interesting.

a, there's like an 8 difference between, if you bought one of each of all of these items, between the cheapest one and the most expensive. Franchise $8 difference. Fascinating

There's like a couple reasons that's interesting to me and one of those is I I've noticed I mean I've never made a spreadsheet about this or thought too much about it But I pretty much order the same thing almost every time I go to McDonald's and it often is a different total when I check out and I've always thought that's kind of weird like are they doing uh, It'd be interesting to learn more about this like um, Like what are their pricing model is like does it depend on the time of day?

Oh yeah. I,

I have no

know. These are all questions we can answer with, uh, enough crowdsourcing of the, uh, the data and a large enough spreadsheet.

Oh my

It probably also depends on the franchisee as well, because, uh, very few of the McDonald's locations and probably none of the ones around me are owned by McDonald's corporate.

Right.

They're all franchised.

And some of the deals that I see available in the app, um, are only available in certain locations on certain days as well. So who knows what's going on in the AI. And the algorithm of McDonald's. Anyway. Okay. Sorry. That was a distraction. Go back to

so we got all those prices, and then, uh, I made a column after that that's called the average cost. So just, like, across all of these four locations, because I go to all of them, and it just depends on the day, but whatever. Make the average, uh, the, the arithmetic mean. And then, uh, The thing that I wanted to know is how much are the points worth? How much is each point worth?

Like in US dollars, basically. Okay.

So I take the point cost for each row. So the McChicken is 1, 500 points. The average cost is 1. 99. Divide 99. That's, that's, uh, 0. 133 cents per point.

or okay. Cents 0. 133 cents. So really,

a tenth of a cent, and they, and they're all, like, the, the average here is they're about a tenth of a cent. Were you gonna say something else?

no, I'm just marveling at your dedication to this question.

Okay. So, we have that piece of information now. My second question was, uh, are some of these items a better deal to buy with points than others? And the answer to that is yes, uh, let's see, the one that has the highest average point value is the cheeseburger, actually, which costs 1500 points, but its average cost near me is $2.14. Which you'll recall is higher than the McChicken at 1. 99. And so that makes the average point value 0. 143 cents.

Oh my goodness.

So if you're trying to, uh,

Sorry, this is amazing.

optimize the, uh, the dollar value you're getting out of your points, the cheeseburger for me at the moment, uh, looks like the best deal.

Okay. So I, uh, I'm thinking right now of a few members of my family who need to be, to, to receive this information because that's actually what they get every time is a cheeseburger.

Oh, well, there you go.

but I would have to do the same math, I guess, for my area too, because I'm in a different state, different locale. Who knows?

I would be interested to know if it is different or if, or if like this, uh, general trend holds, even if the prices are slightly different.

mean, I could do it. I have a lot. Yeah, too much experience with McDonald's app. I'm not committing to you, Steve, though. I'm not committing to do this, but I'm, you know, it could happen.

Another thing that was interesting is that it, it wasn't, like, it wasn't uniform across all of the items for the more expensive versus the less expensive locations. Like, some of the items are a little bit more, and some are a little bit less. So, there's, there does some, seem, seem to be some pricing magic going on in there.

Yeah, that's fascinating. Some of these price differences are pretty big. Like the Happy Meal.

The Happy Meal is a big one. Like, it can, it could be 6. 79, or it could be 4. 69.

Yeah, that's wild.

For a, that was like a six piece. McNugget, I think. I just did the most expensive Happy Meal.

Oh, okay. So there's different kinds of Happy Meals. That's a good point. That's a good point. I was like, my mind was off to the races. It was like, okay, is it because kids, people take their kids shopping with them at Walmart and so they have to walk past the McDonald's so there's like supply and demand and

That, that thought had crossed my mind, yeah.

whew, I mean. Okay, so this is interesting because even though you've found the optimal way to spend points in terms of getting your money's worth, we're talking about very small amounts of difference, tenths or less of a cent, right? So I don't need to have anxiety about this, probably,

no, no, no.

when I'm deciding what to spend my points on.

Right. Like another question that, uh, I've been interested to answer, but have not yet done run the numbers for is like, how does, how does using points or using deals? We haven't even talked about deals in the McDonald's app yet, but like the deals are another thing. Like how does, uh, using one of those affect the total cart value for a meal?

yeah,

If I get the. The cheeseburger for 1500 points, but then I also buy fries and a drink. Would it have been better for me to do the like 20 percent off everything over 5 thing instead?

Yeah. And of course, uh, at least this is how it is where I'm at. I assume it's probably universal, but they limit you to using either one deal or one points redemption per order.

Mm hmm.

Or maybe that I know of, maybe it's per day. Like, could you do multiple orders and drive through the drive thru a few times? This is getting kind of crazy.

uh, you can. And, uh, I have done that

Steve.

on, no, it was, it was, no, it was, it wasn't the same McDonald's. It was like, I was on the, on a drive home. So I got like the, the McChicken here. And then I got, uh, uh, an ice cream cone later or something,

Okay. Okay. Okay. That's amazing. I love, this is, this is my favorite episode already. And I, I'm obsessed with this. Yeah, I, um, so I've had a much less robust way of testing this out myself. Um, if our listeners haven't figured this out by this point in the episode, well, they're going to know now I go to McDonald's a lot. Okay. Apparently so does Steve, but, um, like I've noticed, you know, I, my, my typical order is usually like a McDouble and a large fry.

you're getting the real time prices, which

but I'm getting the real time prices.

might, might be different every time.

That's true. And actually that particular order, I don't even think it adds up to over 5. So I think that must be what I'm splurging. Cause, uh, sometimes I like to get a quarter pounder. Instead of a McDouble, if I'm feeling kind of bougie,

Yeah

you know, which is more expensive, quite a bit more expensive. Uh, anyway, this is now sounding like a confessional. I don't know, but

Yeah, if he should we relate this to business somehow I mean I had some some thoughts or we could just leave it

I mean, I was just wondering if we should relate it to weight loss because unbelieve, so I eat at McDonald's a lot, but it's actually like kind of part of my, uh, this is so weird. It's part of my current health plan. Believe it or not. Oh, let's just say I fit it in the budget. Uh, I just like that they have all the calorie amounts like listed out. So it's very easy to. Track how much you're eating, even if it's not the best quality food.

Mm hmm

about nutritional advice. And no one should take that as advice, but that is what I'm doing. So look for the documentary.

Right

Uh, yeah, how, I mean, we could try to relate this to our businesses. I, uh, actually I, you know, there is a direct tie in because early on in my coaching practice, when I was trying to figure out how on earth to price my services, I actually went to the McDonald's app and I looked at the prices for small, medium, and large french fries, because I had heard that there's like a psychology, right?

Ah There

the ratios between the prices of the small, medium, and the large, and tried to like come up with a, uh, you know, I tried to model my, this was a long time ago. Okay. I've moved away from this. I actually never implemented it, but I tried to model my, my pack coaching package pricing off of the same ratios for like McDonald's French fries. Oh

Okay. Well, no, that's interesting. It's it It's because I just read a, an email from Ryan Lazanus, who's a accounting firm runner, and he talks a lot about pricing and, uh, oh, I think it was him. Anyway, uh, he does the pricing, uh, in three tiers, like you described, but the second tier is not like, the price is not right in the middle between the low and the high. It's like pretty close to the high tier because he would rather, uh, that clients choose the highest one.

Yeah, that's what it was. Sorry, I couldn't remember. Yeah, it's been a while since I've thought about this, but that's exactly right. So I figured if anyone knew what they were doing with pricing, it would be McDonald's, so why not model myself after them, right? Um, I found the spreadsheet that I used. I just happened to pull it up. So, uh, it's not a dedicated spreadsheet. This is in my spreadsheet that is called When You Need A Spreadsheet,

Uh

I just kind of use as like a scratchpad for solving random questions like this. So yeah, I've got the small fries at 1. 99, the medium fries at 2. 29, and the large fries at 3. 19. This would have been, like, last year. I don't know if this has changed since then or whatever, but Yeah, and then I basically just figured out like some multipliers and like scaled it up

Okay.

from french fries to coaching packages

Yeah. Fascinating.

This is probably this is like a very indirect way of getting at the like other than instead of like trying to understand the psychology The math this is basically copying someone else and hoping that it's a good strategy again. I did not end up going with this I don't even have a small medium large packages anymore, but I thought it was worth throwing out there since You know McDonald's.

Right. And pricing is, uh, for me, at least has been a, a long running experiment of trying to figure out what my pricing should be. And so, you know, I think it's useful to look at examples of like, how does McDonald's do it? How do other accounting firms do it? How do other coaches do it? That kind of thing. And you have to find your own path, but the, those folks know something and maybe something that you don't know yet. And so it's, it can be

for sure.

Lean on them, get ideas from them.

You know, I've been using the McDonald's app for a long time. Speaking of how much they know, but, uh, I think I actually texted you when this happened to me for the first time. And I can't, it must've been a year or two ago. I don't know. They haven't always done it, or maybe you have to spend a certain amount with them for this to happen or whatever. But I got like a, your McDonald's year in review email one time.

Okay.

but they know my habits. Yes, they do. So, and you know, if they wanted to, I mean, I don't know how, this is all speculation just to be clear, but I mean, they could probably learn your habits and do customized pricing. I've heard of that as a model. You know, where, where companies know about your rough, uh, you know, demographically, like what is your income level and maybe offer different pricing based on that.

Right. I think it'd be a little harder for them to get away with that because the prices are posted there on the menu as you drive up.

Right.

Okay. Well, one other potential tie in is the idea of running what if scenarios of like forecasting things like this can be useful in cashflow forecasting for your business where like, you may not know what it's going to look like a year from now, but you can make some assumptions and like play out a few scenarios and see what would happen if like this and this is true. What would that look like? And then let's switch those variables.

I feel like there's a deeper message in here too, which is, Steve, if we keep doing these things and by these things, I mean, eating at McDonald's, will that get us where we want to be?

Uh huh.

For now, for me, the answer is yes. So, um, and now that's on the record. Oh,

They, they first drew me in with the, uh, the like 1 breakfast sandwich. Uh, deal, uh, is probably a couple years ago now. They don't have it anymore, but, cause you could get the breakfast sandwich for a dollar, and then a coffee for whatever amount. Couple dollars. Uh, and then there's your breakfast. On the way to work.

It's, it's unbelievably convenient. I just love, uh, doing the curbside pickup too. This is now turning into an old, an ode to McDonald's, but like, you know, I'm, I'm at the place I'm going to be going from where I am home around lunchtime. Typically it's like the dog park. I've taken my dog out for lunch or something. I can just punch in my order as I'm getting in my car. I just park in the parking spot. They bring me the food. I go home. It's amazing.

Mm hmm.

And it's always so fast and so convenient. Uh, here's a question for you. You listed like four McDonald's on the spreadsheet. Are they somewhat equidistant from your house? And what determines which one you go to?

They are roughly equidistant, yeah. And it just depends which direction I'm going. Uh, if I'm going into this town or the other town. I'm kind of, like, in a, in a suburb out between a bunch of towns, so. Yeah, it just depends what else I'm doing on that errand.

So here's a conundrum I have. I used to live like four to six minutes from the closest McDonald's. And that was bad enough. Then they built one across the street.

Oh,

But it turns out I actually more often go to the one that's a little bit further away still just because it's like on the way to and from so many places compared to the other one. So it's kind of interesting, but I should buy McDonald's stock. If I spend as much on their stock as I did on their food, uh, anyway,

This is not investing advice

no.

Don't take health advice or investing advice from us.

Well, Steve, thanks for sharing. I think this is a really, really fun spreadsheet story. And, um, I want to know, I guess, is this going to change your behavior at all? Like, have you learned anything through this experience that is going to modify your orders or how you use the app or anything like that?

That is a good question. I don't, I don't know.

I mean, if not, that's totally fine. Cause you never know what the heart wants when you're hungry. So.

well, yeah, fair enough. At the moment, not yet, but, I may, uh, run like some what if scenarios and that might change things, but yeah, like you say, it's, I want a Filet O Fish today, so that's, I'm going to get that, whether it's, whether it's the, uh, biggest bang for your buck on the point value or not.

All right. Well, thanks for coming with us on this, uh, very revelatory journey about McDonald's.

You can email us hello at notaboutmoney. com and we'll see you again on another episode.