Subway takes direct-mail marketing mobile, wireless with goZing

LOS ANGELES -- Cell phones, pagers and personal digital assistants are becoming ubiquitous. And as more consumers join the phalanxes of the wirelessly connected, restaurant operators like Subway franchisee Rick Sender are exploring the potential of the devices to contact and market to their customers.

Through a pilot program Subway restaurants in Southern California are reaching out and touching potential diners with geographically targeted, time-sensitive electronic coupons and special offers that are delivered directly as text messages to their mobile phones.

Subway's new wireless-based initiative is being done in collaboration with goZing.com, a company based in the Los Angeles suburb of Encino and headed by co-founder and president Matthew Dusig.

"Up until now advertisers have not been able to reach someone wherever they are at any given time," explained Gregg Lavin, co-founder and vice president of business development of goZing. "For example, at 11:30 a.m., right when most people are thinking about lunch, you can put a promotion from Subway right on someone's hip and at the top of their mind just when they are thinking about making their lunch plans."

Dusig and Lavin emphasized that their mobile marketing venture is permission based. Consumers who register at the goZing site complete a survey that asks them to specify their areas of interest, such as restaurants or music or photography. Only if a goZing member indicated an interest in a given area will they be contacted with offers, Dusig said, adding that users can turn the service off at any time.

To date goZing has signed up 50,000 members, Lavin said, adding that people are signing up at the rate of about 1,500 a day.

As an incentive to participate, consumers are rewarded with points that can be redeemed for cash or merchandise every time they receive a goZing message, Dusig said.

Subway is promoting goZing with point-of-purchase displays in 525 stores in Southern California, said franchisee Sender, the owner-operator of fives Subway units in the Los Angeles area. The POP displays include flyers for goZing that direct customers to visit the site and fill out the survey to receive a free Subway sandwich.

Sender, who is a member of the local and national advertising boards for Subway franchisees said the 6-week-old pilot program is too new for him to gauge its effectiveness accurately. However, even without quantifiable results on response rates, the program still is providing valuable information to operators, especially given the lack of POS systems or any other in-store technology capable of capturing demographic data in Subway stores, he said.

"To me the most crucial thing this offers any retailer is a profile of their customer base and the ability to get a hold of that customer at a moment's notice," Sender said. Once a customer has visited a store and opted in to the goZing program by completing the online survey, the chain "has captured an existing Subway customer; we know what they look like perfectly -- their likes and dislikes and demographic data," Sender said.

He added that despite his enthusiasm for the potential information bonanza offered by the program, the rollout of goZing has encountered some bumps, Sender said.

The fact that "Subway really doesn't have a franchise-driven communication system on a local level to assist with the rollout of marketing program" has been a hindrance to the effectiveness of the goZing/Subway program, Sender explained. The training and awareness of the new marketing effort has not reached down to the store level consistently.

"There have been some cases where a customer has come in with his device and said, 'Hey, I just [was paged] for this deal,'" Sender said. "And the franchisee, not being aware of the program, turned the customer away because he was not aware of the program."

Sender emphasized that the problems thus far have "been a Subway problem, not a goZing problem." He added that they "will work themselves out as more and more people come in, and franchisees pick up the phone to ask where these pages are coming from."

GoZing says it can point to only one test, in which a text message with an offer of a free subway sandwich was sent to 800 customers and drew an 8-percent response rate. However, even though results are still sketchy, other quick-service restaurant companies seem eager to jump on the wireless bandwagon.

According to Dusig, Papa John's Pizza is testing goZing in 10 stores in L.A.'s San Fernando Valley, and KFC is in a pilot program with 24 stores in Southern California. He said Dairy Queen also has a test underway at 20 Los Angeles area units.

Dusig said goZing eventually would include casual-dining chains and fine-dining establishments in the mix of products the company promotes. He pointed out that goZing already is asking customers to include information about what category of restaurant they would prefer to be contacted by. Eventually, goZing will offer separate channels for each restaurant segment, Dusig said.

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