Subway’s Big Marketing Problem (And It Ain’t Just Jared)

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Picture the scene around the boardroom table in Subway’s publicity office.

Ashen faces trying to comprehend how to deal with the public takedown of their poster boy.

Furrowed brows desperately trying to work out how to extract the brand’s image from this public relations black hole.

When Jared’s home was raided by police two months ago after the head of his charity was arrested on charges of the most unthinkable kind involving kids and cameras, it was a disaster for the food chain.

How could someone they’ve built up as the ‘face’ of their business turn toxic overnight?

But, incredibly, this current hoo-haa with Jared takes the attention away from a bigger issue.

Subway actually have much bigger problems.

“Really?! Bigger problems than a short-eyes Jarod scandal!” you cry.


You see, Subway is struggling and has been for a while.

A recent report by Bloomberg Business highlighted the problems Subway are going through. US sales for the chain in 2014 dropped 3.3 percent on the previous year, the biggest drop amongst all the major fast food chains (Source: Technomic).

The report also offers anecdotal testimony from disgruntled Subway franchisees (21,000 franchises run the 44,000 stores globally) who feel the company has lost its way in the market.

Before we continue, I must to admit that I love eating at Subway.

For me it’s the perfect combination of fast food and eating healthy, or at least healthier.

(As a vegetarian, I appreciate the fact the staff change their gloves when handling veggie orders.)

But even I admit it’s a brand that hasn’t moved since I’ve been using them.

On my last trip to the US, this was put in stark contrast. I headed out of my hotel to find a nearby Subway.

The one I discovered was functional rather than welcoming with that horrible sterile light and while the staff were lovely, it felt tired. I was the only person in there.

As I walked back to my hotel, I passed both a Chipotle and Panera, both competitors to Subway’s market and both vastly different.

From a cursory glance, you could see they were attracting exactly the kind of crowds Subway needs to continue attracting to guarantee its position.

With this in mind, here’s my take on the areas where Subway has gone wrong from a marketing perspective.

(It wasn’t taking the plastic out of the bread by the way… I actually thought it tasted better BEFORE.)

Placing all your chips on one person, image or idea

Subway has forever positioned itself on being ”fresh”.

In fact, Subway’s positioning is founded on being the healthy alternative to other fast food chains.

In itself this was unique positioning, but when Jared stormed into Subway’s life in 1998, another opportunity presented itself.

As Eugene Schwartz frames this phenomenon in Breakthrough Advertising, “a brand new market is created… dealing with an already-established product”.

In his example, the new market is created through the insight of the advertising man (or woman) visualizing the application of a product to a new market.

In Subway’s case, they didn’t need a marketer to develop the new application. One of their customers did and they smartly pinned their colors to his weight loss success.

Losing a cool 245 lbs in a year on a diet of turkey subs and diet soda was a story that was just too good to be ignored by the mainstream press.

Jared and his fat pants provide arguably the most famous “Before and After” comparison on the planet.

He’s a walking testimonial.

Heck, he’s called The Subway Guy!

It allowed Subway to inhabit an otherwise uninhabited corner of the fast food market.

Or rather allowed them to create a new market altogether – “healthy” fast food.

This was against smartly followed up by sponsorship partnerships with weight loss brands such as The Biggest Loser.

It became commonplace to associate Olympics stars with Jared and they even picked their favorite subs.

That positioning is as good as dead.

Regardless of whether Jared is cleared of all charges, Subway won’t be renewing that relationship.

The whiff of an association with something as heinous as abusing children is enough to kill a brand overnight.

But even before the allegations and search warrant, Subway understood the need to move away from the weight loss angle.

In light of competition from other brands (below), it was becoming tired and less credible.

People were trying the “Subway diet” and finding that perhaps it wasn’t quite the healthy regime it had been made out to be. Their wallets were the only thing losing weight, while fattening Subway’s profits.

A campaign was in the process of positioning Jared as a family man.

Oh, such cruel irony.

This is what happens when you pin your brand to an individual.

Putting all your chips on a single personality has both built the Subway brand…

… and may be its undoing.

Losing ground on positioning

Coming back to Schwartz’s Breakthrough Advertising, he discusses understanding marketing sophistication as an indicator of how your product sits within your market.

Schwartz posits five stages of sophistication from being first in the market when you can state your offer simply through the final stage of market sophistication when the market simply doesn’t want your product. (Not yours specifically, but the idea).

The healthy fast food market is arguably in the fourth stage.

Fresh and healthy are taken as standard by the consumers within the market. The mechanism for delivering the product has taken precedence.

And only the businesses that understand this are on the rise.

Let’s look at some of Subway’s key competitors.

Chipotle Mexican Grill is one of Subway’s main threats but it’s positioning couldn’t be more different.

It’s Big Idea is “food with integrity” and if there’s one trend affecting ALL fast food restaurants it’s understanding the provenance of what you’re eating.

Quite simply, Chipotle has stolen a march on the likes of Subway.

Its message oozes with authenticity, wholesomeness and sustainability.

Just look at its Youtube output. It’s filled with stories about its farmers. It tells stories of the MLS stars it sponsors.

It tells stories. It brings you on side against the ‘villainous’ food companies.

And it just happens to put out some goddamn fine food.

Watch their beautiful Scarecrow ad and by the end you’ll be donning a beret, shouting “Viva La Revolucion!” and itching to storm your nearest McDonalds:

And you know you’re in the ascendancy when future Presidential candidates need to be seen in your stores to appeal to the Millenial crowd

Another company snapping at Subway’s heels is Panera.

But let’s just put this in perspective.

Ultimately, Panera is a bread company. They make bread.

Bread has long been touted as BAD amongst the health crowd.

How can a company that makes bread be on the rise?

It epitomises the “fast casual” trend designed for exactly the same kind of audience Subway served.

And it wears its approach to transparency and clean ingredients on its sleeve.

It has something called a Clean Food Policy.

Sure, Subway may already be serving clean food…

… but remember Claude Hopkins’ Schlitz Beer ad, where he described the brewing process for the first time.

EVERY brewery was using that process, but by focusing on the mechanism they cleaned up.

It’s proactive. Its focus on “Live Consciously, Eat Deliciously” understands the underlying trends in a generation of Americans and championing social causes.

And if you want to see a great example of a 60 Second Hook in action, just listen to CEO Ron Shaich’s story:

Authenticity pours from his story.

He reveals how he had to battle with investors when he wanted to bring clean food to the menu.

In comparison, it looks as if Subway still has its head in the sand.

It’s lost the ability to connect to it audience.

While Chipotle and Panera are winning the hearts and minds of consumers, Subway is flailing.

In an era of conscious consumerism, customers have been turning to businesses which align with their (perceived) values.

It makes Subway’s begrudging move to take out the plastic from its bread appear too little, too late.

They’re like that ageing grandpa of yours who doesn’t understand why he’s not allowed to tell all his old jokes because they’re apparently “racist” and “misogynist”.

Subway doesn’t appear to understand what it needs to do.

Or at least its marketing approach doesn’t reflect that. In the meantime, I just goes on doing what it’s always done and looking increasingly irrelevant.

Ask yourself this:

When was the last time YOU went into a Subway store?

Actually, it doesn’t matter how long ago it was.

Chances are, it looked exactly the same as it looks now.

It operates the same, it feels the same and most of the options will be the same.

In fast food terms, that would usually be a huge tick in favor of good systems and consistency.

But in Subway’s case, it represents a lack of movement – except in one area.

And the bad news is, it’s probably be the wrong area to focus on…

Focusing on the wrong kind of change

One area we’ve not discussed is price.

Subway has been hugely successful in appealing to low-value buyers through its price innovation.

The positioning is on “fresh” and “healthy”, but its ability to knock out a meal deal for a few dollars and a $5 foot-long has delivered much of its growth in market share.

There were even rumors of rival fast food chains setting up kitchens to try and reverse engineer their ingredient pricing to discover how Subway did it and still made a profit.

The problem with operating at this end of the market is there’s nowhere else to go.

Once you’ve become synonymous with price innovation, your market expects that from you.

Which makes Subway’s movement into more gourmet options perplexing.

Mike Michalowicz sums this the error of changing your “area of innovation” in The Toilet Paper Entrepreneur:

Wal-Mart has grown explosively because it is all about the lowest Price first; everything else, including Quality and Convenience, comes second. Even the mighty Wal-Mart could fail if the company loses focus and compromises Price in an effort to improve another area of innovation.

When Wal-mart tried to do just that in launching a ‘convenient’ movie rental service to rival Blockbuster and Netflix without a major price advantage, it failed miserably. The failure was caused by taking their focus off price.

It appears that’s what Subway is now looking to do with its new menu.

Focusing on bringing in higher quality ingredients and charging MORE.

You can’t get a $5 footlong any more. But there are other subs chains, like Firehouse Subs and Jimmy Johns, offering more for as much or even less.

Now they’re losing ground to competitor sub chains in terms of price, where do they go?

It’s simple, they say.

Just add guacamole to your menu.

Their latest ads teach you how to say guacamole.

“Hey, it’s fun to say…”


Here’s the problem.

If you need to start educating your audience on how to order food, you’ve lost.

If you need to start educating your audience on what the food is you’re serving, you’ve lost.

As soon as you start educating, you’ve lost.

Your offer needs to be as simple and straightforward as possible.

Subway is still the dominant market player.

It still has clout and the opportunity to change.

Where it has gone wrong is by not identifying the market it is in anymore, not recognising the sophistication of the market or staying in alignment with the prevailing trends amongst its target audience.



Jody Raynsford is a freelance copywriter and author of The Engagement Formula, showing you how to grab your audience’s attention, instantly build trust and transform them into lifetime customers. Download a free copy of the book here

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Jody Raynsford
Jody Raynsford
Jody Raynsford is a direct response copywriter and author of The Engagement Formula written to help business owners and entrepreneurs tell compelling stories to capture their prospect’s attention and transform them into buyers. Download a copy of The Engagement Formula free for a limited time here:
Showing 10 comments
  • Reply

    Excellent piece, Jody. I agree with you that making someone else the face of your company is not the best move in the long-term. Because, well let’s face it, humans screw up and their faux pas may prove to be the bane of your company’s existence. (Or may cause your company to cease to exist altogether.)

    One major lesson that Subway, and all brands both big and small, should learn is to make their CUSTOMERS the hero instead of seeking an external source to fill that void (a.k.a Jared). When you know your audience inside and out and can create a unique angle based around their needs and wants, you’re way ahead of the game.

    I’m a brand copywriter, and I see far too many companies that have this concept in reverse. As much as I fear that terms like “authentic” are on a fast track to “Buzzwordville,” I believe it’s really about showing (not just telling) your customers that you are real instead of trying your damnedest to be a rock star.

    P.S. – That Chipolte video was quite the tearjerker. The cow scene choked me up a little bit. Great example!

    • Reply

      Hey Taheerah,

      Thank you so much for your comment. I certainly wouldn’t want a single individual to represent my company who I ultimately have no control over (it’s difficult enough when I’m the face of it!).

      You’re spot on about customers and any business who wants to develop good marketing which connects to their audience should heed that.

      I know what you mean about using “authentic”. I think I use it to much. It’s still better than saying “keeping it real”, though. Which should never be uttered by a 36-year old male.


  • Reply

    After being a fan of Subway for many years, I have to agree with you Subway needs to re-invent themselves. The city I live in over the last few years has seen a major surge of food outlets giving us the consumer more choice and being healthy may not be enough.

    • Reply

      Thanks for your comment, Mike.

      I didn’t realise how tired Subway had become until I started making the comparison with other chains. We don’t have Chipotle or Panera or any of the other subs chains in the UK, so it’s less obvious – Subway is still the dominant subs chain as it were. And I think because of this, growth outside the US is going to be a key focus for the business where they are under less pressure than in the US.

      I like consistency. I like the fact they’re the same. In France, where vegetarians are detested, being able to go into a Subway and order what I want is wonderful.

      But their marketing always focuses on the same points: it being fresh and the fact you can choose. Really?! Being able to choose is a key value proposition still? C’mon Subway, the market has moved on. Time to start thinking about what else you offer.


  • Reply

    Wow! Brilliantly written.

    My wife and I rarely eat bread, so Subway is only on our cheat-day list of places to “dine” out. I have noticed that there has not been the line in front of us lately–thanks for explaining why.

    I have also noticed an attitude change in some of the stores. One Subway in Boise, Idaho pissed me off so bad I recommended that the fellow who was putting mine together stuff it somewhere other than in the little bag, then turned and walked out without it. There is one Subway near us that is actually 6 miles further than the nearest. We drive past the near one to the far one when we choose to eat a sub because the employees are always nice. I can forgive them the bad fortune of having their poster-boy turn out to be an asshole, but I will not tolerate being served by one.

    Now, having completed this part of my comment, my next activity will be to search for the nearest Chipotle and Panera restaurants. You have totally sold me on checking them out.

    Again, NICE WRITING! Very compelling.

    • Reply

      “I can forgive them the bad fortune of having their poster-boy turn out to be an asshole, but I will not tolerate being served by one.” Comment of the day, right there, Bruce!

    • Reply

      Thanks Bruce for you kind words.

      There hasn’t been a line in front of me in a Subway for years.

      I’ve been pretty lucky with Subways. The only problem I’ve ever had is with the franchise at London Victoria railway station when they took my order and then told me they had run out of all salad. Considering my option was a Veggie Delite of which salad is the primary (only) ingredient, it was quite an outlay for some mildly toasted bread.

      Burrito chains have started popping up a lot in the UK, all with very imaginative names such as “Mi Casa Burrito” and “Burrito”. I prefer eating at these now as they hit the “fresh” and “your choice” elements that I liked about Subway.

      They really need to adapt to the changing marketplace.


  • Reply

    Well written, Jody. Reading a direct response copywriter talk about big consumer brands is way fresher than what Subway is serving up these days…

    Some great lessons here…and while you had me for the today at “Subway’s big marketing problem…” once you mentioned Schwartz, you had me for life!

    The “bread thing” is a big issue in these food wars…interesting how Panera dealt with it head on as you outline here. Great lessons.

    • Reply

      Brian, thank you so much for your kind comments.

      It’s funny how you’re reading something and then a story pops up that provides a perfect example to the lesson you’ve learned. This is precisely what happened as I was reading Breakthrough Advertising.

      You can see exactly WHY Subway is having the problems it’s having, purely because of its misjudgment of how sophisticated the market has become.

      The bread thing is incredible. In health food terms, you’d think a bakery would be toast (sorry!). But Panera’s masterful positioning overrides this. Just brilliant.

      Thanks, again.


  • samluke

    Subway corporate is the financial predator for it’s franchisee, subway will hide this very important fact,, I would say it’s the 21st century slavery. Subway will exploit you and squeeze you till they can get a single dollar from you and throw you in the trash at the end. They have made the lease and other compliance rules so that the franchisee can never be in compliance and it’s a win-win situation for the subway and can throw you out anytime. It has come so far by exploiting so many poor franchisee and advocates itself as a healthy option and environmental friendly, it’s all crap. It’s going towards quiznos path. There are so many subway stores are on sales with 1/3 of the original price and yet no one is buying them. The best way to fight with subway is by not renewing the lease contract when time comes because these days once a store is closed, it’s never going to come back so subway can’t keep collecting it’s royalties by exploiting us. DO NOT own subway franchisee.

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