The most successful loyalty programs make customers feel like they’re getting an amazing deal and encourage more visits, more often, but at least one Subway franchisee is wondering if corporate is going too far.
Subway announced it had revived the Sub Club, a loyalty program that last saw action two decades ago. The new iteration rewards diners after just three foot-long or six 6-inch sub purchases, and also awards points toward future orders. Club members also get exclusive offers as well as fan favorites like birthday cookies.
Those who receive their first reward by Dec. 10 also are eligible to win $10,000 or a Subway oven like those found in their stores.
Maurice Sanders, CEO of hospitality platform Seamlessly, told The Food Institute loyalty programs that have the most impact are those that provide an experience or give the user the feeling they’re getting an amazing deal.
“A perfect example would be the Sky Zone membership I have for my 9-year-old. It’s an annual pass that allows him to jump (it’s a trampoline park) every day of the year for $99, as opposed to paying $27.99 for a one-jump pass,” Sanders said.
“As a single dad, every penny counts. And when I can combine that with a great experience for my son, it’s a no-brainer. I tell all parents how great this deal is. So, I’m a walking billboard, as well.”
Research shows 62% of consumers say they’re 50% to 100% more likely to patronize a restaurant within one week of receiving a promotional offer.
“That means if a brand has a buy three, get one free offer, two-thirds of people who buy three of the featured items are likely to be back for a free fourth within a week to claim the offer,” said Shannon Chirone, senior VP for marketing at the firm behind the aforementioned data point, HungerRush.
Nonetheless, Subway franchisees are less than thrilled, Restaurant Business reported.
“Buy 3, get 1 free is financial suicide,” one franchisee wrote on the Subway internal website.
And that’s the rub. Joe Yetter, general manager of PAR Engagement Cloud at PAR Technology, told FI loyalty programs have to work for franchisees, as well as the company.
“If Subway can demonstrate to franchisees that Sub Club members are visiting more frequently and spending more per transaction than nonmembers, the program pays for itself through incremental revenue,” Yetter said.
“The brands winning right now are integrating loyalty into their broader digital engagement and marketing strategy to drive ROI,” Yetter said.
Subway, which has 37,000 restaurants worldwide, said it would reimburse franchisees for the first 200 free subs given away during the rollout, Restaurant Business reported.
Food for Thought Leadership
In this episode of Food for Thought Leadership, Food Institute VP of content and client relationships Chris Campbell sits down with Barry Thomas, senior thought leader at Kantar, to unpack the rapid rise of agentic AI — a new class of AI systems that don’t just generate information but take action on behalf of the user.
