Inside KFC's Marketing Strategy With a New CMO and Agencies

In a single six-month period, KFC has upended its bucket of marketing, with a total overhaul of its agency relationships, strategy and leadership. Nick Chavez took the reins as KFC’s new CMO last November, selecting MullenLowe and Spark Foundry as its new creative and media agencies. Despite the turnover, one constant remains: Chavez confirmed to Adweek that iconic mascot The Colonel will remain a key component of the brand’s marketing.

“The Colonel is a critical part of our brand and a critical part of our brand story and future,” Chavez told Adweek.

Chavez spent 11-and-a-half years with Nintendo where the focus was on expanding from a core gamer audience to new generations of consumers. He finds similarities in his role at KFC where he hopes to add some hot sauce to KFC’s branding outreach to a wider and younger audience. With its new agencies, KFC is looking for its partners to integrate the brand within cultural conversations, but also deliver deeper consumer insights than before.

“Normally when you enter these [reviews], you’re getting a bit of a fixer upper. But in this case, their business was incredibly strong,” MullenLowe CEO Lee Newman told Adweek, pointing to eight consecutive years of same-store sales growth.

MUST-HAVES IN AGENCY PARTNERS

When Chavez was interviewing with the company, he zeroed in on what he called a “strong” and “confidence-inducing” search brief to understand his role, the direction of KFC’s marketing and what it was looking for in its agency partners.

On the media side, Chavez was specifically looking for an agency that could bring a deeper level of consumer insights than the brand previously had, as well as the ability to execute a full-funnel marketing approach with a mix of traditional and non-traditional media.

He also wanted “people that I trusted, I liked and that I wanted to work with, and we found that in Spark Foundry.”

David Calkins, evp, growth at Spark Foundry, told Adweek that KFC wanted to better balance brand and performance marketing.

“Being able to pull through the strategic story and ultimately help them drive performance with their franchisees and their locations was so important,” Calkins said.

In MullenLowe, Chavez saw a creative agency that can “move at the speed of culture, across audiences, across product lines and across media.”

To start each meeting with KFC, Newman said his team focused on a social- and digital-first approach, highlighting a proprietary tool that he called “social listening on steroids.” MullenLowe plans to track growing conversations within subcultures that are most relevant to the brand and pass that information off to strategists and creatives that can develop ideas that will resonate.

MullenLowe’s production arm Yeti also gave Chavez reassurance that MullenLowe could have a creator mentality to produce work “day after day and week after week.”

Prior to the final round of the pitch, Newman said the agency, which also recently won Credit Karma’s and TJ Maxx’s accounts, met with Spark Foundry to get additional insight into the direction of KFC’s media.

SHIFTING THE MARKETING’S FOCUS

Chavez and Newman narrowed in on centering KFC’s future marketing about its food and expanded menu.

“A little bit that’s been missing to date is bringing to life the pure unadulterated joy of eating Kentucky Fried Chicken,” Newman said.

“We have amazing food and amazing customers. We’re going to have them show up more in our advertising going forward,” Chavez added.

Newman and two other sources familiar with the review disputed earlier reports that stated during the review KFC showed Wieden+Kennedy‘s work and said it wanted similar work from its new creative agency. Newman confirmed the work was shown, but KFC wanted to move in a different direction with its creative that would increase the brand’s relevancy with KFC’s most desired audiences.

“You can appreciate and love what you’ve done before,” Newman said. “And at the same time, understand that you need to do something different.”

ENTERING THE CHICKEN SANDWICH WARS

By leaving Nintendo for KFC, Chavez exited the Console Wars only to join another battle: the Chicken Sandwich Wars.

In 2019, this competition saw chains such as Popeye’s, Chick-fil-A and KFC all vie for the top chicken sandwich. Popeye’s has long been ahead of the pack, with a dominant run during the peak of the chicken sandwich wars that was so successful that it led to an inventory snafu.

KFC gained some ground last year with its “best chicken sandwich ever” product that now accounts for roughly 9% of its sales mix, a rise from a 1% figure the year prior according to the brand’s earnings call earlier this month.

“It’s introducing a new customer and an opportunity to cross-sell them and to introduce them to some of the more recent innovations on the KFC menu that are increasingly popular as well,” Chavez said of the latest revamped menu items, including the chicken sandwich.

REACHING GEN-Z, URBAN AUDIENCES WITH PLANT-BASED OPTIONS

At the top of the year, KFC was the first of its chicken brethren to release a plant-based alternative in the U.S. The QSR announced a national release of chicken-free nuggets in partnership with Beyond Meat. The brand worked with YouTube star and influencer Liza Koshy on a campaign.

Chavez wouldn’t say if there would be a rise in ad spend for plant-based menu items, but he did note that the response to the product from younger consumers and consumers in urban markets has been very strong.

“It’s exciting for us because as we do bring those customers in, it’s an opportunity to showcase to them some of the great food that we offer including our category-leading chicken sandwich now,” he said.

In its latest quarterly earnings released earlier this month, KFC’s parent company Yum Brands revealed that the chicken chain’s same-store sales grew 5% year-over-year in Q4. In the U.S., same-store sales rose 4% year-over-year.

PURSUIT OF FIRST-PARTY DATA

Part of the reason the brand chose Spark Foundry is for its ability to harness first-party data, with Publicis Groupe’s Epsilon being foundational to those efforts. One key for the brand has been its app, which has been a way to connect with that younger audience.

“In our role as the strategic, creative and social-lead, there’s a huge opportunity to drive loyalty and frequency using the app,” Newman said.

The brand is strengthening its ecommerce channels with both the app and kfc.com, using that information to better understand buying patterns and product preferences in order to fine-tune the menu and experience, but also personalize product offerings.

“We need to earn and protect the relationships that we have with our customers,” Chavez said.

Reported by Adweek.