Last week you learned a valuable lesson (no, not that Oprah is queen – we already knew that). You learned, hopefully, not to underestimate the power of Word of Mouth.

To recap, for those who haven’t been stampeded in one of your locations within the past week…

You as a brand, interested in dipping you toes into the healthier side and challenging the “F” that is the center of your acronym (you are brave!), decided to launch an online coupon for your new “Kentucky Grilled Chicken” line and seed it with the ever so subtle and non-influential (ha!) @Oprah.

The coupon was for two free pieces of grilled chicken, two sides and a biscuit to anyone who downloaded and printed it within a two-day period.  By your brand’s own analysis and admission, according to your spokesperson and Ad Age however, it wasn’t the Big O who caused the premature canceling of the promotion and in-store riots, it was the WOM-driven sharing of the promotion.

According to this very informative review of Chicken-Gate in Ad Age, KFC/KGC banked on big Oprah numbers. You took O’s projections for number of coupons based on other offers from her show and then subsequently doubled them.  You estimated about 10.5 million coupons were downloaded, which you could have handled. But then, the kicker comes in – in what I can only believe to be an obvious twist of fate without unique codes and a system that can detect them, the coupons were photocopied and shared from friend to fast food loving friend.

Adding mega fuel to the grill, you apparently didn’t properly brief all your chicken purveyors.  You see, my non-Yum Brand enthusiasts, KFC is not only company-owned – there are franchisees across the country (and it is a recession). And they aren’t giving you their chicken without Colonel Sanders reimbursing them. So they do what all people trying to curb costs in a harsh economic climate would do – act completely unaware and utterly unwilling to accept the coupons. At least that is what has allegedly happened several reported scenarios that we have learned about thanks to our friends at Consumerist who are always clucking around the latest promotional scandal.

All of this adds up to a public relations disaster with consumers now pacified with a free Pepsi (really KFC, not even a drumstick or two? or better yet how about a Dr. Pepper?) left angry and annoyed.

Believing that you  hadn’t learned the Starbucks lesson in the inevitable WOM of coupons seems unrealistic. I can’t help but believe that you WANTED this mega success turned disaster of too much consumer interest to happen. The amount of precedence (see below) makes your unawareness just not seem likely.

And this could have been deemed a total and utter success, if you just would have set better rules of engagement.

Oh, KFC… If only you had handled it better – with unique trackable codes or printing system, some type of CRM integration (which would have given you more measurable results and consumer qualification for a deeper relationship marketing after the fact – building loyalty with your new grilled friends) or when the chicken hit the fan, with a better crisis plan in place.

As I am convinced you know, with downloadable coupons, the ability for it to spiral, especially in a recession and for a FULL MEAL is inevitable. Consumers live and breathe a brand throwing them a free buck.

But have no fear, KFC, a few of your friends have made just as big of a mess of things as you have. If only you had heeded their example.

DR PEPPER

Dr Pepper said it would give everyone in the country a free soda if Guns N’ Roses released its much anticipated album “Chinese Democracy” before the end of the year.  This promotion culminated in the band’s lawyers getting nasty with the brand stating that G ‘n R are “outraged at the treatment of their fans and the American public in general” after Dr. Pepper’s site couldn’t handle the traffic and repeatedly crashed when they attempted to honor their promise.

After mega backlash in the blogosphere for seeming to be unprepared for the consumer response, Dr Pepper extended the offer for a few more days, but continued to receive tons of criticism as a result of the incident. Note to Dr. Pepper: if you would have offered us all a partial refund for the album (what a let down it was) all would have been forgiven

SUBWAY

Your footlong friends Subway did away with their iconic and beloved (by sub fans, not by me) stamp loyalty program that was born way back in the 1980s after (duh) realizing that there might be some fraud going on both with consumers and internally with their franchisees with counterfit stamps and cards.

The breaking point? A roll of the stamps being sold on eBay.

I think they’re redeeming themselves with the big Chuck promotion, though. I’m all about the Save Chuck bandwagon. Maybe you could spin yours into saving Lipstick Jungle? Or Kings? I love both of those programs. I’d be happy to help. I bet Brooke Shields and Ian McShane could get behind some grilled chicken.

QUIZNO’s

In other sub disasters, earlier this year, your grilled sub friends, Quizno’s ran into some trouble when they announced their million sub giveaway (aka free sandwich) (see a pattern here?)  The problem, which seems like it might be a bit of yours also, was many of the company’s franchises didn’t participate in the “million sub giveaway” leading to mega consumer backlash.

It is unclear if they ever truly hit that magic million number.

And, the ultimate king of coupon PR disaster is of course, your friends from the land of eternal rain, Starbucks.

STARBUCKS

Trumping all of the above, your Seattle friends ran into a class-action suit after they tried a free coffee promotion way back in 2006. Starbucks emailed printable coupons for free iced coffee drinks to employees urging them to pass the coupons on to friends and family. Obviously, their friends & family hit the fabulous “FORWARD” button and the promotion got a bit out of hand.

After 38-days Starbucks announced that they would no longer honor the coupons.

So, in summary, my friends in mashed potatoes & chicken, I am suggesting that you curb this crisis with some innovation. Do a promotion that honors and activates your influencers.  Use them as the spark that fires up the grilled fire, in a positive, trackable, and controlled manner.  Rally around them to introduce your new health-conscious option.

You will spark word of mouth and have a demonstrated ROI that makes your loyalists, your new friends in all things grilled, the blogosphere, AND your franchisees happy and full.

Need an agency to help you out? This is right up our alley. Drop me a line.

Your friend in all things grilled, mashed & gravy covered,

Sarah

The videophone was a revolutionary product that was featured prominently in the 1964 World’s Fair. Huge amounts of time and money were spent creating it and just because it was technically possible, it was predicted that there would be an enormous demand for it. But it turned out that no one actually wanted a videophone. In fact, that the parties cannot see what each other looks like is viewed by most people as a major benefit to voice-only communication not a limitation.

When I worked in Interactive Television, every year there would be two or three companies that invested a large amount of effort in developing systems to allow users to click on a person on the screen. The envisioned killer app for this was inevitably buying what the person was wearing, the example being whatever happed to be the hit show of the moment such as Sex and the City. Even ignoring the difficulties of coordinating the business cycles of television and fashion to have products on shelves when a show airs, it was always a cumbersome user experience. TV shows are edited (such as cutting between two people having a conversation) so timing a click to be on the intended person is difficult. It would be much easier to simply select that actor from a menu. The hubris of these technologists is such that one company even blatant stated that TV shows would no longer need to be edited as if it were a flaw that would finally be corrected with their product.

Now with location based services, the holy grail is evidently walking down the street and getting beamed a coupon when passing by a certain vendor, usually Starbucks. Apparently the technologists’ vision of the future is being bombarded with offers as we stroll down a city street, even though everyone at the conference admittedly had no desire for this much less the average person. But these efforts perpetuate because it makes a good trade show demo and an even better pitch to a client or venture capitalist. Unfortunately, as we’ve seen in a previous post, selling the client on the presentation rather than the result usually leads to something that no one actually uses.

Modern humans evolved about 200,000 years ago and we all have the essentially the same brains as our ancient ancestors. It’s amazing that something like a film can deeply emotionally engage us, but it somehow taps into the way our minds work. Social interaction whether around a campfire or on Facebook hasn’t changed much; people still want essentially the same things whether it’s to flirt or boast or establish social hierarchies. Technology and media that address human needs or solve human problems can be very successful. Some companies like Apple are amazingly adept at this. Products that simply demonstrate their technical capabilities are doomed to fail.

This can be seen in My Starbucks on Facebook. It is a very well done gifting application, so well done in fact, that most people probably think it is an official Starbucks application. The Starbucks logo and numerous graphical assets of Starbucks products have been incorporated into it. This association with Starbucks, which has many avid followers, is a major factor in its popularity. It has over half a million installs. If it were just “my coffee”, it would likely have gotten nowhere near that many users.

The two college students who created it are not trying to hide the fact that they did this without Starbucks’ permission and include a disclaimer on the app’s about page. They are making money from advertising incorporated into the app, none of which goes to Starbucks, but they probably feel they are actually doing Starbucks a huge favor by promoting their brand. Maybe they are. It is certainly the view shared by many as represented by Nick O’Neill of AllFacebook who wrote, “If I was a brand I would be extremely happy about this.”

Perhaps nothing serves as a better example of the issues involved than the saga of Scrabulous, an online version of the game Scrabble which has become a huge hit and makes $25,000 a month for its creators, two brothers in India. Hasbro, the owner of the brand which has licensed the online rights to two other companies, has threatened to sue to have it removed from Facebook. Needless to say, the fans of Scrabulous are upset and many bloggers seem to hold the opinion that Hasbro should buy out Scrabulous as exemplified by Josh Quittner of Fortune:

If I were an evil genius running a board games company whose product line spanned everything from Monopoly to Clue, I might do this: Wait until someone comes up with an excellent implementation of my games and does the hard work of coding and debugging the thing and signing up the masses. Then, once it got to scale, I’d sweep in and take it over. Let the best pirate site win!

Is this the new business model for aspiring entrepreneurs? Don’t bother to negotiate pricey licensing deals; just find a hugely popular brand and leverage that popularity to create successful unofficial products, and then wait for the big pay day from the brand that is either grateful for all the hard work or fearful of the backlash from fans.

It certainly puts brands like Hasbro in an awkward position. Who would bother to license rights anymore if the people who simply steal intellectual property are being rewarded? On the other hand, these unofficial products are helping to promote brands and fighting against them would result in negative publicity. But isn’t this “pay me off or face harmful consequences” attitude a little like extortion?

It will be interesting to see how it all plays out. In the long run, technological changes and evolving cultural attitudes will certainly transform business models and intellectual property laws.