6 Lessons We Learned from Subway's New Loyalty Program

In September 2023, Subway introduced an ambitious new loyalty program, Subway MVP Rewards. According to Mike Kappitt, Chief Operating and Insights Officer at Subway, the new loyalty program was developed with the guest at the forefront of every decision, taking into account direct feedback from customers and employees.

Subway's diverse client base - including casual diners, travelers, truck drivers, and more - also makes for a fantastic case study. In addition to standalone restaurants, Subway locations are often found in convenience stores and gas stations. In other words, the strategies they've incorporated into their new loyalty program have broader applicability than QSR alone.

Let's dive into the program's innovative features and the lessons it offers to marketers looking to improve their loyalty programs.

Go Big with Sign-up Incentives

Subway's program kicks off with a generous 250-point bonus for new sign-ups, equivalent to about $1. Customers can use it right away, too - an appealing draw considering the next-to-nothing effort required on the customer's part.

But this initial incentive is just the beginning. Subway has done (and may continue to do) special events to incentivize signups. When the program first launched, Subway offered to match points from competitors' programs, up to 5,000 points per consumer. That's $25 worth of Subway credit!

Some companies may hesitate to offer so much free credit to a customer who hasn't even spent a dime. But the strategy attracted nearly 2,000 new members, according to an interview with Kappitt. It's a high-value offer that requires little effort from the customer, making for a loyalty program that customers want to join.

We're not surprised that the strategy works. Based on Mobivity's internal industry data, when customers walk in to redeem their reward, 67% add other full-priced items to their order and 26% make multiple meal purchases. This suggests that people are bringing their friends and family, leading to even larger order sizes.

2. Set Achievable Thresholds

Like many loyalty programs, Subway MVP Rewards has three tiers: Pro, Captain, and All-Star - and the spending threshold between levels is surprisingly low. Reaching the second tier, Captain, requires only $200 spent per year.

For someone who purchases Subway once a week on their lunch break, this is entirely achievable without a change in eating habits.

At first glance, it might seem counterintuitive. The tiered loyalty approach aims to encourage customers to spend money they wouldn't otherwise spend in order to receive additional rewards. Why reward them for something they would do anyway?

Mike Kappit said Subway MVP Rewards was inspired by programs that engage a lifestyle. The customer doesn't have to drastically change their current habits to benefit from the reward, which actually encourages participation. The reward is something seen as achievable and worthwhile - not some far-off dream they'll never achieve. Eating at Subway once a week could easily become twice a week since the customer is rewarded for something they already enjoy.

3. Rethink Birthday and Anniversary Freebies

Birthday and anniversary gifts are a standard of most loyalty programs or personalized marketing campaigns. Everyone benefits - the company builds loyalty with consumers by offering a high-value reward that encourages an unplanned visit, and the consumer gets to enjoy a free or heavily discounted treat.

Subway's unique take? Birthday and anniversary rewards get upgraded at every loyalty tier, adding excitement to an otherwise common feature.

At the starting level, Pro members get a free cookie of their choice. Members at the next level, Captain, get a free 20-oz fountain drink AND the cookie of their choice. At the top level, All-Star, members get a free 6-inch sub.

We like this strategy since it makes every tier feel valuable to the customer while still best rewarding the company's most loyal diners. It also means a common, expected reward suddenly feels fresh and exciting.

4. Include Many Ways to Earn

Subway's MVP Rewards program has a lucrative earnings structure, starting with a standard 5% back for base-tier members and scaling up to 9% for All-Star members. Even the base 5% back is better than most credit cards. To clarify, Subway MVP Rewards is a loyalty program, not a credit card.

Subway also offers several ways to earn an even higher percentage back. Ordering on mobile, for example, adds another 5% back. Captain and All-Star members also get bonus-earning days.

Since these bonuses stack up, customers can receive significant points with a single purchase. Even the starting level Pro members can get 10% back in points just by ordering through the Subway app.

When customers can see a real impact on their point count after each visit, it makes their reward points feel that much more valuable.

5. Personalize When Possible

Subway's new loyalty program excels in many areas, but one thing we noticed while exploring the features and app was a lack of creative personalization.

Subway MVP Rewards features birthday and anniversary rewards, as mentioned previously, and the app lets you "favorite" sandwiches. Beyond these basics, there's a lot of opportunity for expansion.

Kappitt admittedthat Subway was still playing catchup as far as personalization strategies. Other brands, like Starbucks and Chipotle, are leading the game with personalized offers based on customer behavior, purchase preferences, and even the weather. Take a look at some offer personalization examplesto get an idea of just what else is out there.

6. Don't Forget Employee Buy-in

While not specific to the loyalty program itself, one especially interesting part of Kappit's interview with Loyalty360was his focus on employee buy-in.

The success of a loyalty program depends on employee engagement more than some brands may realize. Employees who don't understand the program will struggle to clearly communicate its value to customers. An informed, well-trained team is crucial for program success.

In addition to constructing a loyalty program that was more intuitive to begin with, this means supplying the proper resources, such as videos and training modules. Subway also implemented a "train the trainer" process where employees aren't just trained on the program itself; they're also trained on how to train other employees about it. This helps keep each location knowledgeable about the program despite any turnover.

Get Customers Excited to Hear From You

Overall, we were excited to see Subway's approach to their new MVP Rewards program. Their customer-first approach offers valuable lessons for businesses aiming to increase engagement, attract new audiences, and build a loyal customer base.

It aligns perfectly with the strategic approach at Mobivity: offering customers a high-value reward they're truly excited to receive in order to drive superior (and budget-friendly) marketing results. The brand's marketing strategy builds positive anticipation with incentives that consumers welcome rather than something that feels disruptive and irrelevant to their lifestyle.

Looking to supercharge your own loyalty program? Mobivity's Connected Rewardscan help your brand reach new audiences and enhance engagement of your existing customer base using a similar strategy - offering a high-value reward that caters to the audience's lifestyle. Connect with a brand strategistto see how it works!

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