How Subway kept its franchises true to brand

Marketing the brand hasn’t always been easy for Subway.

Because Subway is an entirely franchise-owned brand, up to five years ago, the marketing department was separately owned by the franchises. This was run by an elected board of franchisees called the franchisees advertising fund trust. The franchisees also had development agents which were responsible for growing the brand and the business in each territory. That created issues in consistency.

“That whole structure made it difficult to run anything from a marketing perspective in a single country, let alone on a regional or global perspective,” said Karen Eidsvik, regional director of Asia Subway International B.V.

“In my team, the marketing, operations, research and development (R&D) were all sitting on the same floor, but they were not communicating with each other. As a result our teams were not focused.”

She added that challenges for the brand were many because of this lack in direction and communication.

For example, operational testing in the stores was difficult. She explained the marketing team and the operational team would usually be heading in opposite directions, which would lead to the sandwich artist hearing two different wants and needs from these departments.

“Our product development was also calendar-based which meant that marketing would highlight the ‘limited time offer’ coming up in August to R&D as late as in May,” she said.

“They would then demand for R&D to create something around that period. But we can’t possibly have a new sandwich produced and test the product in three months and then get it ready for the store.”

As a result, product development would also be misaligned. Meanwhile, she added, the data teams were dealing with a lot of feelings, instead of fact-based information. Because most of the owners of the franchises of Subway were not marketing professionals or were not from the target market themselves, there would be conflicts with the marketing teams, resulting in the same issues surfacing over and over.

“We needed to be dealing with numbers and customer insights to know if our products and plans would work. Because we weren’t using consumer insights, R&D was wasting all its time creating new products that weren’t relevant to what customers wanted or needed.”

How did the brand counter this?

Subway started a committee called the “products and promotions” committee that was made up of marketing, R&D, operations, development agents, purchasing and also people from the franchisees’ advertising fund trust board. This allowed the brand to once again be in the centre of all operations.

“This was painful when we first started.”

She added the teams came together to decide what Subway’s main problem areas were.

The committee collectively went through every product and decided whether or not there were enough healthy sandwiches and indulgent sandwiches because simply pushing the health proposition would not attract customers to the restaurant.

“The committee also had to decide on having several core sandwiches because it is ultimately a global brand and consumers have their hot favourites. If we start eroding our core products then we lose our brand.”

Taste, consumer insights, cleaner labels, redundancy and profit impact were some of the main priorities the committee was looking to address.

Next on the agenda was the sharing of its marketing plans. The marketing team briefed the respective teams on who their customer base was and the information it had gathered on their customer profiles. The marketing department also shared its plans in advance during these meetings, allowing the rest of the departments to have a six-month warning to negotiate better pricings with external partners.

Just recently, the brand also hired a marketing director for Asia who overlooked the data and insights gathered by the brand. Eidsvik also added the team was making planning decisions for 2016 as early as mid-2015 rather than in the last quarter as it usually does.

She added that last year the brand also decided not to have any new products in 2015 as this was the year it would go in-depth to understand its products and processes to have fresh ideas for 2016.

Ultimately, armed with consumer insights and a cohesive team, Subway as a brand is able to have a more effective response time when it comes to products in the market and better marketing roll outs. This led to the marketing departments spending funds much more effectively.

“Working together on the products and promotions committee was not rocket science. But the impact on the business was dramatic.”