You may have heard this title before. It’s the title to the book, Grinding It Out: The Making of McDonalds’s by Ray Kroc.
I read it because I was getting really curious about how McDonald’s became the giant it is today, and how business owners and entrepreneurs can take the tactics McDonald’s employed and use it for your own businesses.
I’m not going to go into details of the book (you’ll just have to get a copy for yourself and read it, which I highly recommend), but there were a few pointers that really stuck out to me with regards to marketing and price strategies, which you’ll find quite interesting.
Advertising & Public Relations:
Here’s what Ray had to say about Advertising and Public Relations:
“In our business there is two kinds of attitudes toward advertising and public relations. One is the outlook of the begrudger who treats every cent paid for ad programs or publicity campaigns as if they were strictly expenditures. My own viewpoint is that of the promoter; I never hesitate to spend money in this area, because I can see it comeing back to mee with interest. Of course, it comes back in different forms, and that may be the reason a begrudger can’t appreciate it. He has a narrow vision that allows him to see income only in terms of cash in his register. Income for me can appear in other ways; one of the nicest of them is a satisfied smile on the face of a customer. That’s worth a lot, because it means that he’s coming back, and he’ll probably bring a friend. A child who loves our TV commercials and brings her grandparents to a McDonald’s gives us two more customers. This is a direct benefit generated by advertising dollars. But the begrudger has a hard time appreciating this – he wants to have his cake and eat it too.”
You need to think of your advertising/marketing as an investment, NOT an expense. I’ve talked to many business owners, and I hear over and over, “It’s not in our budget to advertise right now.” blah blah blah!
The reason it’s not in your budget is because you don’t have any customers because you don’t do any marketing! It’s a catch-22… Start with marketing!
So, Ray was talking to two of his business partners, Earl and Walter, about a new milk shake they were going to sell called, “One-in-a-Million.” Well, Earl and Walter wanted to sell it for a dime.
Ray chimed in and said to sell it for 12 cents. Here’s the conversation (read the whole page):
This… this can be applied to any business! Test different prices to see what works. Don’t “assume” someone won’t count more pennies just to get what they want. As McDonald’s did, they tested the 12 cent shakes at one of their stores. When it worked they applied it to the rest of their stores! Now, if it didn’t work out like Ray though, then they would have found out too, all from TESTING.
When Times Are Bad, BUILD:
Back in the Great Depression of 1929, many businesses folded. The ones who succeed and became giants today… they were the ones who kept on pushing forward (think, Proctor and Gamble)!
Here’s Ray’s take (highlighted):
Notice, he said, “Why wait for things to pick up so everything will cost you more?” Also, he said, “Pump some money and activity into a town, and they’ll remember you for it.”
Remember: Tough times never last, but tough people do! (<—That’s actually a title of a very good book, too)
I wanted to share these points with you because they really stood out to me. These are tactics Ray used to build McDonald’s to what it is today!
What are you doing to build your empire?
Be sure to let me know in the comments below.
Now go take action!