Subway Loyalty Revamp: Earn Points or Lose Them

By Leah Baptiste

3 mins


Subway Loyalty Revamp: Earn Points or Lose Them

By Leah Baptiste

3 mins


Over the last year, much has been written about the power of loyalty programmes to attract and retain customers, as well as defend and grow the share of wallet. Particularly in the wake of a cost of living crisis, loyalty rewards and benefits are becoming all the more attractive to cost-conscious consumers, with 36% using loyalty schemes more this year. 

 

But it’s not all about cost-savings. In fact, 58% of consumers rank positive experiences among their top reasons to remain loyal to a particular brand. So for brands, that means thinking about their end to end service offering and value proposition – including loyalty.

 

What Subway does well in the States

 

In the US, Subway has built a successful end-to-end customer loyalty experience via a tiered loyalty scheme. Their scheme gives customers more ways to earn perks as they ascend the tiers from Pro, to Captain, to All-Star status. 

 

Subway understands the importance of tapping into the needs and value drivers of distinct customer segments. The scheme avoids a one-size-fits-all approach to customer loyalty by tailoring the proposition to the preferences of different customer groups. This way, Subway can effectively maintain and deepen their relationships with their customer base. 

 

Meanwhile in the UK…

 

However, Subway’s UK business appeared to be missing a trick. Until recently in the UK, Subway’s ‘MyRewards’ scheme offered a one size fits all earn-and-burn loyalty programme, where all customers could choose items from the menu to redeem their points on. Whilst the program served over 4 million engaged customers, this uniform value proposition failed to differentiate between customer segments. Therefore Subway risked giving away too much value to customers who would spend with them regardless, thus creating inefficiencies.

 

2024: Subway’s next chapter

 

Launched in May 2024, Subway’s revamped UK loyalty program mimics the highly successful US scheme, involving a tiered system with unique rewards and surprise treats. It enables loyalty members to scale up benefits by indulging in their Subway cravings more frequently. 

 

Under this revamp, bigger spenders can earn more points compared to their occasional customers who spend less. This strategic move allows Subway to cater to the distinct needs and value drivers of different customer segments. Importantly, it recognises and rewards the loyalty of their most valuable ‘crown jewel’ customers who return time and again, in the hope to drive up purchase frequency and basket size.

 

The challenges ahead

 

Subway’s loyalty scheme upgrade is great news for a lot of customers. But it’s been a rocky start for the new program, as earlier this year all customers were warned that their historic points would expire before the new launch, leading to a lot of backlash in the media.

 

With 73% of customers likely to switch to a competitor after bad experiences (Zendesk), Subway risked losing these customers to rivals as well as damaging its brand reputation. 

 

They aren’t the only brand to mess around with points and fall out of favour with customers. In 2023 Boots told Advantage Card Holders that their points would expire after a year, when historically they had no expiry date. This did not land well with loyal Advantage Card holders, who took to X to actively voice their grievances about the changes, with one stating:

“If Boots is removing points from customer accounts if not used for 12 months, then I hereby give Boots 12 hours notice that I won’t shop with them again after using current points” (The Sun). A warning to Subway: mess around with your customer’s points at your peril.

 

Overall, we think it’s great that Subway is upgrading their loyalty proposition to better meet customer needs. If they can carefully balance the new changes with effective communication and top-notch customer experience they could be on to a winner. 

 

How Manifesto can help

 

At Manifesto, we are experts in business models that grow customer engagement and value over time, through membership, subscription, loyalty and D2C. We specialise in helping global leaders in Retail, Leisure, Media, CPG and Financial Services pivot their businesses to focus on deepening customer relationships.

 

If you want to learn more about how to win at loyalty, you can read our full report, ‘Beyond Points: The Loyalty Blueprint’, here. The report delves deeper into the key things you need to get right, what happens if you get them wrong, the commercial objectives you should have in front of mind, as well as examples of the brands that are getting it right (and wrong!)


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