KFC Tests Check, Coupon Combo Mailer
The promotion, in test mode since October, involves the use of Tribune's Value Check product in parts of Florida, Georgia, Maryland and Washington, DC.
"KFC is mailing multiple offers in the same piece so they can find out which one pulls the best response and also know which demographic responds to which offer," said Erik M. Haugen, director of marketing services at Tribune Direct Marketing, Northlake, IL.
One mailer features four checks with a note headlined, "Tasty rewards for our valued neighbors." Copy goes on to say, "KFC is proud to be part of your neighborhood. So we hope you'll accept these certificates as an invitation to come see us and enjoy the great taste of KFC."
Each Value Check in the package has a different offer. One gives a $1 savings for a two-piece chicken meal that costs $2.99. Another touts a free $1 add-on with a six-wings meal. Redeeming the third lets the consumer buy 10 pieces of chicken for $7.99, saving $2.75. The final Value Check offers a free cake with the purchase of any family meal.
The Louisville, KY, fast-food chain has mailed 250,000 pieces to a prospect list rented from compilers. Mail typically goes to consumers living near a KFC restaurant. The top half of the Value Check is a coupon or offer. The bottom half contains a MICR code line for the bank and a value for the check of 1 cent.
"The penny is nothing -- it's just a mechanism to get it into the banking system," Haugen said. "What it's worth to the retailer is the customer business, the redemption of the offer.
"One of the things KFC likes most about it is the operational ease of using a check. In the fast-food business, you don't want to slow down the transactional process. The other thing we've learned is that the check itself is a vehicle that's proven to generate high response rates."
Tribune Direct Marketing, a full-service direct mail company owned by media giant Tribune Co., is paid a fee.
Haugen claims the use of the Check Tracker system and its Value Check product helps increase spending amounts in the stores running the tests. That tactic also aids KFC in quickly evaluating the effectiveness of direct mail promotions in terms of response rates and return on investment. A reliable database of responders will result from the effort.
"It combines the marketing and tracking benefits of a live check with the flexibility of coupon advertising," Haugen said.
The use of bank checks to capture household-level data is not new. Nor is the use of coupons to increase foot traffic in stores. But individually they lack the punch of a coupon attached to a check.
"In order to be processed, coupons typically go through a coupon clearinghouse, and the process can take several weeks, even months," Haugen said. "Because ours is going through a central banking system, literally within a week we can track response and effectiveness of direct mail.
"The other benefit is that the central banking system is very efficient -- 100 percent of the checks get processed, unlike coupons where you have spoilage or clerk errors."