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Written by Marc Gamble on March 5th, 2009

Quiznos: 3 Days, a Million Free Subs and One Online Success

Lesson on tactical "giveaways" to build marketshare…

Quiznos is in a tight race with Subway to stake a claim on value with a number of subs under $5.  But more strategically, Quiznos wanted to get new customers into its stores to sample a revamped value menu rolled out in January that includes lower prices on 37 different items, including the 20 $5 sandwiches.

Sandwich chain Quiznos achieved massive results with an online promotion offering a downloadable coupon for a free sub. The coupons were available from http://www.millionsubs.com/ starting Feb. 23 and lasting until the millionth sandwich was given away.  As it turned out, reaching that ceiling took less than three days.

In this economy, you can’t go wrong giving away free food. The Denny’s restaurant chain hit an apparent home run with its Super Bowl ad touting a free Grand Slam breakfast on the Tuesday after the big game. Two million customers showed up on Feb. 3 for a meal on the house–which CEO Nelson Marchioli characterized to analysts the next day as “a very encouraging lift in guest traffic,” hopefully including many of the “light and lapsed” customers Denny’s was targeting.

“We caught a tiger by the tail with this one,” says Rebecca Steinfort, CMO of the 5,000 unit chain. “For me personally, [the promotion] went a lot faster than I thought it would. I thought it would take a matter of maybe a month. There was a ton of power in this.”

“Our strategy during the first quarter is simply to drive more traffic,” Steinfort says. “For people who are already Quiznos customers, we want them to realize that we are now more affordable, and they can eat here regularly. Plus we want to bring in new people who’ve never tried a Quiznos sub.”

For all the seriousness of the intent in giving away free sub, the company didn’t do much formally to get the offer out: some PR, some banner advertising on a broad range of Web sites, and “those of us who are on Facebook got on and told our friends about it,” Steinfort says.

“We did do a little value-added TV, but that was a few days into the campaign and quite frankly the genie was out of the bottle by that time,” she says. The company also runs a “Q-Club” loyalty group and could have promoted the offer with an e-mail blast, but that wouldn’t have targeted the first-time customers Quiznos was really trying to reach.

The offer did get some viral spread, both on the www.millionsubs.com microsite and on the Quiznos company profile in Facebook Users could send information about the coupon offer to their friends or volunteer their friends’ e-mail addresses and have Quiznos contact them. Steinfort says about 200,000 visitors who registered and downloaded the coupon also passed information along to at least one friend. It’s too early for more metrics about how many pass-alongs the average visitor, or the average referrer, notched up during the promotion, Steinfort says.

“I think a lot of the passing was just people telling friends informally, whether verbally or in e-mail or talking about it in Twitter,” she says.

With big time-limited online stunts, it’s becoming more and more necessary to make sure that the Web site can withstand the expected traffic spikes. Quiznos was careful to load-test its millionsubs.com site before throwing the doors open.

“We thought a lot about Dr Pepper and making sure we didn’t repeat their case example,” Steinfort says, referring to the customer debacle that occurred when Dr Pepper’s offer of a coupon for a free soda upon the release of the new Guns N’ Roses album was disrupted by a Web site not up to the thousands of visitors it received. “And the site performed very well.”

Things may have gone smoothly for Quiznos on the tech side, but the campaign encountered unanticipated problems of another sort. The Quiznos chain is almost entirely franchised, and complaints began to appear rather quickly on consumer Web sites that customers were having trouble redeeming their free-sub coupons with specific franchisees. Anecdotes were flying about customers who were told that the offer applied only to a limited number of the small-sandwich menu—a stipulation nowhere made on the Web site—or only provided for a $2 discount on the regular sandwich price. Some bloggers reported being told that in order to take advantage of the offer, they had to purchase a drink and chips.

Photos went up on the Web of Quiznos franchises that had posted homemade signs saying the “Coupons are not valid on our ‘everyday value’ subs (they are already promotional items)”, when the printed coupon stated that the offer was applicable to both the everyday value and the signature subs. Other consumers chimed in with stories of operators who went to great lengths to check that the coupons matched the IDs of the presenters.

Some of the commenters pointed out that the problem seemed to be that Quiznos corporate was capping the rate at which it was reimbursing its store operators for coupon redemption.

Steinfort agrees that the corporate reimbursement rate caused some issue early on with the campaign. “It’s not standard industry practice to subsidize coupons at all,” Steinfort says. “But in January we set up a program to do that for our franchisees during the first quarter, because we knew we would be couponing pretty heavily to get people in to see the new menu board and new pricing. We set up a program that would reimburse each store for 400 of any kind of coupons that would come in, including these free sub coupons.”

But once the “Million Subs” promotion showed signs of being such a runaway success, Steinfort says, the company moved quickly to revise its subsidy policies. Reports from the Web say the first move was to raise the cap to 700 reimbursed coupons per store; according to Steinfort, the company ultimately wound up removing the cap entirely on paying store operators back for the sandwiches they gave away.

One problem with capping the reimbursement rate, she points out, was that redemption rates varied greatly among stores, so that outlets near college campuses, for example, saw far more than the average number of free-sub coupons presented.

Still, those redemption issues have now got Quiznos involved in what’s becoming another standard part of online promotions these days: repairing customer relations in order to defuse the bad word of mouth that even a small contingent of frustrated consumers can create.

“We’re committed to satisfying every customer out there, even if they didn’t get to redeem their coupon,” Steinfort says. “We’re urging people to e-mail us at MillionSubs@Quiznos.com, and we will definitely try to make things right with every customer out there. In the full marketing operational life cycle, you have to handle these issues.”

Author: Brian Quinton Contributor to the Big Fat Marketing Blog on March 4th, 2009

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Tags: coupons, giveaways, online marketing, quiznos

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