The 2017 CRM Market Elite Customers: AmRest KFC
AmRest, a franchisee of 1,150 Yum!, Burger King, Pizza Hut, and KFC restaurants in central and eastern Europe, was struggling to bring diners back to its 500 KFC locations. The Polish company needed to distinguish itself by tweaking its outreach strategy and moving beyond traditional methods.
“The quick-service restaurant segment, especially in Russia, is interesting in that the product, calendar, and communication strategies are all quite similar,” says Kirill Kosyrev, AmRest’s marketing specialist. “You have this crazy situation where people try to save money in any way possible. We found out that 97 percent of guests at KFC are guests of competing restaurants as well, so we decided to do something about it and built a new way of communication.”
To get closer to its customers, Kosyrev knew that AmRest KFC would have to focus on mobile devices first. He noticed that most of its competitors’ apps offered little more than simple, boring features that allowed users to access menus, find nearby stores, use digital coupons, and little else. To stand out, AmRest KFC would have to focus on personalization. It aimed for a new level of customer loyalty, which it called True Loyalty.
To achieve True Loyalty, AmRest KFC teamed with LoyaltyPlant, a mobile app developer with a strong presence in Eastern Europe and a solid reputation for creating secure apps that black out ill-intentioned fraudsters who try to hack them and claim unearned offers. Kosyrev also liked the fact that LoyaltyPlant’s technology allows companies to see how their applications are performing through metrics and results.
In late 2015, AmRest developed its KFC Club mobile app, a points-based system that allows it to communicate to different customer segments based on behaviors, visiting frequency, favorite menu items, home addresses, and local store locations. Since the system can identify users’ proximity to specific KFC branches and has data about their eating habits, it can target them with push notifications inviting them to visit their local stores to reclaim time-sensitive offers. The app also links to the store’s point-of-sale technology so sales associates can address customers by name when that information appears via screen-pops on their register screens.
AmRest rolled the app out in five cities within just two months. In select cities where it made a concerted effort to promote the app, it saw adoption by roughly 5 percent of the total population. Additionally, 25 percent of visitors use the app whenever they visit their local KFC stores.
“This is amazing because you know how hard it is to change behavior—to make someone do something additional,” Kosyrev says. “And here one in four customers are coming to the restaurant, pulling out their phones, and interacting with the app.”
Stores offering the app saw a 5 percent average increase in sales compared to those without it, though one store saw incremental growth as high as 12 percent. Seventy-four percent of customers said they visited KFC more often because of the app.
A year and a half after launching, incremental marginal profit for the app at one high-performing KFC location was $16,736.
And AmRest continues to see steady business performance from the app, Kosyrev says.
AmRest is currently focused on engaging customers through gamification tactics. In April and May, it tested a “Lottery” feature with prize incentives to boost store visits. “Results were great, both in terms of the app and business,” Kosyrev reports. Same-store transactions grew by 10 percent, despite a 7 percent loss on checks, sales grew by 3 percent, and the total number of app installations grew by 12 percent.
- Five percent of the population in participating cities downloaded the app within two months of the launch.
- Twenty-five percent of customers use the app during store visits.
- Stores with the app average a 5 percent revenue increase,
- with one store reporting a 12 percent increase.
- Seventy-four percent of customers visit KFC more often because of the app.
- Incremental marginal profit at one location totaled $16,736.