Case Study: Subway’s Coupon Solution

Subway

Subway is an extremely popular quick-service restaurant, with more locations worldwide than any other chain. It is widely known for its selection of healthy sandwiches and fresh ingredients. Subway offers an expansive menu with a large variety of breads, vegetables, meats and cheeses, allowing customers to have their sandwiches created right in front of them, customized to their order.

Challenges

As the largest restaurant chain in the world, Subway restaurants have a lot going for them. But they are always looking for new ways to stay on top.

“We are clearly a very established consumer brand, but we still have to compete for every visit from our customers,” said franchisee Rudi Sinykin. “Getting just one more visit per month from our guests would make a world of difference to us. It is also important that our existing customers know about and try our great new offerings like breakfast,” he explained.

With that in mind, Rudi and brother Aaron Sinykin, who together own 12 Subway restaurants in Subway’s Phoenix market, went into Subway’s annual franchisee convention looking for new solutions to keep their stores ahead of the curve.

At the convention, a presentation on SmartReceipt caught the Sinykins’ eye. It was presented Raghu Marwaha, Subway’s former Development Agent of the Year.

Solution

Rudi and Aaron had previously employed a number of other traditional marketing tactics, such as bag stuffers and pre-printed coupons on register tape, but they failed to produce consistent results.

In contrast, SmartReceipt’s web-managed marketing solution would allow them to deliver eye-catching coupons and promotions specifically tailored to each customer’s unique behavioral traits, like items purchased, time of purchase, or day of the week. SmartReceipt’s dynamic coupons auto-populate short, fluid expiration dates (based on print date) to incent frequency and reward loyalty. SmartReceipt is a software-only solution, so no new equipment or special receipt paper was required.

Rudi was eager to implement the SmartReceipt system, saying, “The receipt space is prime real estate that is being forgotten about. It’s an easy way to target customers and get them to come back more frequently.”

Rudi and Aaron began implementing the SmartReceipt Marketing Pro solution in their stores in September of 2010. Implementation of the system was smooth, taking less than 30 minutes per store for the installation.

Results

The Sinykins’ Dynamic Coupons have generated a 3–7% redemption rate (depending on the offer), with average expiration periods of just five days — results that are double and triple the rates of traditional couponing in less than a tenth of the time frame.

Though the Sinykins’ primary goal was to build frequency by using dynamic coupons with short 3–7 day expiration dates, they also use SmartReceipt to cross-pollinate dayparts and promote specific products. Rudi and Aaron have SmartReceipt set up to seamlessly promote their new breakfast offerings to lunch and dinner guests while promoting their special “Dinner Time Deals” to breakfast and lunch guests. The brothers also promote seasonal products with dynamic coupons, for instance encouraging customers to try adding soup to their meals during winter months with offers like “Any soup for $1 with purchase of a sub."”

“The system is easy to use, even for people without much of a computer background,” Rudi noted.

Rudi, Aaron and their store managers report seeing a clear increase in guest frequency and say that customers love receiving their SmartReceipt every time they visit. Their breakfast daypart has grown significantly since starting SmartReceipt and has become one of the strongest in Phoenix. To top it off, the Sinykins’ sales have increased by more than 5% in 2010 (double Subway’s average) and they are now amongst the highest grossing Subway franchises in their market.

Less than six months after testing the system, they had launched SmartReceipt at all 12 of their Phoenix-area Subway locations. Rudi and Aaron are also looking forward to implementing SmartReceipt’s Nutricate program later this year, which will provide their customers with detailed nutritional information customized for their order. Because of Subway’s reputation as a restaurant for health-conscious consumers, Rudi and Aaron anticipate that Nutricate will further delight their customers and improve sales.

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