Everybody can make a sandwich – The question is just how you do it!

The Subway brand, with its innovative service approach, crafty pricing strategy and delicious meals, has in the last years grown massively; not only in reputation but the chain has also surpassed McDonald’s in having more restaurants worldwide. The chain works with the discipline of operational excellence and has a creative and extraordinary business idea that just amazes me and has really changed my perception of the fast food industry. There are so many fast food chains out there today that are incredible in the way they do business; being innovative seeking to get their customers to buy more and more from them; but Subway, according to many, takes the standard of the fast food industry to other levels and is in a class of its own.

If you think about it, the Subway sandwiches and menu’s are not particularly cheap, and the restaurants does not provide an upscale, chic environment that could please a huge crowd like many of the other popular fast food chains. Yet they always somehow provide a sense of personalisation, belonging and a feeling that they listen and indeed, actually care about what you have to say; all this while being very productive with handling customer requests at the same time.

Building Relationships and Gaining Customer Loyalty

Subway identify and recognise their customers in many ways, both through their loyalty card program at each Point of Sale (POS), through the social media feedback, but also through their extensive CRM software program which tracks every intervention between the customer and Subway gathered through the different “customer touch points” such as online, phone or in store feedback. By identifying their customers, it helps Subway to enhance the internal service quality, monitor sales and predict the purchasing behavior. To be able to gain the most out of the created relationship data it is crucial that the information is up to date and correct. Subway manages this well through extensive employee training in, not only how to make sandwiches, but also through thoroughly going through the software and sales process. By keeping their information up to date, the customers actually benefit from it by getting direct discounts and special offers at each POS or online contact and the customers themselves actually see the advantage in giving Subway their information. Subway also manages their social media websites in a great way too with many fun events and promotional offers; and somehow, their customers seem to actually want to give them relevant feedback.

The loyalty card program and the software by Microsoft Dynamics helps Subway to value their different customers differently and they do so by offering them instant loyalty awards and price reductions in accordance to their historical, actual and future potential value. It has also helped Subway be able to tailor communications according to different customer needs which builds trust by showing that they are credible, reliable and true to their loyal customers. With their extensive training in how to handle the software, the Subway management can easily use different models to calculate and differentiate their customers according to their specific value. To predict their customers’ behavior they are to have a look at their recent activity, how frequently they buy something from Subway and what price they usually pay. All this puts them into value categories and makes them more easily for Subway to predict and handle.

With all the information that they record, Subway has been able to anticipate and act to customer changes and they have constantly and efficiently improved over the years. The interaction feedback that they receive through their statistics and through the social media has also been very helpful. Subway takes all this information into account when they customize and make new promotions and offers. Subway has earned a lot of awards due to their innovativeness, loyalty programs and CRM management systems with the help of the IPC.

Something that Subway should think about to further develop their customer relationship management system worldwide is to implement the stored-value cash SubCard in all the countries where they operate instead of the current “collect stamp” cards that they have in many European countries still. This will at first bring high costs to the Subway franchisees but in the end it will gain them tremendously since it would enable Subway to facilitate the customer information flow, reduce fake stamps and learn more about how much money these customers spend in comparison to the already recorded customers as well as how frequently they visit the restaurants and implement changes accordingly. All this would help Subway to really embrace the CRM strategy in all their branches and be able to really control their costs, improve their customer interaction by customization and personalisation and finally grow stronger globally in a less stagnated market.

Photo by hsuanwei 
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Posted on April 25, 2012, in Analysis, BizDev, Champions & Spoilers, CRM, Management, Marketing, Strategy and tagged , , , , . Bookmark the permalink. 2 Comments.

  1. Yeah, good writing. But the point is one, do the competitors(e.g. McDonald) adopt the same strategies as Subway’s ? why? and two, I believe Subway gets enough resources and money to undate their “cards system” currently used in European countries. There must be some other reasons for them not to do it right now.

  2. Hi there, just became alert to your blog through Google, and
    found that it’s really informative. I am going to watch out for brussels. I will be grateful if you continue this in future. Lots of people will be benefited from your writing. Cheers!

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