Marketing consultant Dick Meyer explains the magic behind his Subway growth strategies.
By Pam Whitfield
For eight years, marketing consultant Dick Meyer has directed Subway’s expansion into the convenience store/travel center venue—to the tune of one-half billion dollars in sales each year. According to Subway co-founder Fred DeLuca, the number of Subway franchises in convenience store settings has grown from fifty to more than two thousand, thanks largely to Meyer’s winning strategies.
Meyer and Associates, of Neenah, Wisconsin, operates on what president/owner Dick Meyer calls the Ross Perot theory: People are intelligent and can make a sound decision if properly informed. Meyer likens the concept to Perot’s infomercial approach: "If you give people all the information and you have enough confidence in what you’re offering, they’ll usually come to the conclusion that you want them to."
Meyer’s consulting firm stresses promoting the general concept and benefits of the service or product first, not the company’s offering. "That’s one reason why Subway has been so successful in this particular niche market," he says. "They embraced the idea of educating the convenience-store environment on why branded fast food makes sense there—not Subway in particular, but fast food in general."
According to Meyer, DeLuca shared his philosophy. "He said, ‘I want to do more than just offer them Subway; I want to offer them significant added value.’" That value resulted from demonstrating the potential of partnerships between restaurants and retailers. "Subway could propose to c-store owners that they utilize as little as one hundred square feet and pay rent—which typically increases the c-store’s profits—while increasing customer traffic in the c-store," says Meyer.
First, however, Meyer had to educate Subway’s development agents, who enlist franchisees in each region, to embrace convenience stores. "Once the agents learned how to talk to and build trust with store owners," Meyer says, "it got down to people-to-people and business grew." Meyer found that Subway is well suited to the convenience store/travel center. "Subway has simplicity," he says. "You can retrofit it into existing operations, so stores don’t require a major makeover or a lot of extra space to house a franchise." And Subway’s peripheral sales effect is very attractive to retailers. "People who buy a sandwich at Subway will also buy other non-Subway products in the store," Myers says, "or even change their habits and buy fuel when they buy lunch."
Instead of telling business owners what to think, Meyer prefers to show them the profit possibilities. He sees branded fast food continuing to move into other nontraditional venues such as colleges, airports, military bases, hospitals, and amusement centers. Part of his marketing strategy for Subway includes identifying which venues and retail chains would be most amenable to quick-service brands.
"I’m considered a relatively unique consultant because I’m also part owner of two c-store chains, in addition to my span of supplier clients in diverse disciplines like funding, education, high tech, and research," Meyer says. With twenty-two years of experience in the convenience store industry, Meyer is somewhat of a recognized authority on its trends.
Meyer and Associates’ other clients span a number of industries, from finance to petroleum. The firm has a policy of never working with supplier companies who are perceived competitors. He also focuses on identifying winning client-consultant partnerships at the outset. "I hang my hat on those companies that share my philosophy. They have to have a commitment to educating retailers on their product or service so that the retailers can make an informed decision," he says.
Although Meyer says he likes to think his marketing strategies are responsible for Subway’s increase in annual sales at travel center venues, he gives much of the credit to Subway. "If my ideas weren’t implemented by Subway’s development agents," he says, "we wouldn’t have gotten anywhere. In fact, I don’t know anyone who’s made more successful entrepreneurs than Fred DeLuca."
|This article orginally appeared in the December 1999 issue of QSR Magazine. All rights reserved.|