Like most professional practices, we use case studies to tell success stories, to illustrate how we help clients reach their goals. This is a case study in reverse, a cautionary tale rather than a celebratory one. And we’re not just saying we told you so.
Well, maybe we are, a little.
On December 4 last year, eighty-two days ago, we wrote about the launch of Subway’s Sub Club program:
Just two years ago they introduced the three-tiered MVP Awards, supported by major media and replacing the existing MyWay Rewards. At the time we wrote that multiple tiers seemed a bit too much for a sandwich chain, introducing unnecessary complexity.
Well, it took just twenty-seven months for Subway to announce the launch of Sub Club, replacing MVP, which replaced MyWay…
And I guess we weren’t the only ones to find MVP inappropriately complex for a sub chain, since the new program features exactly no tiers and an earn/burn structure taken from the simplest of all program designs – the punch card. Of course the punch card is digital, but it’s the same structure corner stores were using fifty years ago: buy three, the fourth sub is free.
Already we’ve been hearing that many franchisees are up in arms, furious about the cost of the new program – an effective 25% discount. Could such a franchise-dependent brand have launched a major program without consultation, input, and alignment from the owner / operator community?
Fast forward to this week. The Street is reporting that the sandwich giant has made broad changs to the Sub Club program. Gone is the free sub and digital punch card, replaced with a points system which returns roughly 5% on member spend. Livid loyal customers are sounding off on social platforms, considering that the short-lived, ill-considered free sub offer returned 25%. And some 5,000 franchisees (out of roughly 19,000 US locations) signed petitions demanding Subway pull the profit-killing program.
A couple of Reddit posts:
“They are going to piss off a lot of customers with this change,” user Discipulus42 commented.
“Well jersey mikes is waay better and worth the money anyway. easy choice,” said user bbqfetus01.
Fun’s fun, but we really hate to see marketers make unforced errors like this.
In today’s environment, when customer retention is critical, it’s more important than ever for brands to avoid mistakes like Subway’s.
If you’re responsible for engaging customers, building and retaining customer lifetime value, please reach out to us. We’d love to talk about your retention challenges, perform an audit to identify gaps, vulnerabilities, and opportunities, and map out strategies and tactics to address them. Our fees are modest – VERY modest when weighed against the cost of a big mistake. Just ask Subway.