This week must be a terrible period of time for KFC China. The fiasco of its online promotion led the brand to a very big crisis. Now let’s look back to the issue and try to learn some lessons from it.

On April 6, KFC launched a digital campaign called Super Tuesday on China’s top e-commerce site Taobao. The rule of the campaign, dubbed a “one-second act (秒杀),” was set for 10:00 am, 2:00 pm and 4:00 pm on the day and involved 100 e-coupons for each “act.”

Unexpectedly, all the three types of e-coupons had been available to download from several online communities since late morning. They were soon spread out through various social media channels. One 50% off coupon for the 64RMB KFC family bucket meal was very much welcomed by consumers. It was supposed to be released on 4:00 pm and only the first hundred people who managed to grab them were supposed to be able to use them, as KFC originally planned. However, the coupon itself didn’t claim clearly on that. Instead, it was said the e-coupon could be used after it is printed and copies of coupons are also valid.

During the lunch time, consumers printed the coupon and brought it to local KFC restaurants. Most of them were rejected with the excuse that the coupon is supposed be release and used until after 4:00 pm. Consumers understood the rule although they were disappointed.

On 1:30 pm, KFC suddenly posted a statement on the campaign site, official brand site and official e-coupon site to shut down the campaign.

Dear netizens:

Following KFC releasing the first round of promotion, it received a warm response from many netizens, but fake electronic coupons for the last two rounds [of the promotion] have already appeared on specific websites. Because of this, KFC has temporarily decided to stop the second and third round of promotions. All coupons relating to the second and third round of promotions currently in the market are all fake coupons, and KFC restaurants will not accept any of them. Any inconvenience this has brought to you, we ask for your understanding. With regards the follow-up promotion, we will post a notice on the KFC official website later.

KFC China
April 6, 2010

(translated by chinaSMACK)

During the dinner time, consumers who read or not read the statement, came to the KFC restaurants with the coupons. Staff from different stores told different excuses and some of them printed out the official statement and put it at the cashier. This led to protests in many KFC restaurants by customers who felt they were cheated and being lied to. Some customers refused to leave, demanding explanations and that KFC honor their promotion.

Some consumers even order McDonald’s takeout to KFC restaurant to fight back.

Through tweets, posts, photos, videos…… complains and angers were spread out quickly and widely. Consumers insisted that the coupons are not “fake” but just leaked earlier. The attention on this crisis broke out on Tuesday night, expanded extremely on Wednesday, and (fortunately) started weakening from Thursday. However, the media kept reporting the issue heavily (indicated by Baidu Index).

.MY POV:

1. Poor Planning

The most critical piece of this issue is KFC allowed copies of the coupon to be valid (as stated on the coupons), but the rule of online promotion allowed only 100 consumers to be able to get each type of coupon.

It is probably because the campaign planners thought the limited time and quantity of releasing e-coupons is enough to limit the promotion. The coupons did not feature any unique identifiers limiting it to single-use only, the terms of use was simply copied from a normal one. They didn’t see the weak points in their plan until it was too late. They were also failed to anticipate a big discount e-coupon (Chinese consumers are very incentive driven and price sensitive) would spread as far as it can through social media.

2. Bad Response

The e-coupons were most likely leaked out early by internal leaks or mistake. Either way, KFC is so bad in controlling confidential campaign information. Leaked coupons are not “fake”, they just become “invalid” after KFC canceled the promotion at last minute. As a brand, KFC surprisingly made consumers foot the bill of its mistake. This is such a stupid and irresponsible decision.