Today we’re going to dive into the sandwich wars.
As the uncertain economy is turning QSR visits into something verging on luxury for many families, loyalty becomes increasingly critical in helping customers decide where to spend their quick dining dollars. Value, convenience, and quality are powerful factors, but loyalty could be the tie-breaker. We’re going to look at three sandwich chains, each with their own unique positioning and differentiating propositions.
Firehouse Subs emphasizes its roots in the firefighting and first responder community. With over 1200 US locations, they are a small-ish chain, and they continue to put their money where their mouth is, funding a charitable foundation that supports safety workers in their communities. That alone makes them truly different.
Yet they do have a loyalty program, Firehouse Rewards. Subject to reasonable restrictions, customers earn 100 points per dollar spent. We tend to like programs that use points multiples and spending rather than units or visits; such programs are essentially more fair to consumers and allow the marketer flexibility to design targeted point promotions. Their reward chart contains a number of items, from a dessert to a deluxe platter, for point values from 4,000 to 175,000. With a sub combo meal priced at about $15, guests can get a large sub after purchasing ten meals. The perceived 10% return seems fair enough.
Jersey Mike’s tends to rely on their working-class Jersey Shore origins, and invests in such regionally-identified celeb spokespeople as Danny DeVito and Eli Manning. Their Shore Rewards program is also based on points, but points are earned per item rather than per dollar – a structure we think is needlessly complex. Earn a single point for a cookie or chips, two points for a jar of pepper relish, four points for a kid’s meal and six points for a regular sub…and I’m keeping track of this while I try to get the order right for my picky family? In any event, I get a free regular sub after buying twelve – twenty per cent more expensive than Firehouse.
The elephant in the room is Subway, with 20,000 US restaurants. If, as Emerson noted, consistency is the hobgoblin of little minds, no one can accuse Subway of being large-minded.
Just two years ago they introduced MVP Awards, supported by major media and replacing the existing MyWay Rewards. MVP was designed to leverage connections with the sports world, and featured stars like Steph Curry and Patrick Mahomes. The program featured three tiers, continuing with the sports metaphor, labeled Pro, Captain and All-Star. At the time we wrote that multiple tiers seemed a bit too much for a sandwich chain, and the tier names, while making some creative or exec happy with the clever sports tie-in, were confusing.
Well, it took just twenty-seven months for Subway to announce, this week, 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.
This just in: I joined the new Sub Club program two days ago. Yesterday I received a welcome email. Today I received an email inviting me to join. And I’ve also began 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?
We’ve made a good living designing and optimizing loyalty programs; far be it from me to discourage a major brand from investing in newer, better programs on a regular basis. But what we see at Subway isn’t a striving for continual improvement. Rather, it sure looks like floundering without direction, and grasping at straws. Nowadays, I suppose, they aren’t plastic straws, anyway. Your thoughts?