Ogilvy and KFC have won this year’s Creativity & Effectiveness Campaign of the Year for “The greatest loyalty program no one knew they were a part of” at the AC&E Awards, held in Sydney at the end of October.
The full list of all the winners is available on the ADMA web site.
This year saw the redesign of the AC&E Awards after a one-year hiatus that included a review of the criteria and the categories reduced, with a focus on showcasing the effectiveness of data-centred, strategically driven creativity.
ADMA CEO Andrea Martens believes the re-design of the program was vital to ensure there was genuine recognition for brilliant work that can only be possible when strategy and creativity are in partnership.
“The calibre of the work and those who won are testament to our belief that creativity and strategy produce the best results when hand in hand,” says Martens.
“It made perfect sense to combine with the AMY Awards this year, which was a true celebration of digital excellence.”
Ogilvy and KFC’s successful campaign overcame the tough challenge many brands face in the quick-service restaurant (QSR) industry to build loyalty.
As a low-involvement category, the final purchasing decision in QSR comes with low switching costs — meaning a little bit of added convenience or discounting is all that’s required to tempt customers away.
According to Dane Smith, Behavioural Strategist & Regional Consulting Partner, Ogilvy, “Our challenge was to increase the loyalty of KFC customers in a space where loyalty doesn’t exist.”
To combat this promiscuity and increase the average lifetime value of its customers, many fast-food brands have launched their own dedicated loyalty programs.
But there is an elephant in the room, according to the agency behind the campaign: most customers feel that the costs of ongoing investment in a particular fast-food loyalty program or app are much greater than the incentives on offer.
“Within this context, our brief wasn’t easy: increase the loyalty of KFC customers when they couldn’t really be bothered to participate in a fast-food loyalty program,” Smith said.
The campaign tapped into the allure of unexpected rewards. Those rewards ranged from dollars off the customer’s next purchase to early access to limited time offers, to exclusive merchandise, to being the first to be tipped off that there might be a secret menu in the app.
“Borrowing heavily from the psychology of good loyalty programs and not the aesthetics, we created a loyalty program that didn’t look or function like a ‘normal’ loyalty program at all. Instead of bogging our customers down with fixed tasks to perform and fixed incentives to pursue, we discovered we could keep them motivated through the simple power of ‘variable rewards’.”
To the extent that they were trying something unconventional — designing a loyalty program that didn’t really act like one — there was a risk in the approach for the client and the agency.
“Instead of following any of the ‘safe’ rules of a rewards program, like making the prizes bigger or mindlessly easy to achieve, we kept customers steadily purchasing throughout the year by making them totally and irresistibly, unpredictable,” said Smith.
To satisfy themselves and franchisees on the risks, surprise incentives were pre-tested and monitored to see how effectively they changed behaviour.
As well as tracking steady growth in sales and in the e-commerce audience, another successful effect of this loyalty program is that it opened the door to far less conventional ways of doing customer engagement.
“By challenging the way that we communicate long-term value and the kinds of experiences we choose to offer, we can continue shaping an experience that feels fresh and distinctly KFC.”
Smith also praised the client’s engagement. “KFC is a fantastic partner and together we’re consistently pushing the boundaries as to what a loyalty program can be, and what it can deliver for our fans to keep them coming back for more.”