The CMO Interview: Russ Klein

No Offense, but This Guy's Got Your Number

BK's Russ Klein Promises More 'Edge,' Premium Products in '09

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CHICAGO (AdAge.com) -- Burger King chief marketer Russ Klein, the man who brought you "Whopper Virgins" and Facebook's "Whopper Sacrifice," says he's not out to offend people; he wants to forge emotional bonds with consumers based on areas of tension. Got too many people wanting a piece of you online -- linking, friending or otherwise? Throw them under the bus for a free Whopper!

Burger King CMO Russ Klein
Burger King CMO Russ Klein
When offense happens, Mr. Klein said, the company doesn't exactly relish it. Instead it braces for it. But the edgy work has been paying dividends. The fast feeder has posted 20 consecutive quarters of same-store-sales growth. A rock star in terms of CMO tenure, Mr. Klein, 52, took the marketing reins at Burger King nearly six years ago, after running the same department at 7-Eleven. He has also been on the agency side, as managing director of what's now DraftFCB, Chicago. He joined Foote, Cone & Belding Worldwide from Dr Pepper/7-Up.

As Burger King's CMO, he is credited with much of the marketing that has turned the company around, including "Subservient Chicken" and "Whopper Freakout." Part of that sea change was in shifting the chain's creative business -- estimated at $294 million in measured media by TNS Media Intelligence -- from Y&R to the inimitable Crispin Porter & Bogusky, a shop that has undeniably burnished the brand's churlish persona.

Burger King is rolling out a new batch broiler, and will introduce a number of products casual-dining chains are known for, including ribs and thicker burgers. Casual dining is in the midst of a pronounced slump. Consumers who continue to eat out are generally trading down to lower-priced meals, which would seem to make a play for their popular dishes particularly opportune.

In an interview with Ad Age, Mr. Klein said to expect the same edgy marketing Burger King is known for, but with emphasis on the updated kitchen equipment. He also said the chain will continue to hammer away on its value-menu advertising, acknowledging that it was "a little late to the game" on its menu and adding that he sees a lot of "headroom" for the platform, both in terms of sales and innovation.

Ad Age: What are the challenges of operating a fast-food franchise right now? What about for Burger King in particular?

Mr. Klein: From an economic standpoint, the quick-service-restaurant space is well-positioned. For us in 2003, 2004, when we were going through our own turnaround, it was a sort of dress rehearsal for a tough economy. We were underleveraged and on seven years of negative sales, a civil war with franchisees -- all sorts of issues that a distressed business faces, and so the large majority of initiatives we undertook back then are continuing to serve us now as we move through a tough economy, including "value for the money."

Ad Age: What about the marketing in the economy right now?

Mr. Klein: We were late in the game and so we still have a lot of headroom and development room in percentage of sales, innovation, just ongoing advertising support, which we continue to give our value menu. So it's those sorts of things. That's just one example of the type of initiative that if we didn't have it in place and working, it certainly would be an even more [difficult environment]. It's one of the things that has turned us around, and it's serving us well in these times, too.

Ad Age: Let's hear about the new batch broilers and some of the more-premium products coming out this year, expected to compete with casual dining.

Mr. Klein: We now have the large majority of franchisees in North America having ordered that batch broiler. We will have about half of our North American restaurants installed within the next 60 days and probably a good third of them in terms of critical mass inside a [regional marketing area], in which we can then advertise the products that the broiler makes possible, which is the Steakhouse XT, our thick burger product, ribs, cooking everything from whole-muscle steak, whole-muscle chicken. [It makes] these products possible, because it's a variable cooking platform, and we don't have to sacrifice food safety in order to bring another cut of innovation to the market. I would say they are casual-dining quality. We don't have plans to turn our restaurants into sit-down restaurants in that sort of sense. We understand it's a car culture. Most of our business is drive-through.

Ad Age: How big is this in terms of the history of BK rollouts? The equipment is a sizable investment for franchisees.

Mr. Klein: Ultimately the market will decide. We think it will be transformational. We think it's a bit of a dark horse in sort of what's in the pipeline. It will be hard to fully place a value on what it's going to mean to the bottom line until we're on air and aggressively marketing these differentiated products. But it's a win for us on many fronts. It's easier to clean and maintain. There are only six parts this product has, compared to God knows how many [on the older equipment]. It saves gas and electricity -- 40% to 50% utility savings. It is also heats up less in the kitchen and the restaurant, so air-conditioning bills during the summer will be less.

Ad Age: As a fast-food company, your spend is locked into established franchise contributions based on a percentage of sales. But what can we expect in terms of marketing for the new platform?

Mr. Klein: We'll always run up against the guardrail with some sparks, and it will be also important for us to get across, as you've suggested, the highly differentiated level of quality that's going to be made possible by this cooking platform.

Ad Age: How important is the edgy marketing to the brand's continued success?

Mr. Klein: Certainly our brand position has been a part of our success, and it's achieved what we set out to achieve. We very decidedly went this route of leaning provocative, being on the edge, because we felt the brand had become too predictable, too staid. There were lots of other things going on, lacking innovation, the operational excellence that you see coming into the restaurants.

Ad Age: "Whopper Freakout," last year's documentary-style campaign filming reactions to consumers being told the Whopper had been discontinued, resulted in double-digit sales for the sandwich. Why was it so successful?

Mr. Klein: "Whopper Freakout" was a great example of tension and the way deprivation affects the way someone who is a loyal Whopper fan. We try to make all of our briefs hinge on some sort of social or anthropological insight that's charged up with tension. It's not like we're trying to set our hair on fire to get tension.

Ad Age: How do you approach these things?

Mr. Klein: We're looking for insight that has purpose, that is purposeful in terms of the intersection of the product or promotion with the mind and the mood of the consumer and, if it's possible, be funny.

Ad Age: You can't talk about sales gains associated with "Whopper Virgins" [last December's follow-up to "Whopper Freakout" that conducted a Whopper vs. Big Mac taste test in cultures that hadn't tasted either] because the quarter hasn't been reported yet. But as a campaign, was it as successful as "Whopper Freakout?"

Mr. Klein: That's arguable. It certainly satisfied our business objectives by most accounts. It rivaled "Freakout" in terms of the social currency it created, meaning the late-night-talk-show circuit, water cooler, blogosphere, YouTube environment. I thought it was at least a B-plus sequel to a very difficult original because of what we were trying to do. How could we, going into last December, go up against the prior year's "Freakout" campaign? We thought of the concept of the world's purest taste test, what "Virgins" would conjure up for people coming from Burger King, and the cynicism of taste test and that sort of thing. I would have to say it was at least a B-plus.

Ad Age: "Whopper Sacrifice," a Facebook experiment that offered a free Whopper to anyone willing to remove 10 friends, resulted in the axing of more than 200,000 friends in just a few days, before the network pulled the plug. What did you think of that performance?

Mr. Klein: Better than expected. In a few short days before it started to get hobbled and then taken down, we loved it for what it did. Again it tapped into a real tension that was part of the Angry Whopper [promotional] window. For us [it was] an analog of this venting and how do you get things off your chest, and don't you hate it when people want to be linked in or connected to you and you don't have the heart to tell them you don't want to be their friends? We thought it would be fun to let people throw their marginal friends under the bus for a Whopper. We loved the reaction we got in the market.

Ad Age: Do you ever try to piss people off for cachet among your core users?

Mr. Klein: Never do I approve a piece of work or grin that this is going to piss someone off and I'm happy about it. There will be times when I look at a piece of work and say, "This may create some reaction around the edges," and we almost sort of inhale and exhale, and we'll brace for it rather than cherish it. We never try to offend people, but we always try to dramatize the tension we've identified in our creative briefs.

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