AmRest KFC Satisfies Customers with LoyaltyPlant

AmRest, a franchisee of 1,150 restaurants in Central and Eastern Europe, was struggling to bring diners back to its KFC locations, but since developing its KFC Club mobile app with LoyaltyPlant, the outfit has seen the advantages of engaging customers in nontraditional ways.

In late 2015, the Wroclaw, Poland–based organization’s goal was to distinguish its 500 KFC locations from the competition by redesigning its outreach methodology. “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.”

Mobile was the obvious choice for connecting customers, but “99 percent of the applications we see on the market tend to bring simple features, which are quite boring,” Kosyrev says. On the typical restaurant app interface, users can see menus, find locations, give feedback, take part in bonus programs, and use digital coupons. To stand out, AmRest had to get more personal. “We decided to build a better, a new level of loyalty—we call it True Loyalty,” Kosyrev says.

AmRest chose LoyaltyPlant largely for its strong presence in Eastern Europe and its experience developing secure apps that prevent fraudsters from hacking into them to claim unearned offers—a particular risk with homegrown systems, says Kosyrev. Furthermore, LoyaltyPlant’s technology allows users to see how their application is performing and access the results.

The points-based application “allows us to communicate to different groups of customers based on their behaviors, in terms of their visiting frequency,” where they live, and which store sites and menu items they prefer, Kosyrev explains. For instance, a student at a university who has opted in for push notifications and agreed to share geolocation data might get a limited time offer on a menu item he purchased in past interactions. Because the system knows the user’s proximity to store locations, it might incentivize him to visit one nearby. Since the app links with the store’s POS technology, sales associates can address patrons by name when the text appears onscreen.

With no customer record technologies save for its in-store POS systems, AmRest rolled out the app in five cities within just two months. “In the cities where we promoted the app and offered it, we’ve seen roughly 5 percent of the city population download it,” Kosyrev says. “That’s roughly every 20th citizen.”

The most surprising fact, and the strongest indicator of success, Kosyrev says, is that 25 percent of visitors use the app during visits. “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 have seen a 5 percent average incremental increase in sales compared to stores that haven’t yet implemented it. One store that was particularly effective at promoting the app saw 12 percent incremental growth compared to a similar location over the same one-year period. In a March survey by AmRest, 74 percent of respondents said they visit KFC more often because of the app.

A year and a half after launching, AmRest estimates that the incremental marginal profit for the app at one high-performing KFC location was $16,736. Kosyrev says AmRest will continue to work with LoyaltyPlant to improve the app. On the docket are a preordering system that allows customers to skip lines and gamification options that increase engagement by rewarding various tasks and missions. 

The Payoff

Since launching its KFC Club mobile app with LoyaltyPlant, AmRest has seen the following results:

• 5 percent of the population in participating cities has downloaded the app;
• 25 percent of customers use the app during store visits;
• a 12 percent revenue increase in one store that had the app compared to a similar store that didn’t; and
• $16,736 in incremental marginal profit at a select high-performing location.