Subway is expanding its Wi-Fi-enabled loyalty program to 600 Canadian stores following a successful pilot, highlighting how fast-food chains can leverage mobile to drive in-store traffic, especially among millennials.

Subway has collaborated with Turnstyle to power the rewards platform, which will send a mobile coupon for a free sandwich to consumers who sign into the store’s Wi-Fi for the first time. This tactic is well-poised to bring hordes of new consumers into Subway locations and fuel a myriad of loyalty sign-ups, even among individuals who initially only want to use the complimentary Wi-Fi.

“Subway’s expansion of Turnstyle throughout its network will continue to help the brand learn more about its customers, increase its marketing base and grow meaningful customer engagement opportunities,” said Chris Gilpin, CEO of Turnstyle.

“The platform will enable new Subway restaurants to increase customer loyalty (visit frequency) and create compelling omnichannel marketing initiatives.”

New loyalty innovations
Although mobile loyalty has become a paramount strategy for any quick service restaurant chain, many brands are rolling out similar rewards programs that fail to excite non-regular customers. A tried-and-true loyalty model is one in which consumers can sign up for an account, collect points for each meal they order and eventually redeem those points for a complimentary menu item or discount.

Subway is breaking the mold by foraying into Wi-Fi-enabled loyalty, a tactic that will likely give the made-to-order sandwich brand a leg up on its competitors.

“Whether it’s Wi-Fi, BLE, GPS or any geolocation-based service, it’s proving to be a game changer for all merchants that provide utility to the consumer – either via connectivity or timely discounts,” said Jon Squire, CEO and founder of CardFree. “Consumers are more than happy to provide some personal data in exchange for an enhanced experience and Wi-Fi is clearly a big enough hook.”

Once consumers enter into a Canadian Subway location, they may pull out their smartphone and request to connect to the store’s Wi-Fi. The Wi-Fi’s landing page will give them the option of connecting via Facebook, email or text message.

Individuals signing onto the network for the first time will then receive a digital coupon from Subway, either by SMS or email, for a free sandwich. Therefore, consumers who pop into the store simply to take advantage of the free Wi-Fi can also enjoy a complimentary meal to augment their mobile browsing experience.

Customers will subsequently receive more rewards as they continue to frequent the location, with promotions arriving based on how often they visit.

Subway initially introduced the loyalty program pilot to northern Ontario restaurants, and is currently rolling it out to 600 locations across Saskatchewan, Alberta and other parts of Ontario. The brand believes this move will ramp up customer retention rates and collect valuable insights on consumer behavior.

Additionally, the program will likely resonate positively with the millennial demographic, which is highly reliant on smartphone and Internet usage.

Delectable results
Subway has already seen optimal results from the Ontario pilot. The brand first bolstered customer loyalty by urging guests to opt-in to Wi-Fi networks to receive free items and additional customized rewards last spring, suggesting that Wi-Fi monetization is on the rise for food and beverage marketers (see story).

Those who took advantage of Subway’s free Wi-Fi returned to a store 1.8 times more frequently than consumers who did not. Meanwhile, customers who redeemed the initial free sandwich coupon increased their store visits 5.2 times more than they did previously.

Subway saw a 17 percent redemption rate for the digital coupon, significantly towering over the industry norm for direct mail coupons, which is typically one to three percent.

“You can’t argue with results; if it is seeing this increase in both frequency and coupon redemption, you can expect to see similar store-to-store growth as it expands the program,” Mr. Squire said. “Real-time offers are one of the most relevant features of a good mobile program and if these offers actually get smarter with known customer behavior/preferences, Subway will see them dwarf the 17 percent redemption rate.

“Some of our partners come close to 50 percent on highly-targeted campaigns.”

The fast-food marketer has also been making waves in the mobile commerce sector by adding additional payment options for consumers.

Over the summer, Subway played catch-up to other quick service chains via a collaboration with PayPal that garnished its mobile offerings with an app for placing and paying for orders that likely culminated in a revenue uptick (see story).

Turnstyle is also powering loyalty programs for several other brands, including Cadbury and Mac’s convenience stores, suggesting that shoppers can expect to see more of these types of locations get the Wi-Fi rewards treatment soon.

“Social Wi-Fi is a powerful tool in that it enables consumer engagement across multiple channels and contexts,” Turnstyle’s Mr. Gilpin said. “Turnstyle’s proximity engine allows for hyper-relevant messages to be sent to customers right when they enter a venue; the perfect time to reward customers for their patronage and build brand loyalty.

“Also, entry messages are a great way to help influence purchasing decisions,” he said. “Turnstyle’s marketing platform also analyzes customer behavior patterns and automatically flags customers who are at risk from disengaging with a brand.

“Engaging this segment of your customer base is a great way to re-establish a relationship with them, and we see very positive results in patronage after re-engaging with these clients.”