KFC had lost its way.
While the fast-food chain was growing internationally, by 2013, it had faced seven straight years of quarterly store traffic declines in the US, causing it to lose 40% of its business.
Fueling the struggle was an out-of-touch brand, said CMO Kevin Hochman at the ANA Masters of Marketing conference in Orlando last week.
“We had a clear value system that we walked away from,” he said.
To turn things around, KFC went back into its archives to uncover what made its brand resonate back in 1930, when it was launched by a quirky gas station owner named Colonel Sanders. They realized their biggest opportunity was the Colonel himself, whom they’d removed from KFC’s branding in recent years to appeal to a younger audience.
Three years after bringing back the Colonel as its mascot, KFC has posted growth in the US for 12 quarters straight. But while branding played a huge part in KFC’s turnaround story, it wasn’t traditional advertising that got the business on track, Hochman said.
“We’re making the brand young again by using modern media,” he said. “A 30-second ad wasn’t going to get us out of our issues.”
Hochman spoke with AdExchanger.
AdExchanger: What surprised you about the success of bringing back the Colonel?
KEVIN HOCHMAN: I don’t think I was prepared [for] how much it would travel and how fast. We knew we were in the right direction. It’s given us a stability that we haven’t seen in a long time. We’re on our fourth year of growth now, and a big part of it was the campaign.
How do you tie business growth to the campaign?
When we started, we looked at brand metrics, like “Is KFC a brand for me?” A couple of years ago, our insights leader said, “Why don’t we look at brand metrics that are correlated with sales growth? That would be a smarter way to measure the brand over time.”
So we’ve done that. A lot of [our metrics] are around relevance and consideration. It’s kitchen logic: If you grow your consideration, you probably grow your sales.
You did a lot of experiential marketing for the campaign. How do you get to those nontraditional ideas?
We start with a big idea. Let's take the Crispy Colonel. Seventy percent of people didn’t know about a product that was 40 years old. How do you make people aware of that?
Our advertising agency, Weiden + Kennedy, came up with the Crispy Colonel, [whose] skin is tan just like our chicken is crispy. We take that idea to the integrated agency team [which includes people from Weiden + Kennedy, Spark, Edelman and UEG] and they come back with ideas about how to extend beyond broadcast TV.
UEG came back with extra-crispy scented sunscreen, because “the only thing that should be crispy this summer is your chicken.” That spread to the agencies. Weiden made a fake infomercial with the Crispy Colonel and we worked with our digital team to distribute that online. That creates a whole wave of news for another couple of days.
How has your media mix changed over time?
When we started, we were 90 to 95% TV. We’re 70% to 75% now, which feels right. But the last few years, we definitely changed our mix away from TV. We’ve been good at digital brand building, content marketing, online video and programmatic.
[Digital buys] depend on our objectives. We can get a shot in the arm on awareness by buying the YouTube masthead. On the Zinger [spicy, crispy chicken sandwich] launch, we knew there were a lot of people from Asian countries who loved the flavor, but [it] doesn’t exist in the US. So, we targeted people from other countries living in the US, and had very good ROI.
[Programmatic is] small part of our buy because right now, we don’t have a big mobile ordering business. As the Uberization of food happens, we’re going to have to get very serious very quickly about programmatic to get closer to the point of purchase. I expect that to grow over time.
McDonald’s has a partnership with Uber Eats. How are you building a more on-demand relationship with your consumer?
This on-demand economy is just going to get bigger. Food is top of mind because people want what they want when they want it. Where do we stand within that landscape? How do we work with partners and aggregators or have our own site, and then drive demand, creation and awareness? That’s the stage that we’re in right now.
I hope next year we accelerate that. If we do, we’ll spend more in digital and getting closer to the point of purchase. We better [build delivery capabilities] because we don’t have them in-house right now.
How do you get the rest of your organization to buy in to that project, which extends beyond marketing?
Mobile ordering is a bigger operations and IT project than a marketing project. Once you get that capability, marketing figures out how to drive demand to it.
But it’s complicated. You want to be able to order, deliver and pick up. That should be the same interface. Restaurants have different menus and pricing. You might have different pricing for delivery than for pickup. We have legacy systems. How do you integrate that?
And then there’s the brick-and-mortar part. I see the order, I make it and where do I put it? How does it get to the customer? Where does a driver pick it up? These major changes happening to business, that is an IT, ops and marketing project, and we’ve got to collaborate on that.
Does your organization understand that?
I think so. A couple of years ago, it wasn’t understood, but there’s been enough progress in our industry. Our competitors have done a good job. People get that it’s not just a marketing problem.
This interview has been edited.
Corrections: KFC buys digital ads on the YouTube masthead, not mass tape. Zinger is a sandwich, not a sauce.