CMO World Tour: How Yum Brands managed its Malaysian YouTube crisis

Instant response is key to protecting brand reputation in the digital age. So says Vipul Chawla, a man with first-hand experience of the fire fighting needed at a time when bad news can spread instantly, and globally.

“If you have one incident, let’s say on food safety in a particular country, it can be picked up 20,000 miles away, and people can be as concerned about it, so brand reputation suddenly starts becoming very central,” says the Yum Brands Asia CMO. “You have now no option but to look at your brand in a footprint [in a way] that almost ignores political boundaries, and that is a big change in mindset.”

Yum recently had to deal with this very challenge when a cook in a restaurant in Malaysia tampered with food and put a video on YouTube. The issue exploded on a Friday evening and the brand had to organise a response team of both internal marketing and agency specialists over the weekend.

“The learning for us was that the key decision makers—when faced with a problem like this—often feel very inexperienced when it comes to dealing with this space and therefore the first response is 'Let’s wait'. And the learning is you can’t say 'I’ll pick it up on Monday morning, goodbye'. By then, God knows how many other YouTube hits would have occurred,” he says.

Chawla himself is well equipped to stay on top of what everyone is saying about brands such as Pizza Hut, KFC and Taco Bell. Equipped with a Blackberry, two iPads and a laptop. His first activity of the day is to check his Facebook and email, even before he gets out of bed every morning.

Facebook is the one social platform that has captured his attention, and he has around 400 friends, a mix of professional and personal. Over the years he has tested other options but all have failed to become part of his routine. LinkedIn he hasn’t visited in a year and a half, Twitter he got bored with after a few months and on Google+, the lack of activity makes him a rare visitor.

He has also had his content consumption revolutionised by news apps. “I’ve gone from reading a newspaper dutifully every morning to looking at six apps, whether is the BBC or FOX or NDTV India," he says. "And I guess it partly reflects some of the places I have lived in, and places I want to continue to be connected to.”

Chawla became a digital convert during his time as manager of the hair care business for Unilever in India, when the success of the Sunsilk Gang of Girls campaign convinced him digital didn’t have to be an add on.

“It became far more central and important but I think more importantly I became a little more confident about my own judgments as far as looking at ideas,” he says. “There was a time for a couple of years that I was a bit fearful thinking that 'I know nothing about this, let somebody else decide for me' because I didn’t feel confident and I would say it openly. And I think it kind of self-reinforced behaviour of what people think 'Look, he doesn’t know anything any way, why take it to him.'”

Frédéric Colas: What is the role of digital within your overall marketing strategy?

Vipul Chawla: In our business, which is really selling, fast food quick service to customers as a retail food business. It’s actually a very simple business, and fundamentally it is all about putting a Yum! on to a customer’s face every time he or she enters our restaurant or interacts with our brand whether in our restaurant or at home.

In Asia we are seeing a fair amount of development of things like home delivery, which happens through a digital platform increasingly rather than a telephonic kind of platform.

We now generate a fair amount of business over delivery and a fairly significant part of that happens on a digital platform. On a website and so on and so that’s significant because that brings in dollars. And the average ticket size for orders that go through delivery is higher than what goes through in a restaurant not surprisingly because it seems like momma’s night out or whole home meal replacement or a Friday evening or you’ve just got back from work too late or are we going out and we want to treat the kids to a pizza or a packet of so… so it’s very good business for us to get into. It’s also enabled by the fact that there is no more trust on payment through the credit card and so on you know and I think that consumers have probably struggled with that over the years as markets [IB] increasingly consumers are now saying that’s fine we can go on. So that certainly is one platform.

FC: Are you developing Android or iPhone applications where you can easily order?

VC: That’s a very exciting space to be in because there is new stuff happening there and the possibilities are limitless, apps can be developed to push information out to customers as they come near a restaurant push up offers and so there is all sorts of stuff happening there.

FC: How successful have you been on Facebook both as an advertiser and as a branded page owner?

VC: We buy advertising locally, more related with offers and stuff but not at any concerted effort. Our core effort is to build our Facebook fans and numbers within our pages.

Once they have become fans we can run short term offers limited time offers and so on. That can you give you a fairly significant short-term surge in our business. So that’s obvious and anybody can do that. We drive that hard and I think we are realising there is also immense value in social listening, so what our customers are saying about the brand and the experience. Fans tend to be very explicit well that was a great experience or a really bad experience or they loved the food or the offer or something that you were trying. I think the authenticity, credibility and speed of that entire interaction is usually valuable to us. Now the larger the number of fans we have obviously the better the quality of the feedback so that’s why.

We are new there, so in term of how to communicate with our customers through Facebook is a new skill. It’s not an existing skill whether it’s for our marketer or our agencies or for the so-called specialist agencies, if I might say so, and I think that only comes through experience. And we’ve had our share of difficult moments and great moments and I think we’ve learnt through the difficult ones and that definitely happens when a customer has had a bad experience or you roll out an offer that wasn’t executed well.

FC: What’s the percentage that you are spending on digital media compared to the rest.

VC: We have an aim of spending about 10 per cent on digital and I think we are in the more established markets closer to that number or maybe a little higher and then the emerging markets we are a lot lower so if I take our established markets like Singapore, Hong Kong, Taiwan, Japan, Korea, it’s closer to that and I’m aware of the fact there thet the emerging markets it’s a lot lower.

FC: In these established markets 10 per cent is not big compared to the time that consumers are spending online. What are the barriers to greater spending?

VC:  I think the barriers have to do again with in many ways our own leadership thinking and our own comfort with this media so that’s one part because we come at it often very rationally as marketing leaders and we asked the questions of payback and return on investment and so on. And I think that’s where in some ways the gap is, I think even today the payback and the return on investment as measured for some of these media is a lot less easily explained and understood as compared to let’s say television or press or outdoor.

FC: How are you measuring the impact of your digital marketing and how does it compare with the way you measure more traditional marketing actions?

VC: We are not really measuring it to be honest, currently it’s being done more through an act of faith. The way we look at whether it’s working or not, is based on the outcome and the business result of let’s say a campaign or an activity. My own view is that if we try and put traditional business measures on new media, chances are we will talk ourselves out of it, and I think over the years, many marketers have done exactly that. So it’s not my intention to fall into that trap.

It’s about leap of faith. And that may take three conversations, or three months. But I’d rather at the end of three months know we are in the right place as compared to saying, this is the measurement.

FC: How have you responded to brand reputation challenges in the digital space?

VC: We had a food tampering incident in one of our restaurants in Malaysia a few months ago where a cook at the back of house decided to tamper with some food and put it up on YouTube and you know it was obviously for our customers and our fans—it was not a nice experience for them to see it and we had a whole host of really anxious customers writing on our Facebook and saying: ‘Listen, we’ve seen this on YouTube and what’s really going on?’

This happened on a Friday evening and so the typical response mechanism of let’s pick it up on Monday morning was not an option. Because it went viral on YouTube and we had our Facebook pages all over the world seeing it, whether it was in Australia or the US saying,’ Hey hang on, this is happening to a KFC, what’s the problem?’

The way we had to respond to it was in the digital space, so we had to only clear with the weekend, develop our own video, saying ‘Dear Customers, yes we have picked this up too. This is the issue, this is what we are doing about it and we are really sorry.’ And we put that back on to You Tube so anytime customers or somebody saw the [film] which the original person had put up, they also saw our response.

In this space you can’t wait for too long every passing hour is a problem because it gets worse and worse and as we learnt that was the right thing to do. So that was one part of our response. The second part of our response was to get onto Facebook and dig every comment that came in and respond to every comment.

FC: Did you do that internally or call on specialist support?

VC: For the first day or so, we tried to get our own brand managers to do it and it was becoming impossible because we make the usual mistakes, the literal comment, the usual stuff that happens. But we then gotten some professional help to guide us through it but you can’t delegate it fully, because an agency only knows so much about the brand and the business so it had to really be co-created between a specialist saying these are the kinds of things you don’t do.

FC: So you contacted a specialist over the weekend?

VC: Over the weekend on a Saturday morning saying listen, we need some help here.

FC: Were they people you had worked with before?

VC: [They were] part of our agency network so we got a specialist in but we had to go through the network to find the right person and we were fortunate to find one in a couple of hours.

The other step that we took was to put in a camera at the back of house in all our restaurants just to make sure that in case an incident like this happens again we have a check. And the very fact that there’s a camera there also is a check and balance on people at the back of house.

Of course installing cameras in the restaurants took a couple of weeks but the very fact that we announced it and got off the ground was important. The final step was really about being ready in the traditional media because it went from the virtual space to a news channel but by then they not only picked up [the incident] but they should have also picked up the response so the reporting was already balanced and it then was reported as a case history of how to deal with a PR problem.