Subway Foot-Long PR Nightmare

Once you make a claim – make sure you can stick to it. That’s the hard lesson that fast food chain Subway is learning. (Shame on its legal team!). Subway sells a sandwich called the “foot-long sub”. Needless to say it is suppose to be a food long.

As always, an overzealous customer popped up who ordered the sandwich and measured it. (Yes, we are talking about a male customer – pun intended).

 

Mr. Matt Corby of Perth (Australia) measured his food-long sub and found it to be 11 inches long. Needless to say, in this social media age he vented his outrage on Facebook, where he also posted a photo of his sub alongside the tape measure on the company's page with the caption: “Subway, please respond."

The page received more than 131,000 likes and thousands of comments, ranging from "I think they [Subway] owe us some," to "there are way more thing in life to worry about then 1 inch of sub."

The New York Post launched its own “investigation” and found that most New York Subways serve foot-long subs that are less than a foot. According to the NYP, four out of seven "five-dollar foot-longs" purchased at Subways in Manhattan, Brooklyn and Queens, measured 11 or 11.5 inches.

Subway attributes the discrepancy in length to the fact that the bread is baked fresh daily in each of their 38,000 restaurants, which makes sense in my humble opinion. The chain went on to state that they are looking into the matter.

The company stated: "We are committed to providing a consistent product delivering the same amount of bread to the customer with every order. The length however may vary slightly when not baked to our exact specifications. We are reinforcing our policies and procedures in an effort to ensure our offerings are always consistent no matter which Subway restaurant you visit."

The story made the rounds and was picked up by major news outlets such as Fox.

How can Subway overcome this PR nightmare?

1. Check the reasons why one foot is not one foot, and post it on YouTube, Facebook, Twitter, and LinkedIn.
2. Issue a press release explaining the discrepancy and thanking Mr. Corby for his due diligence.
3. Make Mr. Crosby a Subway ambassador and award him perks.
4. Encourage customers to help improving products and service.
5. Last but most least: use humor! A funny video or picture will be a healthy antidote!

FAQ that Companies Have for Their PR Agencies (Part I)

Companies and clients often ask a lot from their PR agencies or marcoms. Not without reason - since PR agencies work on a monthly retainer, the company wants to get maximum results.

As anyone in PR can tell you; it’s a tricky field. You have to put in a lot of effort and networking that is not visible to the company or client. In the end, it’s the results that count. Any company that hires a PR agency asks the same main questions.

In this post and the next one, I will address these FAQ.

1. No agency is in contact with all relevant journalists.

Yes, journalists of trade magazines and broadsheets relevant for you must be targeted - in the Americas, Europe, and the Far East depending on your business. But is it unrealistic to expect your PR agency to be on first name basis with all of them. They do have their own database and network though and will try to get you as much targeted exposure as possible. Please note that journalists don’t always bite. Yes, that is chutzpah considering how cool your company and product/service is, but that's life in the media lane.....

2. The location of a PR firm or professional is not that critical anymore.

However, if you are considering investor relations, it helps to be in or near the main financial centers, such as New York, Los Angeles, London, Paris or Tokyo. If you are targeting governmental agencies in the US, finding a PR agency near Washington DC helps, as does finding one in Brussels if you want to target EU-related governmental bodies and influencers.

3. Think local.

No PR agency is truly global. Many have partner agencies in other countries, which makes them highly effective. To reach journalists in Europe, you do need to communicate in the local language. No journalist of La Stampa, Le Monde, or Die Zeit will communicate with you in English.

4. You do need to send out press releases, but they must be newsworthy.

Publicly traded companies must put out a press release on any change that could influence investors’ decision to buy or sell stock (e.g., appointment of a new C-level manager or board member). Private companies can (and must) be far more selective. A new product release, major contracts, deals and partnerships, as well as received investments are all worthy of a press release.

To get the news out, I strongly recommend using one of the major paid distribution companies. My favorite is PR Newswire, which also takes care of translations and distributes to all media channels (including social media) in any region and industry you want.

5. A PR agency is only as good as the input they receive.

It is therefore crucial that you as a company or client share your goals, competitive information, and yes, all the relevant skeletons in you closet. Any publicity based on faulty or incorrect information, will backfire big time.

6. Some PR goals are unrealistic.

“Get me on Oprah” is a mantra that companies have been singing for many years. Chances are very slim, to say the least. Sending out (by email) and uploading B-roll footage (e.g., to YouTube) to be freely used by the media is cheaper and far more effective. Cold calling the media is a waste of time (and money), trust me!

To be continued in Part II - keep posted!

(Image courtesy of Jeff Bullas)

Innovative marketing - lawyer-style

One of the best innovative marketing strategies I recently came across, is the brainchild of the Cueto Law Group. This Miami, Florida-based law firm allows its clients to pay up to 20 percent of their legal fees with carbon credits. (Click here for the press release)

Carbon credit trade works as follows: a fixed, high penalty rate is applied to emissions that exceed a set target and firms are free to buy qualifying credits on the open market to bring their balance below the target level. The price of carbon on the open market will vary from scheme to scheme but is guaranteed to be lower than the penalty rate. Hence an upper bound is set for the price of carbon and classical market efficiencies force the real price of carbon emissions as low as possible. Carbon credits thus represent permits to emit climate-warming greenhouse gases. One carbon credit unit is commonly equal to one ton of carbon dioxide emissions.

Under the law firm’s program called “CO Too,” its clients can pay with carbon credits which the company can then trade in the international carbon markets.
"Our CO Too program is a way to help the environment, while at the same time providing an alternative way for clients to pay for professional services. We are proud to be leading the legal industry in this initiative,” said Cueto.

Mr. Cueto went on to say that he is optimistic that other industries will follow his company's lead. He stressed that carbon credits have gained significance as a legitimate currency with which to transact business.

"The current economic climate is a golden opportunity for the professional services industry to develop new ways to tackle global emissions.” He went on to say that credits represent a “paradigm shift” in the way business is transacted.

The global carbon credit market was valued at $126 billion in 2008. The World Bank estimates that the market could grow up to $150 billion by the end of 2009.

The Cueto Law Group consists of Santiago A. Cueto and his associate in Lima, Peru. Established in June, 2009 they are largely doing litigation for international clients with U.S. problems.

Cueto obviously knows a thing or two about marketing – his website is a textbook example of the latest trend in corporate website design, including news feeds, blog, etc. His timing is also impeccable – he launched his “CO Too” program during the Copenhagen Climate Change Conference 2009.

Although no clients took Cueto up on his offer yet, the media impact was a marketer's dream come true.
Prominent WSJ blogger Ashby Jones interviewed Cueto and quite a few eco magazines and blogs picked up the story, including Ecoseed and Mother Nature Network.

It shows how a clever marketing idea announced in a press release distributed via PR Newswire can put a small law firm firmly on the map.

(illustraton courtesy of www.toothpastefordinner.com)

Is the SEC killing the press release – not likely!

On July, 30 the Securities and Exchange Commission (SEC) published its recommendations for public companies in their efforts to comply with the securities laws “while developing their Web sites to serve as an effective means for disseminating important information to investors”.

It sparked a hot debate among IR and financial PR professionals, who are trying to figure out what the impact is. Many IR/PR agencies make good money writing and distributing press releases on behalf of public companies. Since a public company must announce any change in ownership and significant deals as well as notifications, earnings, profit warnings etc. to the public at large, the financial press release was the only way to go.

By opening the possibility of posting all of the above on a corporate blog, it could mean the “death of the press release” as one PR professional put it. IR and PR circles were abuzz with speculations how the major new distribution agencies such as PR Newswire would take it.

Public companies have been weary of using the Internet as a public space for the dissemination of material information, not in the least since they need to comply with Regulation Fair Disclosure (Reg-FD) and Sarbanes-Oxley (SOX) rules. The SEC is now opening the possible for companies to adhere to regulatory policies without using some of the more traditional methods such as financial press releases. If public companies would opt en masse to use the Web for information distribution, particularly for earnings disclosure, it would have a huge impact on IR and financial PR agencies as well as the newswires.

Thus far, most companies have been leery of using websites to provide investors and other audiences with regulated information, such as earnings.
Beth Harbin, director of PR for Southwest Airlines, is hesitant about changing its current system with PRN, though she acknowledges the positive benefits, which have helped carve out a place for earnings on the airline's website.
"Since we started our... site, we've always had a vision of making it extremely robust," she said. "We currently have earnings up on our website, as part of a system developed through [PRN]," she said. "It also puts that release right in the hands of the reporters who need it."

It is at this moment not clear what the full impact will be. The SEC document seems to indicate that the SEC wants to open the use of public companies’ websites as part of the whole process of disclosing information in accordance with the Regulation FD.

The SEC stated that it “believes that company disclosure should be more readily available to investors in a variety of locations and formats to facilitate investor access to that information. Investors are turning increasingly to electronic media and to company and third-party websites as sources of information to aid in their investment decisions."

It seems that the SEC does recognize a company website as a channel of distribution. The information must be disseminated in such a way, that it is available to the securities marketplace in general.

How can a public company guarantee that? By taking more affirmative steps so that investors and others know that information is or has been posted on the company's website.
Trying to avoid the costs of issuing a financial press release (of which many companies complain), would not only incur alternative costs (e.g., mailing list and distribution + follow up, SEO, administration, legal & accounting department) but could also jeopardize compliance with SOX.
What would therefore be the best option for public companies to ensure the availability of their information to the investor and securities communities? Correct, by sending out their announcement as a press release!

Using (only) their website for announcements will be risky. Companies will need to consider whether the postings on their websites are “reasonably designed to provide broad, non-exclusionary distribution of the information to the public.” This would entail serious organic SEO or in-house website management with tracking and reporting capabilities.

Another issue is the requirement that the website's capability must meet the “simultaneous or prompt timing requirements for public disclosure once a selective disclosure has been made." This puts a strain on a company’s resources. For practical reasons alone, sending a financial press release via the newswire remains the preferred option, since it will be pushed to Yahoo Finance, MarketWatch, MSN, CNNMoney, CNBC, Factiva, Forbes, Fox Business News, Lexis/Nexis, sites operated by major financial institutions and trading firms, blogs etc.

It relieves the public company from the burden to determine whether its website qualifies as a "recognized channel of distribution" and whether web posting achieves simultaneous disclosure. If you are the IR Officer, CFO, CEO or Legal Advisor of such a public company, you would have your work cut out for you, and the SEC doesn’t supply comprehensive guidelines or instructions to that effect.

The SEC's Advisory Committee on Improvements to Financial Reporting states in its final report: "Of course, the increased use of corporate websites is not intended to affect the valuable role that newswires and other news vehicles play in disseminating important company information to investors and the public."

Despite the fear of many IR and PR professionals – the SEC is not killing the press release, it just hands us another IR & PR tool.