Friday, July 09, 2010

A $5 success story

Food for thought... Why isn't every great idea that generates positive change an immediate success? What does it take for others to adopt a new behavior? When we see a successful project or person, do we appreciate the string of failures (or rejection) leading up to it?

In 2004, Stuart Frankel owned two small sandwich shops at a hospital. He came up with an idea to sell his sandwiches for $5 during off hours - $1 below corporate recommended pricing. Sales rose by double digits.

Frankel ceaselessly championed the idea to Subway's corporate leadership amid widespread skepticism and rejection (this wasn't created by corporate leaders…). The franchise board also rejected the idea (Too risky! Labor costs will explode! Profit margins will erode!)

But a few other franchise owners picked up on Frankel's idea and tried it for themselves in locations ranging from Washington to Chicago. The idea yielded positive results. Finally, three years later, the Subway board voted to support the idea.

Subway brought in its ad agency. A national campaign was launched on March 23, 2008. Sales shot up 25% on average. Within weeks, 3,600 videos of people performing the ad's jingle appeared on YouTube. Here's a short sample...

Copycat offers ultimately emerged. Boston Market offers 11 meals for $5. Domino's sells sandwiches for $4.99. KFC has $5 combo meals. T.G.I. Friday's now has $5 sandwiches. It's a $5 value menu explosion.

Meanwhile, back at Subway, the campaign represents $4 billion in additional sales. All this, from a frequently rejected idea created and championed ceaselessly by one man.

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