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SEP 16, 2015

(3-4 minute read by Steve Beshara)



Jared Fogle has had a profound impact on Subway - and I'm not just talking about this past month’s revelations.

Jared has made Subway a lot of money. That's why we even know about this oversized, seemingly common, 38-year-old Indiana resident.

It was 2000 when Jared's story of losing 245 pounds on his singular Subway diet turned him into one of the most visible pitchmen of our times, resulting in lucrative profits for the global brand. He filmed over 300 commercials for Subway. Nation’s Restaurant News noted that sales during the Jared years nearly tripled from about $3 billion in 1998 to $11.5 billion in 2011. That’s massive growth for Subway, now the world’s largest fast food chain with 44,000 locations in 110 countries.

Celebrity endorsements have been a popular marketing strategy for generations. For 15 years, Jared Fogle has been highly visible in our cultural marketplace. Brought to you by the healthy ad spend of the Subway Corporation. Yet, there is a weighty risk that comes with the familiarity of celebrity endorsements. Familiarity can breed favorability, but can also destroy it.

So when Jared pleaded guilty to felony charges last month, the deep association with his longstanding promoter, Subway, leapt to everyone's mind and conscience. The linkage between the pitchman and the brand is locked.

 

The question is: Will Jared's fall bring Subway down too? Or can they unlock the association?

The multi-million dollar Subway campaigns for 15 years can't be distanced or silenced in a day, week, or month. Shoes are still dropping, so it's not over. Although all ties have been severed, it will take time for Jared's association with Subway to wash away. We Americans love to vilify the sinners, and glorify the saints. It's nearly sport in America. Think about our media machines churning. Martha Stewart. Bill Cosby. Paula Deen.

Given that, building brand through singular celebrity endorsements is high risk. Subway is taking it on the chin today, so what’s the plan for tomorrow? What should Subway founder, Fred Deluca, and team do with their iconic, worldwide, all-American brand?

 

To rebrand, or not to rebrand. That is the question.

Having been involved with rebranding for 20 years - from UPS to TurboChef to Greenway - here are some ruminations. (I would also like to say that I typically don't recommend rebranding companies due to the significant ramifications.)

My simple list of observations and recommendations for Subway:

  1. Because pedophilia is a horrible, stomach-turning crime, there will be negative shrapnel transferred from Jared onto Subway.
  2. Time heals all wounds, so the negative impact (on brand favorability and revenues) will be largely temporary. The media will find other sinners.

  3. However, now that Subway is under an unexpected spotlight, the brand is looking old and out of touch.

  4. Subway is operating in a new fast food world where forward-looking brands like Chipotle (food with integrity) are leading with astonishing growth (stock, revenues and margins) rates.

  5. For Subway, the stage is set - for many perceptional and business reasons - to reinvent itself.

  6. A Subway rebranding is a very significant investment. The cost for signage and restaurant and merchandising changes at 44,000 locations is colossal. Not to mention cajoling franchisees to pay for it. Related point: When Timothy McVeigh used a yellow Ryder truck to carry out the Oklahoma City bombing, it was imperative for Ryder to distance themselves from that destructive event. Ryder trucks are now pure white.

  7. It is clear that Subway needs to reinvent, but still rely on its brand greatness and history. "Fresh" is part of their earned lexicon. Start by leveraging that. Repurpose it for 2015-2025 consumers and conversations, not 1995.  

  8. Rebrand on their own schedule and do it right, don't feel the pressure of the "Jared Defect" to do it quickly.

  9. For a successful rebranding, Subway needs to stand for what it believes in. I assume kids' safety, security, and health are among their beliefs; so introduce specific, honest campaigns and actions to strengthen them. Give subs away to every American kid on the first day of school. Engage kids and their parents around meaningful content. Give them something of value with gratitude.

  10. With "fresh" rebranding Subway can actually turn this situation around. I believe the investment would pay big long-term dividends and growth for the brand. If they don't the brand becomes more vulnerable and less vital over time.

What's the cost of that?