Subway’s Michael Lewkowicz on Launching a Mobile Marketing Campaign
Working to leverage the mobile channel to capture more of its customers’ share of wallet, more than 100 Subway restaurants in Buffalo, N.Y. and the Seattle-Tacoma area now offer real-time alerts and coupons to preferred customers via their cell phones. A partnership with Modiv Media— an interactive marketing services firm in Quincy, Mass.—the My Subway Mobile program helps the national sandwich shop chain’s participating stores to drive traffic and sales, as well as to gain insight on specific promotion aspects that appeal to each store and individual customers.
The program works by encouraging customers to sign up at participating locations or by texting a promotional short code to the specified Subway code via their cell phones. Customers are enticed to sign up with an offer for a free six-inch sub with the purchase of a 32-ounce drink.
“We are deploying [the program] to increase customer loyalty through personalized, real-time communications,” says Michael Lewkowicz, chairman of Buffalo SUBWAY Franchisee Advertising Fund Trust and president of QSR Brands, a Subway franchisee in the Buffalo area. “[This] solution gives us an advantage against the competition by utilizing new innovations to rise above the noise created by traditional advertising and marketing.”
In August 2006, Subway launched the program in 12 Buffalo locations. Some stores netted 50 percent coupon redemption rates on the initial run, which is a significant increase over the two to three percent response rates typical of traditional, paper-based coupons and marketing channels, reports Lewkowicz. Here, he discusses how Subway implemented its My Subway Mobile program and details the current results.
Target Marketing: How are you integrating the mobile campaign into your existing marketing mix?
Michael Lewkowicz: With our existing marketing campaigns we are tagging media buys, and created mysubwaymobile.com for people to go in and register to sign up for mobile offers.
TM: What is the opt-in process?
ML: We are targeting existing Subway customers. When customers come into the store, they fill out a form and then we mail the forms to Modiv Media [which] contacts customers with our offer. Or, [customers] can text to receive the offer in the store. In that case, they will get the offer within 24 hours.
TM: Is there a reverification process?
ML: This is a double opt-in program … when people first text in, they will get a [return] text that will say “Do you want to receive offers from Subway?” and [they] have to respond “yes” or “no” first. After [they] do that, [they] will get [another] text message and have to respond “yes” or “no” [again].
TM: How does opt-out work?
ML: Modiv Media follows Mobile Marketing Association regulations. The process is you enter a short code that says stop [sending messages] to a specific number and that is how you are opted out. With each [mobile] message, it [also] says on the bottom [of the ad], “Do you want to opt-out?” The opt-out rate is extremely low for the campaign. The bottom line is people are receiving what they want; our opt-out rate is less than 1 percent. We have collected names over the last several months. The last I checked, 17 people out of several thousand opted out of the program.
TM: What results did you have before implementing the mobile campaign? What results are you seeing now?
ML: When the Seattle campaign started last Sunday, the campaign was organized around the Seahawks home game. The results from the promo on the jumbotron at the football field are still being measured. It was the first memorabilia competition; customers text in and have a chance to win a signed helmet from a quarterback.
Our goal is probably to be 100 percent. It is rare to be 100 percent. We did other campaigns like sending out FSIs or direct mail and we were seeing 1 [percent] or 2 percent redemption rates. We are seeing higher redemption rates with this program and are gathering a database of Subway customers and plan to continue sending out value messages to those customers.
TM: What are your future plans for mobile marketing programs?
ML: We are also thinking of trying to implement the program on a national level. The Seattle market currently includes 350 stores. Knoxville and Philadelphia [stores] also are considering implementing a mobile media campaign.