Subway sees promise in text ordering

Subway sees promise in text ordering
Tags: Communications, Operations Management, Sandwich, Systems / Technology
January 19, 2010 - Christa Hoyland

Like many consumers, Ford Blakely hates standing in line to place an order when he knows what he wants. Out of that frustration, he founded Zingle, a text-message ordering solution targeted at sandwich and smoothie chains and other restaurants that focus on to-go orders. The technology is intended to make operations more efficient while offering consumers a convenient ordering solution.

For Jeff Druker, a seven-unit Subway franchisee based in San Diego, text ordering sounded like a better option than taking phone-in orders. So the technology buff started testing the service last summer to see if it could save his staff time. He found that the method not only replaced phone-in orders but also helped with outside order accuracy. Even better, it boosted traffic.

"It's also increased the amount of times customers have ordered," he said. "They see the value in it. They don't have to wait in line; they can just pull up and come in and grab it and go."

The test was so successful that Subway and Zingle today expanded it to include 30 additional stores in Southern California.

How it works

Zingle works by assigning a cell phone number to each store. Customers text their order to a particular store and receive a confirmation reply with an order number and the time it will be ready. On the operator's side, the text activates a ring tone on the store's Zingle device. With the push of a button, the operator receives a print out of the order, the originating cell phone number, the time/date and the order number,

During the initial test, Zuker — one of two Subway franchisees testing the solution — found that the text ordering service alleviated all phone-in orders. Doing so improved operations because his employees no longer had to leave the sandwich counter to answer the phone.

He said he also found that order accuracy improved since customers were sending the orders in directly.

"Everybody's so good at texting these days that they can do it so fast. They can just tell you what you want and then you're done," Zuker said. "You can do it (wherever are) whenever you want to go get lunch — that's the beauty of it."

And text ordering eliminated order fraud. Before implementing Zingle, it was common enough for customers to give a fake phone number and then not show up for the order.

Now, Zuker has an actual cell phone number to contact if the customer doesn't arrive. Since June, his seven stores only had two customers not pick up their orders under the Zingle system. "So it's definitely been more foolproof," he said.

Zuker also improved on the efficiency of the solution by having customers pre-ring the orders when they arrived in the store. His employees already did so with phone-in orders thanks to point-of-sale systems that allowed orders to be saved. That way, customers walk directly to the pick-up counter, give their order number, pay and then leave in a short time. All stores in the expanded test will pre-ring orders as well.

Word of mouth spreads

The Subway stores are promoting the text ordering service with point-of-purchase materials developed by Zingle. Druker also added promos to his stores' digital signage and is testing a rewards program at three of his stores. With this larger test, the 38 stores will receive a menuboard panel to promote the text ordering service.

Even with in-store promotions only, Zuker noticed new customers texting their orders.

"That tells us word of mouth is spreading since we're only talking about it in-store," he said. "That's what told me this thing could be real big and eventually get it to the point where were actually advertising it."

If the second testing phase is successful, Subway will likely add TV and radio advertising in those markets to promote the service.

Finding the ROI

Zuker is eager to see the results of this phase of the test to learn if the results in his stores extrapolate to other stores. He found that a store's demographic impacted the number of texted orders, with stores in primarily business districts receiving the most orders. The stores with the next most frequent number of texted orders were those with a mix of business and residential populations.

During the first seven months of the test, some of his stores received five to 10 orders a day while others received as many as 30.

"That's been my track record," Zuker said. "That's why we want to see what this test does in different markets and different demographics to see if it upholds what I've been doing."

This phase of the test also will measure whether other stores achieve the same return on investment. According to Zingle data, the eight stores in the initial test recorded an ROI of more than 800 percent, with the cost of the text ordering service less than one order per day.

"A lot of that doesn't include the intangible value of not having to answer the phone and some of the operational efficiencies that are not factored into this," Zingle's Blakely said. "It's purely sales over cost."