Subway Has a Track Record of Handling Its Business Crises Poorly. Here's What You Can Learn From the Chain's Shortcomings.

August 21, 2021 5 minutes read
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Subway has been through a series of crises over the years and suffered plummeting sales. It closed nearly 2,400 stores in 2020. In early 2021, two Subway customers filed a lawsuit in the U.S. District Court of California claiming that the tuna salad was not tuna and may even have been fish.

Subways PR team went on a creative high to defend the lawsuit. They tweeted, "Keep fishing folks. We'll continue serving 100% wild-caught Tuna." Also, Jessica Simpson's 2003 Chicken of the Sea gaffe was the subject of a fun Twitter exchange. The brand offered 15% off footlong tuna salad subs if customers used the promo code ITSREAL.

Subway Headquarters sent out a promotional tweet and cleverly promoted the lawsuit. However, its messaging does not address the trust issues customers have complained about for years. Did you know that Subways bread was not bread when it was declared by an Irish court? How about the time someone claimed that their footlong was actually 11 inches long? Jared is a great example of this.

As the company has been on a steep revenue decline for close to a decade now, it might be time for Subway to ditch the duck-and-counterpunch routine, and instead address their current crisis while also making some fundamental shifts in their communication style.

Each business has its crises points. But it's how leaders handle them that is important. You don't want to make unforced mistakes in your handling of the fake tuna crisis.

These are four lessons Subway's failures can teach you about managing a crisis.

Transparency is key

Subways' communication strategy was smart, but it did not communicate trust well because it didn't include testimonials or sourcing information from Subways seafood sources. Subway should be less clever and more transparent in its communication. Instead of tweeting cleverly, you should film the seafood suppliers who bring in the catch of today for your restaurants. Transparency is a problem if it's not already.

Learned lesson: Communicate openly with your customers. Although you may want to avoid a crisis or to be as transparent as possible (or, in the case of Subways, to try to back up against those who hate you), trust can be built when you communicate openly and transparently with your customers.

Related: Resilience and Companies: 5 Essential Pillars to Strengthen in Crises

Pledge to do better

Subway should not be a victim of cleverness or avoidance, but instead take fundamental steps to improve. The company took significant steps to improve its food safety protocols after the 2015 E. Coli epidemic at Chipotles. To mitigate the problems that caused the outbreaks, the company created an independent Food Safety Council. It will evaluate the company's food safety, staffing, and training. Subway has provided a more thorough statement on sustainable fishing practices. However, the language on Subway's website still refers to long-term changes and not immediate actions.

Lektion learned: Once you've acknowledged the problem, it is important to immediately take steps to show your customers, employees, and shareholders that things are going to be better.

Related: 7 Steps to Recovery After a Reputation Crisis

Revert to the basics

The 1985 New Coke catastrophe taught us something: sometimes companies have to stop innovating and go back to the basics. Subway has expanded its menu with a variety of soups and flatbreads. This has led to Subway losing sight of what helped it grow: fresh, simple sandwiches that are made right in front the customer. Subway's slogan "Eat Fresh" is a call to action.

The lesson learned: Many companies do too many things in a poor way. It is important to excel at only one thing. Subway makes sandwiches. Your company does what? Refocusing on your core functions is key to getting out of a crisis.

Keep up with the times

Healthy eating, sustainable food sourcing and environmental impact are all important. These aren't just buzzwords, they are something customers care about. Whole Foods recognizes that customers today care about sustainability and so they put it on the shelves. Although the brand has seen improvements, Subways' lack of information about tuna sourcing had a real impact on customer confidence. It doesn't just cause a lack trust but also makes Subways seem out of touch.

The lesson learned: It's not about being politically correct or following the latest trends. Recognizing and adapting current ideas is important. Recognizing fundamental changes in society is key to making sure your company is part of the conversation. Keep your eyes on your core business but be open to changing circumstances. Do not let your business slip behind.

It is up to Subway to decide how they deal with their latest crisis. You can either prepare for or avoid a crisis by learning these powerful lessons now and how they affect your business.

Related: Learning Opportunities from Crises