How Five Guys is Manipulating You
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- čas přidán 17. 04. 2024
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Hank talking about getting little burgers, little fries, and getting in his little car and making his little car noises warmed my heart
My boi got a hovercraft.
It was specifically Tesla backing up noises
It warmed my little heart
❤
czcams.com/video/PoiDgJ1Qkdw/video.html
I'm gonna open a fast food place and call the small size "Wittle Beby" size and the regular "Big Hulkin' Smash" size and see if this works
wouldn’t regular be “wittle beby” and large be “big hulkin smash”? i am enjoying the naming scheme tho…. it brings to mind some of the deranged stuff you find in fancy restaurants. like. Oh you actually want me to say those words with my mouth to order
I think this could backfire, purely because Wittle Beby is fun to say
A local lounge bar where a live has a “Big Boy Cheese Board” and you 100% feel like a tool ordering it but you also feel powerful looking a server in the eye and saying “we’re going to have the Big Boy” 😂
Positive out of a negative i like it
honestly i think the size trap only works the first couple times you go there. once you get used to it, you realize how big the various sizes are and then you order however much you want to eat. the problem then becomes that our gluttonous society just wants the largest size possible.
The five guys double burger trick reminded me of a story about Dave Thomas. He thought a double was the ideal burger size, but noticed (at the time) customers were uncomfortable ordering something that large. So he put a triple burger on the menu too - not for people to buy, but specifically so that the double looked like the medium choice. What a freakin wild thing to do, putting a red herring on your menu
Did he flip it for the whole future? He noticed *at the time* but now it's like, not weird or abnormal or excessive at all.
@@elishannon3855 Yeah he’s partially the reason. The other part is Bob’s Big Boy creating the double decker burger, which McDonalds -stole- used as inspiration for the Big Mac, and between the three of them they normalized doubles in America
@@z-beeblebrox Which is sort of sad because while everyone and their mother has a double burger of some kind on the menu, the vast majority of them are rinky dink patties. You end up with the same meat that would have been in a single had the double not existed, just with more bread or toppings depending on how the double works at that particular establishment.
@@ck7802 For sure. It's important to remember that shrinkflation ain't new, it's in fact a time honored tradition
This is a common sales tactic, and you can see evidenced in most tech offerings and online websites selling product now.
The first time I went to Five Guys, I went with my sister, so I went up and ordered two burgers and two large fries. The cashier looked at me and said "You want TWO large fries?!?" and I was confused, there was two of us, and both of us are big eaters, why wouldn't we want two large fries?
I watched them put two cups into a bag and just proceed to pour scoop after scoop of fries into the bag. I swear there was 3 pounds of potatoes in that bag. Guess we learned the hard way...
five guys cannot manipulate me because I am allergic to peanuts so I win
Same!
But think of how many ppl you can manipulate if you have a backpack full of free peanuts (and disposable gloves for safe handlin)
I literally can't even walk into Five Guys lol
70 because you can fit one more in there.
@@sommeone Biohazard suits exist :p
Lol I gotta remember to call myself a "price sensitive person" next time I'm trying to tell someone I'm poor 😭
Hey, how're you doing lately? Feeling a bit price sensitive, if I'm honest.
I was looking for this comment
It smell like price sensitive in here
+
Shades of the Starbucks CEO complaining about discrimination against "people of means" (billionaires like him)
I wouldn’t really mind ordering a Little Burger or whatever, but IHOP has the “Rooty Tooty Fresh and Fruity” and there is no universe in which I will ever physically say those words in that order to another human being 🤣
I absolutely have - and will - as a grown man, by stealing Michael Caine's accent for the order. It's a delicious stack of sweet steaming cakes. I refuse to be denied it for its name.
I can second this, worked at a local ice cream place for a while that called the smallest size “kiddie”. Almost never saw the “manly-man” type but a kiddie even though it was PLENTY of ice cream for one person.
Just because you think it was enough ice cream for you, doesnt mean that it was enough ice cream to satisfy a full grown man. Furthermore, even if it was, a man would not order it, not because of their ego, but because the name conveys the idea that it is intended for a child, and thus the amount of ice cream they receive will be less than they are seeking.
Another reason McDonald's wants you to use the app is because they get to sell advertising profiles and user data to third parties
Hooooonestly I'm not sure about that. Like maybe? Obviously giant corporations don't get to be giant corporations by not being greedy and stingy. But at the same time that data is so cheap I have a hard time imagining that a company as big as gargantuan as McDonalds cares about the few million enough to bother with it, especially in the face of the potential scandal/erosion of trust that would occur if it ever got out that they were selling user data. Basically if I were running a corporation as big and famous and profitable as McDs (which I'm not, so maybe ignore me) I would be more worried about the damage to the brand selling data would deal than the chump change we stand to make from the actual data sales.
I refuse to give any kiosk my info or download apps specifically for this reason.
I'll use em, but you can't have my info, I just wanted noms, dudes.
@@goosenotmaverick1156instead you just give all your data to Microsoft, Apple and/or Samsung. What’s the difference? I’m against it all as well, but the companies already know everything about you anyway.
@@stevendufour oh I get what you're saying. But anything I can do to limit what I give out, I try to. It's an easy way. Plus I don't frequent too many establishments that use them, and it doesn't inconvenience me in any way, just selecting my order, paying, and waiting for my less than mediocre food. Lol
What I'm basically trying to say is, it's important to try, and it's just as easy to not give them the info as it would be to give it to them. On the contrary I just hit one button instead of having to enter information at all.
It requires your location be on at all times while the app is in the background, spooky imo
"I'm just a little guy"
Hank, you're 6'1"!
He's just a little guy in a non-physical sense.
@@silverandexactalso larger than life at the same time, just not in the sense of stereotypical toxic masculinity
Honestly I had no idea, I only see him on camera and hardly ever in comparison with other people 😁
@@ronaldmartin2666 I've met him and he gives off very tall vibes even though he's only an inch or so taller than me!
That was pre-COVID measurements. Now he’s 3’5
I’ve been unemployed for the last year and have free time. I discovered that you can’t “use more that one coupon per order” but if you order, sit down, eat your meal for ten minutes(maybe 15?) and order with an new coupon, you can just keep doing that.
I don’t do that often but I once did it three times. Took the last order home. 😂
I've done the same thing with the DQ and Dunkin apps before but they didn't even have a waiting period so I just did it right after the first order and get everything together mostly
You can also do multiple orders on the kiosk using your deals at the same time
7:01 Hank those are NOT the reasons why McDonald's wants you to use the app. The real reasons they want you to use the app are
1. It allows them to collect and sell your personal data
2. It allows them to collect and sell your personal data
3. It allows them to collect and sell your personal data
Seriously, you cannot overstate how much these big companies are going all-in on collecting people's data. I'm sure the reasons you listed also contribute, but they're maybe like 2% of the reason and collecting data is the other 98%
Yeah I’m surprised he missed this point. Idk if I’d go as far to say it being 98% of the reason, the other reasons he listed are also very strong motivators for sure, but this is also a big factor
Good points, adding one more:
4. It allows them to collect and sell your personal data
I think the data industry issue is more of a 30 and under concern. A lot of people don't like it, but people who grew up with a phone in hand from middle, and high school, feel a deeper disgust .
And don't forget, it also allows them to collect and sell your personal data
Everything else is selling it anyway and I need to eat cheap so :/
The discussion about "little" burgers and fries at Five Guys reminded me of the reason places like Starbucks don't use "small", "medium" and "large". By using custom named sizes, they make it more difficult for you to mentally compare their prices to the prices from somewhere else. The difference in name is enough to disrupt your thinking so that you don't consider how much a "tall" coffee at Starbucks is compared to a "small" at Dunkin or something like that. Restaurant chains spend a lot of time and effort coming up with ways to fool you into spending more like that.
I love it when someone gives an additional reason to dislike something I already vehemently hated. Starbucks naming convention is one of those things.
Starbucks special lingo also adds a sort of "fancy" or "exotic" element to an order. You're using specialty language to order a specialty drink and even the simplest orders still have a degree of customization all of which makes it easier to mentally justify paying more. At a diner if I just tell the server "coffee" they'll bring me a coffee but at Starbucks they ask "what size," "light roast or dark roast" and "room for cream or sugar."
@@altejoh This is what we call 'confirmation bias'! It's not always a bad thing but it is a thing
my brain doesn't remember the fancy names lol. I just say "the big one" or "the little one" or "the middle one"
@@ethank5059 i mean pretty much all cafes will ask about the size, light/dark roast, room for cream, and all that stuff. Kind of comes with the territory when you specialize in coffee, unlike a place like a diner. I also have to ask milk preference as a barista because while most people are fine with the default 2% there's always going to be some people who forget to mention they want oat or almond etc for taste or because of lactose intolerance or whatever. I do agree with the fancy wording for cup sizes though.
I work in the app rewards department for a pretty large company. One thing to note though is that despite the point about price discrimination being basically right, McDonalds would still DEFINITELY prefer that you use the app, even as a less price sensitive customer, because every time you order or scan a QR, or do anything else, they know it’s you. Being able to tie all your spend in together along with your specific buying habits is tremendously valuable to them
This.
I never thought about this and it’s horrifying. It makes me glad I don’t use McDonald’s, but this also applies to places like Target. Having a RedCard and taking advantage of the deals and paying through the app makes things “easier” - I’m more likely to buy the dog treats that are on sale if they’re actually a better deal than the ones I normally buy, but then I’ll get recommendations or ads for those treats or similar products. Technology is truly wild.
@@dr.spookybones3965 it IS kinda creepy!
Especially because they *_could_* use that data to help people make better, more informed purchases... but in reality, they'll use it to manipulate people into less informed, less needed, costlier purchases :/
Yes, data mining.
If I had the app they would know that I go to McDonald’s once a month stare at the drive-through from the sidewalk and then continue my bike ride home 😂😂😂
A pretty important detail that wasn’t mentioned about the McDonalds app being pushed so much is the fact that companies realised they can make a lot more money by selling customer data. This is why they have so many crazy deals on it, because they make even more money from selling your data by downloading the app and agreeing to their terms of use where they can track your data and sell it to marketers.
Some great things about the app: improved order accuracy (no risk of miscommunication over a crappy comm system), time-shift the time spent ordering so you spend less time in the drive-thru lane.
One big downside is the data collection. The amount of data collected through that app about food preferences, food habits, food dislikes, food values, etc is astonishing.
Agree! As a "price-sensitive" person, I think using apps for ordering food actually saves me time, since I don't waste time standing in the restaurant, scanning the menu board and waiting in line at the register. Plus, no pricing surprises - if I add an "extra" and it immediately raises the total in my cart, I can decide if I actually want to add it or not before finishing my order. But, yes, your second paragraph is still true.
Having worked at a McDonald's i think its important to note the way that these deals also lure you in to buy more. I have seen many people use those deals as intended, they come in they grab the food listed in the deal and they move on with their day, But i have seen significantly more people come in get their discounted food item AND something else to fill out their meal. So fries function as a loss leader for them, lure people to use their service with cheap easy to make fries then make up that lost money with people who buy the comparatively overpriced burger with it.
That why I deleted it. I realized I was being played after a while, and didn’t like my money being drained. You might think your getting free stuff, you’re not. You’re getting broke.
A Venus Fry Trap, if you will.
@@maggie6152 I will Not, thank you
(/jk, jk)
If they were going to get food anyway some of those people only changed where they were going, not how much they were buying.
It definitely works as you said though for many.
Yeah I was going to leave a comment like this as well. Price discrimination is weird because it somewhat requires you to become mentally dependent on a system and learn how to “best” use it. It hooks your brain because you start thinking about how much money you’re not saving when you don’t order. And if you’re that price sensitive you likely don’t have the bandwidth for more than a few systems. I’m not saying I know this, but I wouldn’t be shocked if McDonald’s makes more money on average from poorer people who are more dependent on it than from richer people who more often pay full price. There’s also the difficult to quantify value of risk avoidance. You can afford to take larger risks on volume allocation (and therefore potential profit maximums) if you know that you can guarantee your stock gets cleared out whenever you put product on sale (still slightly above profit thresholds too).
As someone with Celiac, Five guys was the only place I could safely get fries at for years since they’re straight potatoes and one of the rare places that don’t do anything else fried in their fry oil. Also one of the few places that early on offered burgers wrapped in lettuce
Yes my favorite place as a child was five guys! And the peanuts as the ‘free appetizer’ instead of it being like rolls or bread was great too
AMA I work at both Five Guys and McDonald’s in Canada and have been doing so for more than a year. I am also a supervisor at both. So shoot your queries if you want to🙃
how do you have enough time to be a supervisor at two of the busiest fast food chains in canada? i'm assuming supervisor work is full-time
@@pricessLeopard112 I started at McD and was full time there first and then started at FG and only do McD on weekends now as they don’t require me to be full time
@@devlimbani oh cool! get that cash money homie
Which do you prefer to eat? FG or McD? Did your opinion change once you were manager & ‘saw behind the curtain’?
Hope you’re having a wonderful day.
@@TreebeardsHome As a student/bachelor anybody would prefer McD for their prices however the food quality at FG is far better than McD and I guess would be “healthier” because of their fresh produce. I don’t consume either but thats just because I dont eat meat.
Both have their own pros and cons. One is fast and cheap but all frozen stuff while other is fresh and higher quality at a higher price.
I feel like using a fast food app actually *saves* me more time overall than ordering at the store.
Often, when I order ahead, they'll already have my food waiting for me, but even if they don't the time I spent getting to the store was also time that was being used to prepare my food.
Price discrimination is wild. My parents (80 years old) have flip phones and hate how every place wants you to download and app, or sign up for loyalty programs and clip coupons online. They feel like they are being ripped off because they can't access digital programs, and I sympathize with them. In their case they can afford it, but many elders can't.
I'm not old and I am tech savvy, and I still would not "download an app" or any of that other nonsense. I just wouldn't go to such a place.
@@culwin I'm in the same boat - not old, I just refuse to use anything but a landline because I'm not keen on the idea of people being able to contact me anywhere at any time. But the assumption that everyone has a smartphone is getting so baked into society I might have to cave soon.
I recently could not order at a restaurant because the only menu they had required me to scan a QR code to look at it. No paper menus, no internet menus, just that bloody QR. Obviously, I just left and went somewhere else, but this is getting more common. Where am I going to go if *every* place just requires a QR code?
@@trianglemoebiusI do have a smart phone and I can scan a QR code. But have you tried to read that tiny print on your phone screen? I always request a physical menu.
@@trianglemoebius Agreed. I have been to places that wanted you to use the QR codes but also had paper menus available. I've heard of places that only had the QR codes but haven't been to one. If I had only QR codes to order from I would walk out. I have my land line and that's it. No need for a smart phone when work from home is a thing that exists now.
@@culwin best of luck to ya man, i cant find a replacement lightbulb since the incandescent ban that doesnt require a damn internet connection and smartphone app.
Every industry is following suit, hell we're not going to be able to refrigerate food without apps and connectivity features in just a few years.
I worked at five guys for several years and the amount of people I heard complaining to me about how much more the prices were compared to the McDonald’s that was like a four minute walk away fyi was ridiculous. It was particularly infuriating when I’d spent the two hours that morning helping to prep the food fresh for the day and being paid a livable wage for my work, like I’m sorry the cost of my labour is making this burger slightly more expensive but also no one is forcing you to eat here! Thank you Hank for pointing out that the price isn’t even that different for what you get! And yes the amount of manly men who ordered absurd amounts of food even when I advised them the little fry was enough for one person was a lot.
The price isn’t that different for him at those individual locations.
For me, five guys is literally 1.5 to 2 times as expensive for equivalent food LOL
Hes trying to extrapolate it to everywhere
@@AnewevisualI implore you to look at the price per calorie and not just the menu price like most of the goobers who complain about Five Guys prices. With the exception of couponing in the app I cannot imagine a market where the price per calorie is twice as high at Five Guys.
@@whitdodgeI don’t see much value in judging price per calorie. That would, for example, make broccoli seem ridiculously “expensive”. If anything I’d care more about price per “satiety value” or something, which is way harder to measure.
@@TheWheatless But we aren't comparing broccoli to hamburgers? We are comparing hamburgers to hamburgers. This argument is nonsensical. Price per calorie is used here because that is how we objectively measure the value of common goods. Any meal with a higher serving/calorie count would just immediately lose the value comparison by your troubled logic. Introducing factors like "satiety value" just puts Five Guys even further ahead.
@@whitdodge What puts five guys ahead on satiety?
The 'extra fries in the bag' thing totally worked on me, but unfortunately for them, I only ordered the medium size once before realizing 'this is an insane amount of fries, and I will only buy small from now on.'
Smart vid!! Two little comments:
1) Price Discrimination - It's important to understand that the savings that people get in money are extracted from their other kinds of capital, specifically temporal and psychological. I'm all for people having access to affordable food, but if we only focus on the price, we are missing the behavioral forest for one very green tree.
2) Five Guys and MANLY MANS - Five Guys is one of the smartest brands in the country from a consumer psychology standpoint. Almost everything that they do is intelligently calibrated towards a very particular set of people, behaviors, and value propositions. It's so solid that it can get guys like Hank in the door, but also know that a lot of their customers are not going to buy anything little.
I see some people here in the comments pointing out the very good fact that McDonald’s is using one product as a loss leader in order to get people in the door and potentially fill out their meal with other (full price) items. Another aspect I think should be considered is that, even if you just get your discounted product and go, they are getting you to come to them more frequently than you would on your own. They might operate at a small loss or neutral by offering heavily discounted fíes, but now you are more used to and more comfortable with adding a stop to McDonalds to your way home from work or on your way to pick up your kid from soccer. Now you know the location of the McDonalds closest to your home, work, and your kids’ extracurriculars. By drawing you in they are creating a familiarity so that they become the “easy” choice when you need something fast (even easier than they are already, due to habit and familiarity).
Even selling TWO large fries for $1 is still profitable. French fries are incredibly cheap to make
Yes. Even if 100 people get free fries that week.
That's 100 people that didn't go to a competitor and that's worth more than any TV or billboard advertisement.
The customer actually gets to sample the product.
Also psychologically, people are more likely to eat fast food at a place they have been to before as they subconsciously feel more comfortable.
Humans are pattern following creatures.
It also creates dopamine for the customer as they have gotten "a good deal".
Humans are more likely to favourably think about a shop where they have previously gotten their money's worth of service.
It really is genius.
I find it utterly fascinating.
It really speaks to the phrase "you've got to spend money to make money".
It shows how a company with a large capital behind them really can leverage that capital to become dominant in the industry. :)
on top of all that, french fries stimulate your appetite in a crazy and unnatural way, you will crave more food immediately after eating fries, this is very commonly observed thing in food science. These companies are genius!
Mc Donald’s is real estate company who sells burgers and fries, though.
let’s not forget reason #4 why McD’s wants you to use the app: linking orders to customers for data / trends analysis etc
5:45 “I am not a very price sensitive person” is such a flex
"Anything I order will be a deal because it saves me time."
That's a motherfucker who is rolling in it. God damn Hank is baller
I have to say the thing about McDonalds app... is there is NO easy way to REFUND or dispute orders. You end up having to call your bank and fill out a thing. I can't imagine how much money McDonalds actually steals using this app
Maybe I'm just being dumb, but what are some situations that would require a person to refund or dispute an order?
My favorite story about coupons, since you brought them up:
When I was a freshman in college, one day I bought a box of Hot Pockets at the grocery store (I had heard that's what college students eat). When I checked out, along with the receipt a coupon popped out: "$1 off when you buy any TWO boxes of Hot Pockets!". I went to my dorm, ate the Hot Pockets I bought, and they were alright, so I was like "Okay sure, I'll go for that". Next time I'm at the grocery store, I buy those two boxes, and the coupon printer kicks in! "$1 off when you buy any THREE boxes of Hot Pockets!". I was like "Well that's a worse deal, but I'm in college and broke; sure." Next time I go shopping, I buy my 3 Hot Pockets boxes, lo and behold: "$1 off when you buy any FOUR boxes of Hot Pockets!". Well okay, at this point, this is barely a deal. But I also feel like I'm playing a game of Chicken, and I really want to see how far this will go. So I decided to play along. I took longer and longer between grocery trips, but I kept on buying more Hot Pockets, and getting more coupons. It ended when I got $1 off SEVEN boxes of Hot Pockets, and then either they just gave up, or the promotion ended. But I really liked feeling like they were testing how many boxes of Hot Pockets I would buy to save one dollar. And I think after all those Hot Pockets, I never bought another Hot Pocket again.
I have never heard of anywhere in the world that sales work like that. The sale price is on the label of the shelf, it is not dependent on how frequently an individual customer buys an item.
Only exception I can think of is limiting how many times the deal can be applied per order (think "limit: one per customer")but you can just leave and come right back in to get the sale again
@@partylizard7012this scenario is more common with loyalty cards that track one person's spending and customize the coupons
@partylizard7012 I think they're talking about places like Kroger where coupons will print when you use your rewards account. At least in Kroger's case, my coupons are related to things I buy often on my rewards account. I've never seen them go up sequentially like that, but they do end up related to something I purchased recently or something I've bought consistently for years.
@@partylizard7012 These kinds of coupons attached to a receipt are actually really common in the old, small stores (like Dollar General, Big Lots) and I can totally see someone programming a deal in there to check how many of an item was purchased, add one, and give $1 off as a sick joke. Not all sale prices are directly attached to the shelf.
Not quite the same, but a lot of places will put up a sign that says something like "Get two for $3!" but if you check the normal price in the fine print they are actually $1.50 each and not discounted at all.
I work at Dominos and the price difference between the coupons and the menu price is staggering. My issue with price discrimination is that English as a second language people often end up in the "pay more" category when they would really prefer to be in the "pay less" category
Exactly! I used to work at a pizza chain and we had all kinds of deals that could essentially cut your total in half, but you had to ask for the deal by name. Employees were not allowed to discuss anything other than the 3 coupons that were cherry picked each month, unless a customer specified "do you still have x coupon?", and very few ESL folks knew to do that
@@pastate lol that is extra shady
Dominos is wild with that. And it doesn't help that their website is absolute ass, so you end up either suffering through it or paying like twice as much.
I adopted online order as soon as it was available. I’m saving like $30 from the app.
Hank’s argument of price discrimination isn’t a strong one. The idea of people valuing more time over cost doesn’t match up with how much of a hassle it is to call in an order vs just quickly placing a pre-saved order.
I value my time AND money. Using my time to discover how convenient the app is has made me save both my time and money.
I understand and sympathize with your price discrimination argument. There is one big glaring problem with it. The companies only care about the customers as long as it is making them more money. I want my government to sort out equity. I want the companies to focus on making affordable, well-made products. I don't accept having them choose who gets what based on made-up loops for more profit, neither do I trust them to be generous for the sake of it.
It's my understanding that price discriminiation is also knownto generate more profit than other forms of pricing. Not sure that invalidates what you're saying, just adds more context tot he story
Note about the McDonald's app: When I first installed it, I got pretty good deals similar in scale to the ones Hank saw...for about six months. Then over time, the deals became less significant ($0.30 off a $6-ish purchase, after comparing with regular pricing) or required purchasing in personally impractical volumes ($2-ish off _four_ Big Mac combos, etc.). More data points are needed for comparison, but I feel like there's an attempt to exploit sunk-cost feelings (quantized in "points", which _expire_ if unused) after using discounts to establish a purchasing habit.
I would actually be surprised if this WEREN'T the case.
As a former five guys employee from ~6 years ago, you make some great points! I'm glad that there are many options for people to be able to get quick food whenever they need it. Some interesting poiints I thought of while watching:
-I trained as a new employee at a new store, so corporate was all over the place. They and the training videos both pointed out very clearly that five guys purposefully doesn't advertise and doesn't give out coupons because they stand behind their products being worth that much.
-Five guys quality really is at least a step above other "fast foods", at least compared to places I've previously worked. The patties are shaped and weighed individually every day, potatoes are cut every day, most toppings are prepared fresh every morning (not pre-packaged bags of lettuce, pre-cut tomatoes, etc.). There's nothing wrong with places that do so - I frequent them a good amount myself, but something to consider. That's a lot more prep work and labor that goes into it and goes towards the price of the food!
-Not completely relevant to this but compared to other fast food restaurants I've worked at, five guys give their employees a free burger, fries, and shake every shift they work which is super dope for those who need or want it!!
Your description of Five Guys food prep reminds me a bit of Chipotle, which I consider more fast-casual than true fast food. When you go in, you can see employees in the back chopping lettuce, mixing guac, cooking the meats, etc and I like that you can see ingredients being prepped right there so you know you're getting fresh food.
its not very often a current five guys employee, former mcdonalds employee gets a video like this thrown at them. I honestly never got the app for mcdonalds but its very interesting to to compare them 2 now, but to be honest i would have likely said a lot of similar things to you @verh7 like free meals and the quality preaching of five guys. The mcdonalds i worked at had employee meals free up to $5 but any more than that and you have to pay for it, so i often got the cheaper items becuase of that, such as the mcdouble mentioned in the video, much to the aversion of my stomach. One thing five guys does that Mcdonalds never did is on days where i dont work till close/only work a few hours/get sent home early becuase reasons, and thus dont get a break like normal, is i still get my free five guys employee meal. When a case arose similarly at Mcdonalds and i got food, i had to pay for it still if i recall correctly.
What you're saying also reminds me of In-N-Out, except Five Guys is a *lot* more expensive.
Yea McDonald's may be equalling calories but calories are super cheap. Not to mention McDonald's is a massive publicly traded corporation. They're all to happy to cut costs since they have a captive audience.
Five Guys seems like they started out realizing that McDonald's is expensive for cheap food. Honestly it's a good idea and they executed it well. McDonald's makes enough that Five Guys could make a quarter of McDonald's profit and be thrilled.
Wonder if they'll end up racing too the bottom. Not sure if they're publicly traded.
@@lesliefranklin1870 that's fair! I worked at five guys on the east Coast where in-n-out isn't at all, so maybe five guys was able to capture the market there. Five guys also doesn't do drive thrus at most, if not all, locations which is an interesting note as well.
Every time you say 'A Large Fry' I just imagine a single giant fry. I find it so hilarious, I would never phrase it like that.
this is super interesting to me, because at present i cannot think of any other way *to* phrase it. how would you put it?
They're ordering the Megatater
@@ladyofthewittyremark If I was trying to be most correct I would say a large portion of fries. If I was actually speaking casually I would probably just say large fries though, plural.
Now granted, I wouldn't actually say fries at all because I'm British, they'd be chips, unless I need to convey the thickness (or rather thinness) to you specifically, then I might say it.
Very common way of phrase where I am at.
Similar to how “getting a hair cut” doesn’t mean a single hair is getting cut.
@@lVlegabyte The difference is you're actually saying "get a haircut". Not to be pedantic, it's just important because the compound word entirely changes the grammatic makeup of the sentence.
"I am getting a hair cut" = 'hair' a singular object, 'cut' is a verb.
"I am getting a haircut" = 'Haircut' is the object.
An app purchase is like a coupon purchase with a rewards card where you also consent to letting someone snoop through your wallet, car, house, etc. The reason they give you a "discount" with an app rather than something like a digital coupon or daily deal is because they are talking payment in personal data.
I would argue that the fast food apps actually save time when used in a specific way.
Many apps make it so you can save your favorite orders and immediately add to cart and check out. But the best feature is that you can send your order before you arrive so that when you get there, the food comes out almost immediately.
I was a manager at five guys and got to look at our margins. The potato’s in A whole fry basket of fries only costs a quarter so they use fries to cover the cost of the rest of the food.
Price discrimination is good for basically everyone watching this video. People who have the means and capacity to download and app or get a loyalty card without any issues. Unfortunately we are having big issues with this in the UK with things like the Tesco Clubcard which is a loyalty card that gives you access to "Clubcard Prices". The issues is not for the individuals who chose not to sign up but more for those in society. Those who are older, homeless, less able and vulnerable people who simply do not have the means or capacity. Now these individuals are having to pay inflated prices when in reality they are often the ones most I need of financial support.
This was literally what I was thinking about. What about the people that don't have phones? Surely, they are the ones that need access to the app most.
Yes, exactly this!
The card isn't some act of charity though. You're almost certainly trading getting some minor discount for having data collected about you and your purchases.
Price discrimination only works when it's invisible. If people see that you paid X and I paid Y where X < Y that causes immediate problems.
My supermarket switched from the little card that you get penalized for not using to requiring the people use the phone app at checkout. There is a line between price discrimination and coercing people into the data economy that is being crossed there.
The rich care not for the plight of the poor an old working class.
I've heard also that things like apps and "customer loyalty programs" are largely about 1st party customer research, because it has become mostly illegal to buy market research from third parties because of the privacy acts in the past decade.
The fact that a VIP’s time is more valuable than mine is depressing. But it just drives home the fact that there is a huge wage gap between the haves and the have nots.
Hank it’s really important to note that the TOS in the McDonald’s app includes a clause waiving your right to sue / forcing you to go through arbitration if there is a class action law suit.
So if you need it to be cheap, you also have to waive your rights.
A lot of these hidden costs don't get calculated in how much people are "saving". Sometimes it's because it's pretty hard to quantify directly (at least from outside).
There's a tiny saving grace where, if they do something really egregiously illegal, that agreement can be thrown out by a judge and a class action can proceed as normal.
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I assume that means for the app though, not like if there was something wrong or unsafe with the food
@@jess-mx No, it would apply for the food. It is really broad language so a good lawyer could argue against it potentially being over broad or not including particularly devastating circumstances, like others have said, but the language in the TOS would include it.
A sponsorship on Hank’s channel?! A whole new era
This is not the first, but yeah...weird...
@@hankschannel Yeah I was gonna say, given the fact that this is on your side channel, I was curious where the sponsorship money is going?
The video he made a few months back about how the regulating agencies changed how a unit of engagement is classified which upended a ton of existing contracts that had guaranteed sponsors a certain level of engagement now were able to get a lot more out of those existing contracts and creators were left with the short end of the stick trying to make up for all the units of engagement they now had to make up for.
Hank mentioned you would probably see a lot more double ads like this popping up because of those contracts
Its so wild haha. You dont do sponsor reads on vlogbrothers, the scishow and crash course stuff doesnt do them because their educational, and shorts dont have time for them. So i think this is the first time in 15 years of watching Hank I’ve heard you plug something that isnt your own business lol. Like even that freakin mobile game you plugged you made an investment in lol
@@hjewkes SciShow does them sometimes, but the ones I've seen are either for educational things, or more like underwriting where it's just a mention or a logo of a company.
so factor is a tv dinner that’s trying to be healthy and gets mailed to you instead of being in the grocery store walking distance from my house?
the mcdonalds app also comes with a perpetual arbitration agreement so they can prevent you suing them + rewards in general is huge for data harvesting and gets you to spend more frequently at mcdonalds overall
my McDonald’s app sneakily changed the “any size fry for $1” to “$1 off any size fry” 😭
Nooooo
Type and availability of deals is regional. In my app, there is a still a daily low-price deal for fries, although it's $1.29 (inflation!) any size fries
I want to check the app to see if that changed in my area too, but I know if I open that app, I’m simply going to buy McDonald’s at midnight for no good reason 😂
@@sentimentalhermitNot even just regional - I've had differences between parts of the same city.
$2 for a large fry in my app. 😢
What these videos have shown me is that a disturbing amount of work goes into trying to manipulate people into giving companies as much money as possible as quickly and frequently as possible. I kind of understood this already but I don't think I comprehended just how engrained it is.
Every for profit company does this, from food to video games to children's shows. They all want to hack your brain for attention.
Oh yeah...that's, like, a huge thing.
Like pretty much the crux of what this country's biggest companies (and many more aspiring giant companies) is built on. As long as they're making profits, they're happy. And ever-increasing profits is a huge part of the goal and what makes Wall Street happy
True enough, but these tactics all scale to 1000 franchisees, and are copied by dozens of other brands, and so the effort expended to get _you specifically_ to spend more of your hard-earned cash doesn't really seem like a "disturbing amount" after all.
@@ps.2 True, but the fact that the 1000s of franchises/brands exist means that almost any individual can find at least one company's branding more enticing fall to the traps that make them spend more money on that brand
I like the editing at 3:34: "I am one of the things we need to understand"
On the other hand. MacDonalds has the blood of thousands of people in their hands. How does this factor in the equation of fair price?
McDonald's doesn't just have an app, they have a *good* app. That's such a rare thing in restaurants for some reason.
Legitimately the best fast food app that exists. It is wild how good it is compared to every other one.
In my experience the Wendy's app was pretty good (also good coupons, annoyingly it required you to confirm the CVV code for the saved card with each order), the Sonic app is decent (not too many deals but some, UI is acceptable), the Taco Bell app *was* good until I got banned because of doing chargebacks when they repeatedly left food out of my order.
The best app is Little Ceaser's because with the pizza portal I can order and pick up a pizza without having to say a single word to a single human being.
I agree! Their rewards system is also top-tier, including their deals.
I agree that the app is the best restaurant app I've tried, but I disagree that it's*good.* 😂 I've had it glitch out on me many times.
Very true, could be great but it's just good. But most other restaurant apps are just awful.
Please cover more of these business myths and how they manipulate people with psychology
It's a really interesting topic. I saw an article that compared actual price increases to the perception of price increases and argued that companies like McDonalds have gotten better at optimizing orders and getting people to buy add ons and upgrades so the amount a typical customer spends at McDonalds is much higher despite the price increases not being as much. People then get mad and blame the overall economy while many economists are left scratching their heads because the prices didn't go up by that much.
There's actually a Sci Show Tangents that covers advertisements that I just listened to! It's a bit weird as it's one of their first episodes so they're still figuring out the format but they talk a lot about ad psychology and trickery.
I like how Hank titled this video after Five Guys and not McDonald's even though McDonald's is far more popular and algorithm friendly lol.
Something I'd like to add is that "little" just sounds smaller than "small" and i don't know why.
Also it's entirely possible McDonalds is purposely giving away better deals just to drive App adoption. Some mid-level analyst decided it's worth subsidizing your meal to hit their quarterly engagement target.
This sorta thing happens all the time in tech... at least until some exec decides it's time to transition from growth to profitability and begins the enshittification protocol
I don't disagree with your premise, but while most tech startups operate at a loss before enshittification, McDonald's is almost certainly not losing significant money from these deals, just not making as much profit. The best and most consistently available deals are free fries or drink with a minimum purchase. I imagine these are offered because making these free saves the consumer several dollars but the company only loses cents of product. The customer feels like they're getting a great deal by getting a free $4 order of fries or soda, items that, based on everything I'm seeing online, have a 75-90% profit margin, as opposed to 55-70% on meal items.
Maybe this is just me not being immune to propaganda, but I don't think this will work the way you're saying. This isn't like an Uber or Facebook, where the network effect is so fantastically powerful. Burgers are a commodity. If the time ever comes where McDonald's raises prices to profit on their customer base, people will go next door to Wendy's.
@@evildude109 It's already happening and people are going to the grocery store instead of another fast food place.
@@evildude109 The thing is Wendy's is also raising prices.
That's why you get your Postmates order and then never use it again. Take advantage of the deal while they're trying to attract a user base and then bounce.
This point about price discrimination is so interesting, and now I'm seeing how it manifests in my life. My parents and MIL are very price sensitive, for various reasons, and they tend to balk at prices that they see as high and use coupons as much as possible. But my husband and I just don't have the time or mental bandwidth to care, so we often end up paying more for things without even batting an eye. We also don't have kids and, once I'm done with school, are likely to have a significantly higher combined income that our parents have ever had. So, yes, we pay more, and we probably should, and we don't mind. So weird!
Absolutely! Another commonly accepted form of price discrimination is airlines increasing ticket prices as the flight approaches, effectively allowing tourists to buy fairly cheap flights while putting more of a burden on businesses that commonly make these last minute purchases. But I think there is an important caveat to be added to Hank's statement about price discrimination.
In microeconomic theory, there is this notion of perfect price discrimination. It essentially means that you charge everyone the maximum they would be willing to pay for a product. Such an arrangement would be efficient (achieving the maximum potential output of the given economy), but it would wipe out all the benefits consumers gain from competition (precisely not having to pay the maximum price you'd be willing to pay, we call this phenomenon consumer surplus).
With the growing amount of our data that vendors and producers can access, I fear that it allows them to gradually approach this state of perfect price discrimination, making increasingly well-tailored offers to all of us. This certainly isn't an unsolvable problem, but we should keep it in mind. Price discrimination can be acceptable and even desirable, in some cases, but I recommend that we keep an eye on it.
6:56 I'm glad you mentioned price discrimination! It's how McDs is navigating higher prices by keeping their poor customers happy, and rich customers still get a convenient meal
EVERYONE TAKE NOTE HANK SAID “IRREGARDLESS” AT 3:10
Tis a perfectly cromulent word!
*_Um actually_* the right word is inregardless.
I think it's a good word even if it does not technically exist...
@@hankschannel it’s a fine imaginary word. Also this is the perfect time to say i bought your socks and i love them
Much better than gormful. IJS
I think one of my biggest worries with the stance that people who can afford it should pay more to get time back also translates to the flip side that people who can't afford it should have to wait longer. Not sure how I feel about a society that forces long waiting queues onto those with fewer means (which we already see at theme parks, airports (global entry), and even parking/traffic laws ... wealthy people can afford to speed or park illegally).
It's not zero sum so it doesn't translate that way. You're either willing to pay more to wait less or you wait the normal amount of time. You're not forced to wait additional time. My colleague having global entry doesn't imply that getting through security takes longer for me.
@@BTrain-is8ch I mean if anything, it might imply a shorter wait for you since everyone with global entry is either not in the same line as you, or if they are is speeding up your line by being handled faster.
The global entry argument isn't as valid when you consider Mobile Passport control, which gives you access to an expedited lane for free.
@@BTrain-is8ch That depends on the program. Global Entry and TSA Pre genuinely save time for everyone involved by pre-empting some of the work. But many airports have programs that are just paying money to go to the front of the line.
💯👏👏👏💯 this!
well put, sir, very well put indeed.
ps. 😍 the profile pic - your li'l doggie is TOOO flibbin' cute!!!
The passion and excitement in your voice over burgers and fries kept me smiling for nearly 10 minutes.
I always appreciate your uploads, Hank. Thanks for sharing.
that factor ad was extremely jarring
In 2014 most of the people around me stopped drinking Coca Cola for Gaza. The BDS list I was handed at that time was several pages long & I kept forgetting which soda was & wasn't from the same company (Oasis or Fanta or SevenUp?), so I just tried to stop having soda at all. A few years later I had managed it & now I can't drink it even if I want to, I just find it too sugary. Boycotting McDonald would have been unthinkable before, but once you stop drinking soda, buying stuff at McDonald is hard, you can't do the menus, so I had been going less & less anyway. So the BDS campaign basically improved my eating habits (which all counts for nothing, I get bubble tea instead...).
I relate to this comment. When Starbucks took an anti-union stance and condemned a union for supporting Palestine, I dropped Starbucks completely. I found that I didn't miss it at all, and it wasnt even that convenient. I spent more money at local coffee shops and got much higher quality goods for the same or even lower prices.
Lol, I did the SAME thing....boycotting Starbucks, although I now make coffee at home, bit I use pretty high quality ingredients.
It totally improved my life overall.
Crazy that "everyone has access to the app" is now normalized. I have a 7 year old Android phone. Most apps no longer work on my phone, because they require a newer version of android to run. Old apps stop working because they force you to upgrade to the new version. And let's not forget that smart phones are EXPENSIVE. Not everyone can afford one.
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And some of us that can afford them don't want them! I value my attention!
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I had an old Android and not only were some apps not compatible, I just didn't have enough SPACE for all the apps people wanted me to install. Older phones didn't have as much memory. If I didn't wasn't to use that app at least once a week, I didn't put it on. Memory was too precious. I finally had to upgrade because the phone wouldn't hold a charge for longer than an hour and that is no longer a "mobile" phone. I couldn't afford the latest, so I looked for a refurbished phone not too old that had as much memory as I could afford. 6 months along, and I'm still surprised every time I remember I CAN install another obscure but handy app.
8:00 but it shouldnt cost me my time, effort, and goddamn sanity to just save a few dollars to make sure i can pay rent and the bills and still also eat
6:29 the level of how much difference having the app makes for so many fast food places is wild. My grandma enjoys getting fast food and then sitting in the car and people watching. I do too! So when we do this together, she’s shocked at how basically the food costs the same when we’re feeding us both because I order through the apps or use app based coupons.
Hank, can we talk about Factor's use of the phrase "Chef Prepared"? Because _no it isn't,_ a chef is someone that _designs recipes_ and a cook is someone that cooks them. Factor does not have an army of chefs cooking their meals, that would be an incredible waste of money.
oh, is that title super important in the industry?
@@geeksdo1tbetterIt is. A chef is usually someone with a trades certification who went to culinary school. You can expect them to have a lot of background education about the chemistry, culture, supply chain, etc. of food. Cooks simply follow the instructions that the chef provides them, so they require minimal (if any) prior experience/training.
As someone who used to work in advertising, I suspect that rest of that phrase was very carefully worded. Perhaps they would argue that "chef-prepared meal" works like "chef-designed meal" where a chef prepared that "meal" (here used like "recipe" or "menu") once upon a time. Absolutely very misleading.
@@geeksdo1tbetteris an engineer different than a construction worker?? 🤔🤔🤔
@@geeksdo1tbetter Well... kind of. It isn't a protected title. They could just as easily call them "engineer prepared" meals, as "engineer" isn't protected either (although Professional Engineer _is_ protected).
That said, the general consensus in the industry is that chefs design recipes, and they also are typically the managers of the cooks. But honestly, the only thing it takes to become a chef is to convince someone to call you one.
As a truck driver and welder who definitely can give off the vibe of someone who would absolutely never order a little burger i now want to in order to break the stereotype but their food is so good I just need that second patty.
order 2 little burgers but no fries!
Big way to break the stereotype: bring in all your welder and/or trucker friends, order 2 littles per person, split the fries appropriately by the group numbers. 2 littles means twice as much bread AND toppings.
And then there is that little sense of comradery and community that comes from fighting over fries XD
I absolutely love this!
Your videos the past few weeks have been riveting
I feel like the discussion of 'price differential' here kind of allows for the idea that a lawyer's time is worth more than that of someone who is 'price sensitive', which doesn't sit right for me. The people who are financially worse off are still being asked to give their time and their data to compensate for their lack of money. Those are costs too - how much less are they really paying?
I think about this a lot with travel, where I can easily lose half an hour/45 minutes shopping around, looking at bus routes, booking my tickets through janky platforms that don't have booking fees in order to save money. I agree it's better than not having that choice, but I think it's a system that still places ultimate burden on poorer people.
(All that said - really interesting video!)
Does the McDonald’s app tell you if the shake machine is down at your local store? If not what are we doing here?
The stores can mark ice cream items as unavailable and often (but not always) do.
In my experience, it usually does. The employees can set the app so it stops selling those items at their location. But there is an element of human error in that they can accidentally forget to do it, or they might just leave those items perpetually disabled because they don't want to deal with it.
Why should it? The answer is always yes.
_Asking the real question here!!_
The other reason why McDonalds wants you to use the app is that the terms of sevice include waiving your right to a trial against them in court, in other words, you can't sue them if you have ever used their app.
The thing about coupons, sales, etc. that I've found frustrating as someone constantly living paycheck to paycheck, is that it ends up being a lot of work to seek out the best deals and make sure you're not paying too much for something. I only learned that King Soopers is SO MUCH CHEAPER than Walgreens when it comes to prescriptions after switching because a KS was closer to me, I had grown up going to Walgreens and just assumed all pharmacies charge about the same amount. With my physical and mental disabilities, I often rely on food delivery and know that I'm being charged more for the "convenience," even though for me it's a necessary service. I agree that people picking up my food and groceries should be compensated well, but I just wish there was a better way for people who use delivery as a need to pay less than those who can afford to use it as a convenience, like you said. It's just all so complicated, and of course this is all on a background of companies jacking up their base prices so that even with all the discounts they're still making a profit. It's all fucked.
hank I love your videos! I always learn something new and it makes me feel better about my day :)
“Four point two dollars”
So... Fotwenty
It's that time of day again...
This seems absolutely normal to me...
@@hankschannel All spreadsheet programs have number formats!
Because you live in Missoula, where they regularly celebrate 'Hempfest'@@hankschannel. I think you might be biased
When I lived in a place where McDonald's was on my way home from my night shift job, I used the "any breakfast sandwich for $1" coupon a lot and it saved me so much money with the lifestyle I had back then. My McDonald's was in a Walmart so I'd buy a big thing of orange juice to last for multiple days, and use that coupon about 3 days a week. It was probably unhealthy for me but I was struggling with money, had trouble getting large amounts of groceries home (this Walmart was my bus stop and I still had to walk 2/3rds of a mile to get home)
"this isn't supposed to be perfect and I think you can tell FACTOR -" absolutely killed me. A+
Issue with price discrimination: when combined with mass analytics (so they REALLY know how much YOU make, and what your disposable income is), and subscription-ification,
It is very easy to imagine a world we’re the vast majority of people lives day to day, subscription to subscription, with every price tailored exactly to what they can afford, and thus have no extra money saved and no way to socially move up. (Not that it’s easy now, but this would essentially become a money in - money out equation with most of the humanity removed)
The "little" burger affect is totally a thing. I have seen guys that usually would never get a double order it because they don't want to order the widdle chweese burger
And then they make the next size up just a little bit more expensive so people also think "well I was going to get the little but the regular is just a better value" even if they don't want a big burger.
Internalized toxic masculinity really got us fucked up bc I was doing that shit without realizing it until hank j called me out
This is super nitpicky (apologies). I did a double take when you responded negatively to the comment about Five Guys difference is quality. It IS about quality. Five guys burgers are made fresh at the time of order. The potatoes are cut, water soaked, and fried in the store. McDonalds is the opposite of that (precooked meat patties pulled out of a warming drawer at the time of order). It’s not just the cost comparison that denotes value, but the quality of the ingredients and how they’re prepared. Since McDonald’s is so close in per gram/per calorie cost, then I’d argue you’re getting far less quality for the money.
Now … excuse me while I go get myself some McDonald’s fries.
This! Next the spreadsheet needs columns for PrepTime Per Dollar or something!
I'd like to see some mold per dollar attached to the McDonald's side. I worked at McDonald's for 3 days and I gotta say, they have no idea that pouring huge bags of wet, half-thawed, uncooked fries in a dispenser to use throughout the day will grow mold. That's not the only instance of mold factory conditions, either.
Frozen fries are great. If they're fries (and not like roast potatoes) I don't want them fresh. That's how you get In n Out.
I think the "it" being refuted in this particular "it's about the quality" is the reason for the price difference, not the reason people prefer it. Basically - quality ingredients can't explain a price difference when there is (nearly) no price difference per unit ingredient. The price difference appears to be almost solely about the quantity, not the quality.
@@TheSongwritingCatbruh
5:59 oh my gosh Hank read my comment
I realized a couple years ago the phenomenon you’re describing about how willing I am now to spend a little money to save a lot of time and effort. College student me had what felt like infinite time to eke out value on things and working professional me couldn’t care less about coupons if it takes me time to get the discounts.
Since you evidently read the comments, just going to say that Factor is pretty terrible. I have some dietary restrictions and they were out of something I ordered. *Without asking me*, but still charging me (and Factor isn't cheap!), they substituted something they were out of in an order of mine. They sent me an email saying "oh we're out of this so here's this other thing that violates your dietary restrictions lol enjoy".
How is the packaging situation? I've read that Hello Fresh and Factor are pretty bad on packing small quantities of food in a lot of extra paper/plastic.
Factor gets sent to you like a frozen dinner tray, so it’s one plastic tray, sometimes a small plastic sauce container and lid inside, and a sheet of plastic lid, and that’s in a cardboard sleeve.
The shipping box uses paper insulation padding (no plastic or metal layer) and plastic water pouches frozen to ice. The packs can be melted and then used for watering plants and recycled, according to the pack marking.
So all in all I’d say significantly less waste and more recyclable products than Hello Fresh, which has each component individually wrapped in plastic, uses plastic insulation padding with a metal layer (to my memory) and has non-water ice packs.
Argh! Did you have an option of requesting No Substitutes after that? Or even, getting a refund for that part of your order? so frustrating!
I didn't realize Factor was basically just frozen dinners until I finally looked it up. I have no idea why anyone would pay for it. I actually ended up subscribing to Hello Fresh a few months ago and I don't regret it. Yes, the price is too expensive, but when they screw up (and they will send you rotten scallions or carrots at some point) the compensation is way more than the value of those items, even at their prices (I just got $20 credit for not sending me enough potatoes and carrots). I don't think the packaging for Hello Fresh is that bad. It does vary depending on your distributor as far as I know. I think eventually everyone will "graduate" from Hello Fresh to just buying their own stuff, but it's more about convenience and consistency. I pay more for the food, but I use all of it with almost zero waste. And since I have to plan my meals a week ahead, I can't just decide to eat mac n cheese every night instead of something healthy.
If this keeps going, I really want a comparison to the cost of cooking at home or a decent sit-down restaurant in Missoula but I don't know if that's going to happen with a Factor sponsorship.
Hank saying, "irregardless" at 3:00 has to be rage bait and I guess I'll take it
well, language is defined by how we use it. literally means figuratively, and irregardless is a word, and means regardless. words are weird!
1. It's annoying when the container of food is not big enough to actually contain the food! This happens with fries, tortilla chips, basically all sides. I don't like my food rolling around loose, touching everything else and being crushed by other items.
2. After the initial hurdle of downloading & logging into an app, using an app is faster for me than ordering in person, because when I arrive the food is ready and I don't have to wait while they prepare it, if I plan ahead and order right before leaving the house.
3. I had no idea these places have coupons in their apps because I don't install apps for everything. I paid $7 for an order of fries at McD's the other month and I couldn't believe that's how much it costs now. I can get the same thing at a dozen other local places for the same price, so why would I go back to McD's?
Welcome from your scientist neighbor, also in Montana. I am, of course, assuming we are next door. I am assuming you are somewhere inside the Glasgow, Ekalaka (an under rated town), Hamilton, and the Yaak polygon, well, we are right next door.
Loved the video. Best of luck with your channel.
Hank, I loved the video, but I really just want to interject by saying that I'm pretty confident that price discrimination, as it is presently done, is a _serious_ problem. Please allow me to explain:
The working poor in the US, and much of the world elsewhere as well, have gradually, little-by-little, been forced into a very, very specific and very _nasty_ situation, which can be summed up as follows:
If you are poor, then you _must_ exchange large quantities of your time and attention for 'savings', at rates lower than the minimum wage, to pay for basic needs and essentials.
This has lead to a lot of low-income households suffering from some _very_ nasty trade-offs:
You can feed and shelter your children (costs money), or you can raise, teach, and bond with your children (costs time and attention), but not both.
You can care for your physical health (costs money), or you can care for your mental health (costs time and attention), but not both.
You can have devices which connect you to the wider world (costs money), or you can be informed about how the wider world works (costs time and attention), but not both.
As the market adjusts to 'factor in' this 'alternative payment', vital facets of life which can _only_ be achieved with time and attention, like family bonding, self-care, and education, gradually become inaccessible to the working poor. They not only have to work longer hours than everyone else, but also need to spend more and more of their already-strained time and energy 'bargain hunting' to pay for everything they need.
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Exactly
What Hank's saying is that if you're making $20/hr at your job, and spending 10 minutes on the app saves you $10, you're saving more money than you'd be earning if you had spent those 10 minutes working.
But someone who earns $70/hr wouldn't.
@@BassLiberators Maybe it is what he meant, but much like perfectly spherical cows or perpetual motion machines, that sort of scenario is only how things work in an idealized abstraction. _It's not real._ Just as friction makes perpetual motion impossible, market forces make 'good' discriminatory spending impossible, without _extreme_ regulations for how prices are set.
In reality, the meal would cost $10 total if companies weren't allowed to engage in discriminatory pricing, but because they _can,_ the cost of the meal is increased to $30 dollars, but people can spend 30 minutes on average to save $20.
So without discriminatory spending, both people spend $10 dollars on the meal, because that's all the poor person can afford.
With discriminatory spending, because one of the _laws of economics_ is that a thing is always worth the maximum amount of resources you can squeeze out of people, the poor person spends $10 and 30 minutes for that same meal, while the middle-class person spends $30 for it. Because you need to make people _feel_ the savings before they'll actually do the math, 'barely worth it' is never good enough. Time is very precious to _everyone,_ especially the poor, so it has to _hurt_ not doing it.
And because those without much money live in a state of _constant stress_ about their own survival, it _really_ hurts. That stress is why the poorest people are among the most vulnerable to falling into drug habits, and have the hardest time quitting. People are medicating that stress.
(Just to be clear, that's still a simplification, the real change between a world without discriminatory spending and one with it, is how long wages are frozen while inflation naturally increases prices. The minimum wage is ultimately set by the _affordability_ (not price) of food. Affordability calculations include the use of coupons and apps to save money. And all other wages are set in comparison to the minimum wage. Exact same outcome, but sneakier in implementation.)
(Edit: Real talk, the way affordability is really 'calculated' is just by measuring the homelessness and starvation rates. If those are 'normal', petitions and outcry to increase the minimum wage go nowhere, but if they are increasing to dangerous levels, then suddenly increasing the minimum wage becomes a topic 'worthy of debate' by lawmakers.)
And because wealthier people often have 10 times the wealth of poor people, they barely feel the tripled price, but poor people _have_ to expend the time, even though they have even _less_ time to spend than wealthier people, and unlike money, there is no way for _anyone_ to get more time in a week, without harming their own health and freedom. Money is a renewable resource, time is not.
That's a big part of why we've been having a lot of K-shaped 'economic recoveries', lately, where the rich get richer and the poor get poorer.
@@falleithani5411 I respectfully disagree. Not all meals could be $10 or McDonalds would go out of business.
People like Hank essentially subsidise the people who use discounts.
If some people like Hank overpay, then McDonalds doesn't need to make maximum profit on every meal. The can overcharge some customers and undercharge others
It's the same way a gym works. 90% of people don't use their membership enough basically pay for the other 10% to get an incredible deal.
Charging everyone $15 per meal only benefits the rich.
1:50 at least here in Canada the Five Guys bag fries are a measured quantity, I can literally watch the person measure them before dumping them into the bag
Nah bro one time i literally only got the cupful and I literally was about to go Karen in there because they know dam well to give me an overflowing cup.
Interesting...I wonder if Canada's regulations are tighter!
@@hankschannel I live in California and a similar thing happens. They fill up the cup, then they fill up a metal tin with fries and pour that into the bag. So your fries are whatever size cup you paid for plus the size of the tin.
@hankschannel entirely possible, though up until now I'd assumed it was a cost control measure
It's been so long since I ate any fast food (or any other restaurant food really) that I am in complete disbelief that anyone would pay those kinds of prices. And that makes me feel really old.
Now I understand why my roommate is obsessed with ordering from the app. Every time we go, the orders food in the parking lot and then we go in and get it. I've always been confused by this but never asked.
Hank, there's an entire section of corporate science dedicate to how to get consumers to do what they want. From the colors and music inside the restaurant to how big around the straw is for a Mcdonalds coke. And I have no doubt that they will find a way to repackage "surge pricing" in a way consumers don't notice. And people have a preception in difference of quality of beef from a mcdonalds patty to a 5 guys patty, but considering our meat industry is 80% run by 4 corporations it's unlikely it's any different.
They can probably use the app pretty effectively to do "surge pricing." Maybe they don't actually change their prices but if there's a day or an hour where they are getting a lot of orders they could switch to the least popular discounts. I could see something like discounts changing based on the hour of the order and if you order at three (least popular time to eat) you get significantly better coupons than if you order at noon. If a given McDonalds has so many orders that they're backlogged they get switch to the worst possible coupons and it could all be determined by algorithms.
The five guys patty was made today and not frozen, even if the cows were from the same factory farm the prep has an affect on taste
We love Hank! He's just a little guy!!!
The time value model you describe doesn’t really work when apps have quick order features. Like I have pre-saved orders in a couple of my apps.
Often times in my experience, the mobile order is faster on top of making it cheaper.
I make really good money as an engineer, but I also value putting that money into something way more useful.
Like saving a couple bucks at McDonald’s means I can put that money saved into another Raspberry Pi for my project.
Also McD used to have a restriction on their app where you could only use one coupon an hour or something, but they seem to have gotten rid of that so you don't have to have 3 people with the app, you can just make three separate orders. But this costs a lot more time, as you have to pick each one up before you can place the next one.
For me, I use ordering apps for my convenience. It may not save me in time, but it saves me in frustration of trying to figure out what I want to order on the spot as I can just read and click each thing, and see the whole menu, while fast food restaurants have mostly taken to only showing like 10 rotating menu items on their digital menu at one time and usually none of those are anything I want. In that way, the deals are like the price paid to me for doing that part of the job for them 😅
"IS A FEELING THAT I FEEL" is something that I think we all need to start shouting a lot more frequently.
I worked at Arby's for a couple months and was able to chat up the district manager about margins of profit on their sandwiches. The ROI in the fast food industry is mindboggling when you take markups into account. A roast beef sandwich was priced at $5.19 pretax and I was struck with the mind boggling info that an individual sandwich costs $.39 to make including the wrapper. Manipulation is a lot stronger when you see what the actual profit margins are. Interesting stuff Hank!
0.39 including wages?
@@geeksdo1tbetter Nope. The individual ROI on their items is ridiculous. But even with wages calculated they are still making around 400%-500% ROI. Obviously this will depend on the sandwich, ingredients, etc.
@@geeksdo1tbetter If a fast food worker earns $15 per hour, but helps make 60 burgers per hour, that means it costs 25 cents per burger to pay that person. If the cashier takes 60 orders an hour at the same wage, that's another 25 cents per burger. You could pay each of those people $30 per hour and only have to raise the price of the burger by 50 cents. I have no clue what the actual productivity of fast food employees tends to be, of course, but wages have a much lower effect on prices than people realize. What happens instead is that if a person's wages rise, then businesses raise their prices in order to capture that extra money instead of that person getting a better quality of life. That's why minimum wage has to be tied to inflation and regularly adjusted to price of living in order to work.
There was an article some years back, when a minimum wage increase was first discussed/debated. In order to pay a more livable wage, the increase to the customer was very negligible. They used McDonald's as an example. The price increase on a Big Mac was maybe ten cents, very small. Most of the cost is greed, blaming everything like wages as an excuse. This applies to everything. We live in a very greedy country.
@@skyirwin1445 I would have to agree, but as someone who used to blame greed I now blame education. If we educated our students on how to be financially literate rather than not teach them at all and throw them into college for they will know nothing about making a quarter of a million dollar investment. So TLDR, its a mix of greed and people just not being prepared. Thanks for sharing your input
When I had fast food apps, they would send notifications, like 10 times as often as any of my friends or loved ones. Too personal and manipulative. Just made me pissed in anticipation every time I got a message. It's like getting too close to a horrible person, and now they won't leave you alone.
BRUH, relatedly, the happy meal has to be one of the greatest marketing schemes ever.
A happy meal is $3.50-$4.50 where I am. Cheeseburger, fries, chocolate milk, toy, specialty packaging.
not a bad value for the consumer and honestly and McDonald’s profit margin on them can’t be so good.
But by the time my son was two he would always recognize the Golden Arches and would excitedly start asking for a happy meal.
Kids who eat happy meals and have fun and memorable experiences at McDonald’s grow up into adults who continue to have “happy meals” at McDonald’s.
They are playing the long game and it totally works.
I really appreciated the breakdown of the McDonalds app. Many loyalty programs often seem overly convoluted to me (including, sometimes, surprising partnerships between brands) and I've often wondered how it all maths out for the companies.
Making it convoluted is part of the way they make it confusing. It's like a gambling system...the more opportunities for confusing you and abstracting things the better.
@@hankschannel Honestly I'm just impressed that there are people whose job it is to keep the backend math straight so that when I spend 23 million Starbucks points to book an Air Canada flight nobody is losing money in that transaction
@@Idefilms There's a story about a guy who bought thousands of pudding cups in order to get cheap frequent flier miles. Pretty good read.
McDonald's also has strange in person/drive-thru pricing. One Bacon McDouble costs $4.85 where I am in Washington state but the SECOND burger if you order two costs $1.00. Same pricing for large fries: first one normal price, second one for $1.00
"I'm not price sensitive" is such a Hank way to call us broke.
One time I had to get nice clothes, so i went to Kohl's, because my sisters and mom love the place. It all was so overpriced, I didn't even buy anything. I asked my mom why they even like that place. Like, is there some quality to these clothes I don't notice? She pulled out some coupons and told me nobody ever pays full price at a Kohl's.
Whats interesting to me is a lot of the clothes are still more than I'd be willing to pay for them, even after coupons. But it's like you said, it's a price discrimination technique. My mom likes to get in on a deal that people like me would miss out on, even if it's still expensive at the end of the day.
This could be an entire series on how different companies manipulate people. They pump the smell of foods from the main entryway zone at Disneyland. Supermarkets are very intentionally designed based on many scientific studies. The location of certain products the lighting what shelf products are placed on. The essentials (milk, bread, toilet paper and frozen foods) will always be past fresh foods,
the deli, and most other produce.
McDonald's actually changed the recipe of their sprite to comingle with their fries to taste better. It goes on and on. Can't remember the exact name of the reddit but I think one of them is the fast food secrets club?