Marketing

Why customer engagement, not Colonel Sanders, is key to KFC’s U.S. turnaround

Why customer engagement, not Colonel Sanders, is key to KFC’s U.S. turnaround

As the fried chicken chain KFC attempts to revive its business in the U.S., a familiar face is leading the charge: its founder, Colonel Harland Sanders. The company recently revived the iconic personality in a string of ads and social media marketing campaigns. Saturday Night Live alum Darrell Hammond is portraying Sanders in the TV spots.

While Sanders’ image remains as the company’s icon, he hasn’t been featured in KFC’s ads in nearly 20 years. (The real Colonel Sanders died in 1980.) So why is the company harkening back to its past?

Legacy is one reason. The company is celebrating its 75th anniversary this year, and bringing back a marketing icon could get the attention of customers who used to be loyal to the brand. At the same time, the campaign also aims to lure younger customers. Reviving an iconic character could attract millennials—a generation that tends to like nostalgic marketing.

“We had lost relevance in the U.S.,” admitted Greg Creed, CEO Yum! Brands, KFC’s parent company, at the Sanford C. Bernstein Strategic Decisions Conference in New York. “Sixty per cent of millennials had not eaten KFC.”

Rich Duprey, writer for The Motley Fool, notes that the new Colonel Sanders is not a slavish reincarnation of the real person, and that the updated, “jokey” personality might resonate better with younger customers. “Appealing to younger consumers unfamiliar with the real person behind the image allows Yum! Brands to be unburdened from the comparison, even if they do provide a full history at an updated ColonelSanders.com website.”

So far, the campaign is getting mixed reviews on social media. “Can we agree that Colonel Sanders revival is terrible? Because I’m pretty sure it’s terrible,” reads one tweet. Many customers describe the ads as “creepy.”

The company’s own research shows that one in five people who have seen the ads did not like them. “I am actually quite happy that 20 percent hate it, because now they at least have an opinion,” Creed said at the conference. “They’re actually talking about KFC, and you can market to love and hate; you cannot market to indifference.”

Capturing the attention of the public is crucial for KFC as the company tries to reclaim its fried-chicken empire. In the U.S., the company’s share is now at 22 percent—lagging behind Chick-fil-A (with a 26 percent market share) and a huge drop from its 40 percent share just 15 years ago. According to QSR Magazine,  the average KFC store brings in almost $1 million annually, while Chick-fil-A stores bring $3 million in annual revenue.

KFC is aware that it needs more than a divisive marketing campaign to reclaim its number one position. The company’s parent company is investing $185 million in the next three years to renovate stores and buy new equipment. The investment includes incentives for franchisees to get their restaurants in shape faster—the goal is to have 70 percent of the restaurants renovated by 2017, according to BuzzFeed.

Kevin Hochman, chief marketing officer of KFC’s U.S. division, admits that the company needs to “innovate, while staying true to our core.” Part of that innovation is changing the company’s menu and introducing items that appeal to its drive-thru users, who make up roughly 55 percent of its customer base. The company is also considering delivery, according to Creed.

As it overhauls its business, customer engagement will be key to KFC. The brand already got people talking by bringing back a marketing icon, but in order to build on that momentum, it also needs to make sure that future advertising campaigns resonate with the millennial audience.

Tweaking the company’s menu will also require deep customer insight. The rise of fast-casual restaurants like Chipotle shows growing customer appetite for healthier options, especially among millennials. KFC will need to figure out how to attract the health-conscious millennial while remaining true to its brand.

With millions of dollars to spare and a brand with a deep history, KFC’s plans to take on Chick-Fil-A is very likely to succeed. Tapping into the company’s community of customers and bringing customer insight into the mix will help it to do so.

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