Quiznos May Compensate Customers for Botched Free Subs

Chief Marketing Officer Rebecca Steinfort said that Quiznos is trying to turn into a less expensive sub shop. But many of its franchise owners do not want to come along for the cheaper ride. What comes across is a Quiznos that is out of touch with its franchisees and its consumers.

Here's the CMO's explanation of the marketing stumble with consumers.

"I think we would focus on getting better alignment with our franchise owners in advance. . . I think it is something that you're likely to see from us again in the future, but no doubt we need to get every single one of our franchisees on board before we try this again."

The company says it will reimburse disgruntled consumers from its blunder. And judging from the postings on the Internet, those disgruntled consumers are sizable.

"We don't want customers to be dissatisfied. We encourage them to e-mail us and we'll do our best to make things right. If they didn't get the deal they thought they should have had, they should e-mail us."

In regard to its Million Subs Give Away program, it appears that consumers asking for er—a million free subs—surprised Quiznos. Go figure.

I think the volume in which [customers] were coming in surprised a lot of people [franchisees and corporate].

The head office has been trying to push a new strategy and model through its franchise system with considerable resistance.

"We are trying to reposition the brand to be more value-oriented. Strategically, that requires us to change our pricing and to do some discounting to bring people in... It's a little bit of a tough time period for franchise owners as we go through this repositioning. And that's a little bit of what you're seeing."

. . . "We don't want to be the low-price player in the market, but we think we need to have the right price for this food and the food quality that we've got, particularly in this economy. It was the right thing to do before the economic meltdown, but it's absolutely necessary given the state of the economy right now."

Quiznos, who provides $2 mini-subs called Sammies, while Subway provides $3.50 and higher half-subs, has launched a new pricing campaign, "Lower Prices Every Day," similar to WalMart's old motto of "Every Day Low Price." But Quiznos' CMO makes it clear, at least in this interview, that the chain doesn't want to be THE low-price player.

While franchisees were saying that they were having to foot the bill for the free Internet coupons, the CMO disagrees that the franchisees aren't being reimbursed.

"We are reimbursing our franchisees for the cost of all the subs that they give us. . .  We're paying about 90% of the cost of those subs."

Read the whole exclusive interview at WalletPop.

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