PDA

View Full Version : $5 foot long marketing campaign


Steve
11-07-2009, 11:32 AM
I am sure you have seen the Subway $5 foot long marketing campaign but you might not know how it all came together.

Check this article out on how one business owner experimented with a way to increase sales at his store. It worked so well that the concept spread to other stores and then ultimately to corporate headquarters.

http://www.msnbc.msn.com/id/33724962/ns/business-businessweekcom/

This really shows the power of experimenting. No one person is ever going to have all the answers to your business or marketing issues but when you can get a group of people experimenting, you can come up with some amazing concepts.

StartALawnCareBusiness
11-07-2009, 12:39 PM
Steve:

That's an interesting article.

Earlier this year my favorite fast food joint (Chik-fil-a) raised the price of their #1 combo meal to $5.89 including tax. Soon after, I discovered the $5 value meal at Subway. Local shops offer 6" subs, chips, and a coke, for $5.00.

With meatball subs, roasted chicken breasts, and cold-cut combos, Subway offers much better value. I'm SOLD. I'm a big fan of Subway.

I often sit at Subway and wonder how they can make money with this promotion. It's wonderful how economies-of-scale dramatically affected their profit margin.

On these message boards, we often see LCO advertisements offering "all yards $15" (or similar promotions). How do you think these promotions correlate with the success of Subway's cut-rate prices?

Keith

Steve
11-07-2009, 01:19 PM
On these message boards, we often see LCO advertisements offering "all yards $15" (or similar promotions). How do you think these promotions correlate with the success of Subway's cut-rate prices?

As we see in the article, the Subway owner had the store sitting there and not making enough on the weekends. He had the ability to produce X amount of sandwiches per hour and I don't think he was anywhere near that amount, so by dropping the price a bit, he was able to improve the number of sales of sandwiches.

He was also talking about how it wasn't a loss leader. There was no specific amount of time this offer would be available until it would be withdrawn, so he was making a profit on each sandwich.

With lawn care, I think what happens way to often is that business owners don't take into consideration their overhead. They feel that what ever money they get paid, they are profiting. That just isn't the case. Mowing a lawn for $15 may cost you $20 to do. You may not realize this for months later when you notice you are really tired and have no money in the bank.

SuperiorPower
11-07-2009, 01:37 PM
Though it may not be a loss leader, I find that it draws me into their store and many times I will end up buying a $6 or $7 sub instead. I REALLY love their sweet onion chicken teriyaki sandwich... my mouth is watering even now....

StartALawnCareBusiness
11-07-2009, 02:38 PM
I REALLY love their sweet onion chicken teriyaki sandwich... my mouth is watering even now....

Thanks for the tip. I'll give get that sandwich next time I'm in subway.



business owners don't take into consideration their overhead.

My dealings with many new lawn care business owners show they do not understand job costing and estimating. LCOs that price their jobs based, solely, on their competitions' pricing quickly find themselves out of business.

An understanding of costs takes business owners a huge step forward with their businesses. Subway owners that sells 500 sandwiches per day know how much it costs them for every slice of tomato that goes on a sandwich. LCOs who perform a couple jobs each day probably don't understand their true costs until, as you said, months later when their equipment dies, their bodies are tired, and they have no money in the bank.

True understanding of job cost along with appropriate job pricing is a key to success for any lawn care business owner.

Keith
http://www.StartALawnCareBusiness.com

Steve
11-07-2009, 05:09 PM
When you get to the point of owning multiple Subway shops, you hopefully are aware of your costs because you are dealing with money issues on a larger scale and you probably have more business training than you do as a start up lawn care business. Because of this, you can better experiment with your business because you know your costs.

Getting started doing any business is rough because there is so much to learn. It's a new language, it's a new world.

I like to talk about these topics cause it makes us all think.