In the mid-eighties, Subway opened in my small hometown offering a fresh, healthy alternative to traditional fast food. My friend and I would ride our bikes two miles, cross a busy highway, and pass multiple other fast food restaurants to get a sandwich. Subway continued to brand their stores as fresh and a way to lose weight for the next 25 years and then the message changed.
Already in a Downward Spiral
As a consumer, it seems to me that Subway’s message changed. They now advertise inexpensive subs with a daily deal, $5 footlongs, and sometimes a new type of sandwich. I rarely see advertisements for freshness or healthiness. Is it because they no longer can compete with other restaurants purchasing fresh locally grown produce and ingredients? Franchise owners find themselves in a bind offering sandwiches at an extremely low margin with inferior ingredients to competitors. As a result, Subway has lost hundreds of stores in the last year and are losing market share. Subway is a company that has lost their identity. Is this the sandwich shop which offers healthy, fresh alternatives to traditional fast food? Or is this the sandwich shop where I can get cheap food? Subway has lost their identity.
In the Midst of Decisions
Late last year, The New York Times published a scathing article about the practices of TIAA, the massive financial services company I started working for out of college. The once untouchable financial giant was now under attack. Issues regarding advisor conflicts of interest, aggressive sales tactics, deceiving messaging, and expensive fees were brought to the forefront. Just a few years ago, these allegations would have been unthinkable by the millions of investors who adore TIAA.
Shortly after the first TIAA article was published, I was contacted by a journalist from the New York Times to express my opinion about the financial giant for a follow up article. This made me reflect on the company I knew when I started in 1999 compared to the present day TIAA. When I started with TIAA, they were fresh off losing their tax-exempt status which opened a myriad of opportunities for the company to offer additional products and services. At the time, sales goals were not tracked and acting in the participant’s best interest was all that mattered. Over the course of the last 20 years, TIAA has matured into a full scale Manhattan-based financial services company. With this, comes potentially higher fees for clients along with sales pressures and huge bonuses for their sales team – Wealth Management Advisors. TIAA now finds themselves operating like a “Wall Street” firm with the messaging of a “not-for-profit”. There is a disconnect and TIAA is at an identity crossroads. Do they identify themselves as a low-cost firm providing great customer service always acting in the client’s best interest? Or do they identify themselves as a high-flying Wall Street firm that has evolved into a player in the investment industry? TIAA is at a huge crossroads with a critical identity decision looming.
What Can be Learned?
A friend’s furnace recently went out on a cold Sunday winter morning. He panicked and called an HVAC company to fix his furnace. After bad service and a ridiculously high quote, he decided to contact another company who promptly came out and fixed his furnace at a quarter of the cost the original company had quoted. Feeling gouged by the unfair quote when he was in a vulnerable position, he put a harsh review in Yelp and shared the review on Facebook. Feeling curious, I clicked on the review to find the owner had disputed the review and continued to call the reviewer names. I also noticed that there were multiple 1-star reviews which YELP had repressed with the same result. Unfortunately, this HVAC company has a brand identity -it is expensive, and the owner is a hot head.
Every store, service company, small business, and corporation has an identity. There is a lesson to be learned from Subway, TIAA, and the HVAC company. Subway has lost their identity, TIAA is in the midst of an identity crisis, and the owner of the HVAC company has sabotaged his company’s identity. Reflecting on, identifying, and acting consistently over time will form a company’s identity and lead to success.
When I write this company’s name, the entire reading audience will simultaneously have the same thoughts – Starbucks. (This article, of course, was written before the recent bad press which put Starbucks in the news) This is brand identity! Howard Schultz, Executive Chairman of Starbucks, reflected, “Mass advertising can help build brands, but authenticity is what makes them last. If people believe they share values with a company, they will stay loyal to the brand.” It may be time to take a fresh look at your company’s identity.