Hi,

this is the first full issue, so one line on how this works from here. In weeks with an episode, you get the thinking underneath it. In weeks without one, like this one, I take one thing happening in consumer business and pull it apart. Every Wednesday.

This week it's on loyalty. On 23 September, McDonald's told investors it will turn its loyalty programme into tiers. No launch date, no tier names, no thresholds yet. But the perks it did name tell you a lot, and Starbucks made a similar move six months ago with results we can already read.

THE ANNOUNCEMENT

The tiers are part of McDonald's “Next”, the plan that follows six years of “Accelerating the Arches”. It has four pillars: Menu, Consumer, Restaurant and People. The tiers sit in Consumer Next. “Make It Golden” is a separate piece: the multi-year service commitment that carries Next into the restaurants, starting on 5 October with training for 2 million people.

The whole plan is built around being customers' "first choice" more often: when someone decides where to eat, McDonald's wants to be the default pick. Loyalty is one lever. CMO Morgan Flatley described Consumer Next as the strategy "to convert our customer relationships into more visits", and said tier offers would be tied to "incremental occasions and trade-ups". In other words, what every loyalty programme wants: more visits, and a bit more in the bag each time. The interesting part is how.

The base is huge. Nearly 220 million members were active in the last 90 days, up 13% in a year. Another 150 million or so signed up and went quiet. Members visit 2.5 times as often as non-members and account for about 30% of sales: $40 billion over the last twelve months, up more than 20%.

The pressure shows up in the same results. US comparable sales grew 0.8% in Q2, carried by higher checks while guest counts fell, and McDonald's expects the US to be slightly negative in Q3.

TWO KINDS OF BENEFIT

Most tiered programmes mix two kinds of benefit. What matters is how the two are balanced.

Progress benefits make the programme better the more you use it: faster earning, longer redemption windows, bigger rewards. They work like a progress bar, and they don't need to be exclusive to work.

Status benefits sell recognition, and their value comes from other people not having them. Thus, (obviously), a top tier feels less exclusive as more people reach it.

McDonald's named both:

Progress: faster points, personalised missions, menu discovery challenges, family bonus points, and benefits it called "clear, concrete, and achievable".

Status: early access to limited menu items and merch, and "a coveted invite to a McDonald's launch event".

For the 150 million who went quiet: birthday bonuses and partner perks, with Uber credits and Disney+ coming in the US this year.

What McDonald's hasn't said yet is what decides whether the mix works: what the tiers will be based on, and how many people reach the top. It describes its members by how often they visit (more than once a month, or at least once in 90 days), but it hasn't said whether tiers will qualify on visits, points, or spend.

WHAT STARBUCKS SHOWS

Starbucks launched Green, Gold and Reserve on 10 March. It's the same mix: a progress ladder with status at the top. Gold takes 500 Stars in 12 months, and Reserve takes 2,500, five times the Gold bar. Earning rises from 1 Star per dollar to 1.2 and then 1.7. The status perks (curated events, exclusive merch, trips) sit only in Reserve, behind the highest threshold.

The first full quarter was strong: US comparable sales rose 7.9%, transactions rose 4.2%, and active members reached 35.8 million. But Brian Niccol said growth came from both members and non-members, so I wouldn't credit the tiers with the turnaround. The service and menu fixes probably did the heavy lifting.

One detail is worth keeping. Free Mod Monday gives every member, including Green, one free drink modification a month: an extra shot, a syrup, a milk swap. One in three members who tried a new modification through it ordered it again. A free trial that turns into a paid habit.

There was a trade-off: one independent estimate has Green and Gold members earning 15–25% fewer Stars at the same spend than under the old stored-value rate, before counting new perks like non-expiring Stars.

Two structural differences matter for McDonald's:

Number 1: How deep the base is. Starbucks' 35-million-plus members account for nearly 60% of its US company-operated revenue. McDonald's has about six times the members, accounting for about half that share of its global sales, at roughly $45-50 per active member per quarter, by my estimate.

Number 2: Who pays. Starbucks runs most of its US stores itself, so changing the earn rate was one decision. McDonald's is about 95% franchised, so every perk has to work for the people who fund it.

MY READ

Most coverage focused on the perks at the top: launch-event invites, early drops, merch. McDonald's own description of its members suggests that's the smaller story. Its frequent fans respond to "deals, events and what's new". Its casual members care about value and familiar favourites. For most of them, a tier will be judged on one thing: does the next reward feel within reach?

That's why I think the most important threshold is the first one, not the last. McDonald's already splits members into those who come at least once every 90 days and those who come more than once a month. Moving people from the first group towards the second is where the extra visits are, and it's what McDonald's said it wants: rewards that encourage "one more purchase".

Setting that first step is a trade-off. Too low, and McDonald's pays rewards for visits that would have happened anyway. Too high, and casual members never feel progress and stop trying. There's good evidence that people speed up as a reward gets closer, so the first step has to feel close from day one.

What moves a casual member matters too. McDonald's named the tools: personalised missions, menu discovery challenges, and offers built around each member's habits, like breakfast rewards for breakfast regulars or group offers for families. The best ones reward a visit someone wouldn't have made anyway, whether that's a new occasion, a new time of day, or a new item. Its own data hints at what that looks like: members who tried one of its new drinks often came back for a different one.

Status still has a place for the fan group, but it works better as limited drops than as a perk guaranteed to everyone at the top.

When the tiers launch, I'll look at three things: how far the first step sits above "once every 90 days", whether moving up earns value or recognition, and who pays for it in a system that's 95% franchised.

If you run a tiered programme, hit reply and tell me how you set the first step on your ladder. Two lines is plenty.

Sources: Reuters, CX Dive, McDonald’s Investor Day 2026

YOUR QUESTION, IN THE ROOM

Last week I asked for your question for the next guest. Here's the shortlist. Vote for one below (simply click), and the top-voted question goes into the recording.

Voting closes: Friday 02.10.2026.

See you on launch day, Luca

P.S. Episode 1 goes live on Wednesday 7 October. Follow Prime Perspectives on Spotify / Apple / YouTube.