Helping the chicken cross the road
Updated: May 24
Chicken jokes aside, it’s currently no laughing matter.
There’s no getting away from it, we’re in tough times currently as we seek to combat Covid-19. But before looking at this from a KFC and retail food sector perspective, let’s step back to look at the broader external factors impacting CRM and loyalty.
In the world at large, it’s clear that the power of modern technology has increasingly unshackled CRM from the traditional limitations of channel, content and delivery capabilities.
We’re 3 years on now from Domino’s Pizza announcing their tie-in with Alexa which side-stepped the need to pick up the phone or go online to order. Instead, inside the comfort of your own home, all it required was saying “Alexa, ask Domino’s to feed me”. This perfectly encapsulates the ongoing blurring of operational lines between CRM, loyalty and commerce; in this case through a simple AI driven conversation. Still in its infancy, but developing at an unstoppable pace, AI gives brands the opportunity to cut through, differentiate and create meaningful value ‘in the moment’. From a delivery perspective too, you can see how this is being enabled through commerce platforms such as Magento being integrated with CRM platforms such as Salesforce.
Another example is the growing capability through digital to create ‘shoppable content’. No longer is the role of CRM primarily to pull prospects through the fabled sales funnel to purchase. Now, the marketing, service and product can all be wrapped up in the same new-age shopping venue experience. With Facebook and Instagram dominant in this space, social media is often serving as the central nervous system for this integration.
Or to put it another way, CRM has become an ecosystem. An ecosystem of everything.
However, this demands even more so, a cohesive strategy and creative approach across this multitude of touchpoints. This is where orchestration plays a vitally important role to ensure brands stay laser-focused around those pivotal head and heart connections with their customers and prospects. This requires both a broader understanding of the cultural and environmental context, harnessed to individuals’ personal, behavioural, time and location-based data signals.
This is particularly pertinent to KFC at this period of time. Through COVID, there is even more of a need to remind and forge direct brand affinity for two reasons. First, while it’s uncertain when a dine-in service can re-open, related research indicates mixed public feelings from optimistic and positive to fearful and nervous. Second, and most pressingly important, is tackling the increased buffered reliance on Uber Eats, Just Eat and Deliveroo for deliveries during this latest lockdown.
Frenemies with benefits – and disadvantages.
These delivery aggregators help create incremental volume, but at the expense of some cannibalisation and reduced margin through delivery service commissions. And they also directly control the all-important personal data collection to build and deepen those emotional and rational relationship bonds over time.
Recent research indicates 88% of the fastfood ‘youth audience’ (which makes up 22% of the total UK population) was already using food delivery as an option. This has obviously risen during lockdown – and across all age groups. So, when hunger strikes, more people are immediately thinking ‘Just Eat’ rather than ‘KFC’, when it comes to top of mind food-order salience.
So, let’s be clear. There won’t be any future fights, if KFC doesn’t win against the delivery aggregators. Nothing else is more important to avoid becoming disintermediated.
What’s the options for KFC?
Do nothing isn’t an option as highlighted above. While KFC could develop their own delivery service this would be expensive, logistically challenging and divert resource away from the core focus of serving up tasty KFC meals. Likewise, taking a similar approach to Direct Line in the insurance market and stepping outside of the aggregator space would be problematic for the very same reasons. However, there’s another way to win through cultivating direct relationships with consumers and forging more strategic partnership alliances with the delivery aggregators.
Building a differentiated value experience with consumers through CRM
KFC could take a similar approach to how hotels and airlines differentiate their in-house experience through offering consumers extra value from the indirect travel aggregator experience.
For example, those customers who choose to order direct via the app to click-and-collect or dine-in (once restaurants are allowed to re-open) would receive the full KFC experience such as fast-track service with access to special edition menu items, time/location-based offers, loyalty rewards, exclusive competitions/digital games/merchandising and other such gated content. While those who order via an aggregator would only have access to the standard menu without any of the above-mentioned privileges. However, to engage with and migrate those indirect customers over time, KFC could also include direct promotional inserts (such as a competition to win KFC related prizes) with their food delivery. This could encourage initial ‘data-lite’ collection (such as email address) for subsequent follow-up as part of a progressive engagement strategy.
However, apps are not the be-all and end-all. Remember the point made about the blurring of lines between commerce and CRM and that this has led to an ‘ecosystem of everything’.
Apps are functional gateways, but commerce can start everywhere in both digital and physical worlds. The opportunity therefore would be to create CRM content that can live outside of the KFC app platform, with a strategy the unites its broader application and an approach that uses data to optimise and enable across all touchpoints.
Developing genuine partnership alliances that benefit all parties
Also, rather than seeing delivery aggregators as an evil necessity, KFC as a well known and loved brand, could forge strategic alliances to the mutual benefit of all parties. This would be akin to the way individual brands work with the different supermarkets to drive collective footfall and sales opportunity through point-of -sale promotions.
While suggesting KFC retains providing the most valued experience direct, for those
consumers who still prefer to order via the aggregators, KFC could reward them too, for example through redemption points. By developing co-funded and co-branded ‘delivery-as-a-service’ promotional partnerships this could help grow overall footfall and wallet share for the aggregators, as well as KFC too through gaining in return a greater prominence within their apps. (It would of course also bring each aggregator’s marketing within the sphere of KFC).
CRM & loyalty is shifting from ‘bolt-on’ to ‘built-in’
Much in the same way as what Amazon have achieved with PRIME (which is in effect a paid for loyalty program underpinned by slick data collection and algorithms), those more forward-facing companies are baking loyalty into everything they do across product development, service, sales, delivery and beyond.
This also embraces the very idea that companies are only as strong as their weakest links and that any CRM activity must unite the ‘say’ with the ‘do’ beyond mere marketing veneer.
Just in the same way value should not just be locked inside the product, KFC’s purpose therefore should be about maximizing the value for their customers through everything they do and through every touchpoint, seeking to elevate or eliminate points of weakness detrimental to customer expectation and commerciality.
Thanks to the innovation of technologies such as AI, AR and voice recognition aligned with emergent data processing and analytic capabilities is it becoming even more exciting and possible for CRM to dynamically drive and connect consumer moments of value. For example, with a brand as maverick and fun as KFC this could tie the product to the service via IoT and AI voice recognition to “cook me up a ‘Finger Lickin’ Good’ KFC 10-piece family feast”. Or have your car Satnav plot the nearest KFC on your route to pre-order and have ready to pick-up against your estimated arrival time. Or encouraging you to visit your local KFC with a gamified experience to pluck from the air AR digital chicken tokens. Future-facing perhaps, but a future that’s actually technically possible now and which would help KFC to outplay the aggregators and retain first party data to improve their value to the business.
[This post is adapted from an earlier version written by the author in February 2021].