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What’s next for Subway?

jared fogle subway

Despite a fall in consumer perception after its longtime spokesman pled guilty to charges of child pornography and sex with minors, Subway’s public-relations nightmare of the past summer is somewhat of a “double-edged sword,” giving the chain an unprecedented chance to reinvent itself, says Brad Hecht, vice president and chief research officer at consulting firm Reputation Institute.  

Subway’s reputation decline during the first half of 2015 was notable “by any definition,” Hecht says, adding that a slip of five points in one year would be considered “significant,” while Subway’s fell more than six points in just six months (dropping from a score of 75.4 to 69.3, as measured by Reputation Institute).

Still, the Jared Fogle crisis was more of an “accelerator than an independent problem,” he says, noting that the largest chain in the industry had image issues long before Fogle became the subject of a federal investigation

Over the last decade, Subway placed “too many eggs” in too few baskets, Hecht says, putting inordinate focus on just two pillars of branding: health, as epitomized by a single spokesperson, and affordability.

While the chain got considerable mileage out of its health- and price-centered campaigns, being considered in many ways the “granddaddy of healthy eating,” it never transitioned from those two branding pillars, he says—even as the economy recovered and the siren song of $5 footlongs fell quiet for consumers who amassed more change in their pockets.

Adding fuel to the fire, restaurant reputations shifted away from being product oriented, creating the need for restaurant chains to not only produce quality food but to espouse attributes that make consumers feel good about eating that food. 

“A healthy-eating strategy is not enough,” Hecht says, adding that modern companies must also consider their environmental, social, cultural and citizenship impact, among other factors. “Subway never embraced that.”

By failing to establish a narrative about what separated Subway from the pack prior to the Fogle scandal, the chain opened itself up to greater damage than it may have suffered otherwise. Or, as Hecht puts it: “Its reputation was at risk already.” 

Still, he emphasizes that even “significant” reputational damage is not irreparable, giving the chain a chance to forge a new identity in a post-Jared world.

Overcoming a drop in consumer perception doesn’t come easily and it doesn’t happen overnight, Hecht says. Instead, it requires laser focus on what he calls the key drivers of reputation—elements such as perceived product quality, innovation, work environment, financial performance and governance.

Take Target, for example, which was able to recover its public reputation after suffering a data breach in 2013 and subsequently denying responsibility, he says; however, it took the company a year and a half to do so, and “(it) started with a much stronger reputation than Subway.”

In Subway’s case, that rebuilding effort could even come in the form of taking some responsibility around the issue at the heart of the Fogle case, making it more visible, he says. “It has everything to do with articulating something that will re-establish the emotional connection (with customers),” aside from food.

Hecht referenced Subway’s recent commitment to sustainability as being a step in the right direction, although perhaps a belated one.

“The crisis itself is horrible,” he says, “but it gives them an opportunity to do a restart.” 

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