The Secret Behind How Subway Became One of the Top 10 Fast-Food Brands in the U.S.
This is a remarkable story of how a simple idea transformed Subway into a household name and revolutionized the fast-food industry.
The Beginning of the $5 Footlong
In 2003, Subway franchisee Stuart Frankel noticed a troubling trend: weekend sales were significantly lower than during the week. Determined to find a solution, Frankel introduced a bold promotion—he would sell every footlong sandwich for just $5 on weekends, a price about $1 lower than usual.
The Results Were Staggering
The response was immediate. The $5 promotion led to a 10%+ increase in sales at Frankel’s franchise, proving that small pricing experiments could have a massive impact.
Subway Takes It Nationwide
Seeing the local success, Subway’s advertising team decided to roll out the $5 footlong promotion across the entire country. This simple yet effective pricing strategy became a game-changer:
- The $5 footlong campaign directly contributed to a staggering $3.8 billion in sales nationally.
- Subway’s overall U.S. revenues increased by 17%, cementing the brand as one of the top fast-food chains in the country.
Why Did It Work?
The $5 footlong promotion worked for several reasons:
- Price Psychology
The $5 price point wasn’t arbitrary—it felt affordable and approachable, tapping into consumers’ perception of value. A footlong sandwich, enough to satisfy or share, for just $5 seemed like an unbeatable deal. - Encouraging Social Consumption
A footlong sandwich is substantial, often too much for one person to eat alone. This encouraged customers to:- Invite a friend to share a meal.
- Buy multiple sandwiches to feed their families.
This social aspect of the $5 footlong created a word-of-mouth effect, much like going viral—but without the internet playing a role.
- Broad Appeal
The offer appealed to a wide audience, from budget-conscious college students to families looking for an affordable meal option. It also helped Subway position itself as a better value alternative to competitors like McDonald’s and Burger King.
Key Takeaways From Subway’s $5 Footlong Success
- Innovation at the Ground Level: Sometimes, the best ideas come from franchisees or employees closer to the customer. Stuart Frankel’s experiment became a national phenomenon.
- Value Matters: Customers respond to promotions that offer real value. A well-priced product can create a massive impact on sales.
- Create Shareable Experiences: Products that encourage sharing or social engagement can amplify sales through word-of-mouth.
- Listen and Act Quickly: Subway’s ability to recognize the success of the local promotion and scale it nationally was critical to its success.
The $5 footlong campaign isn’t just a story of marketing genius—it’s a lesson in the power of simplicity, customer value, and scalability. Could your next idea be the one that changes the game?
Source: Inspired by Stuart Frankel’s story.