John Shea, Chief Marketing Officer at Jimmy John’s, joins Americus on Marketing Matters in this part one of a two part session to discuss the roots of the company and why the 3rd party delivery model isn’t a good fit for this sandwich giant.
John tells Americus that it all started in 1983 when founder Jimmy John Liautaud opened his first storefront in a not so good location that lacked any foot traffic. So, Jimmy John decided to deliver sandwiches to hungry college students at a nearby campus and gained the reputation of the freaky fast delivery guy. It is a model they have perfected over the years first out of necessity, and now it’s part two of their brand ethos-cold sandwiches fast. John notes that Jimmy John’s also focuses on quality, with only the freshest ingredients such as bread baked every four hours, hand-sliced meats, and fresh, locally sourced vegetables.
John talks about one of the biggest changes in the industry recently is the surge of the 3rd party food delivery service, growing at a rate of 20% per year. John noted that they had to take a look at how the trend could fit within their current business model. They conducted research and dug into how delivery affects customer experiences. When considering food delivery, consumers look at the speed of delivery, the cost of delivery, and the quality of the food. For speed of delivery, 92% of customers want their food delivered in 15 to 30 minutes. The big 4 (Grubhub, Uber Eats, DoorDash, and Postmates) delivery services average about 50 minutes for delivery, while Jimmy John’s averages 18 minutes. You also see a big mark-up in delivery fees, with the big 4 averaging $8 in fees, while Jimmy John’s only charges around $2. Finally, when mentioning 3rd party delivery, the average rating of restaurants is only 1 ½ out of 5 stars with 35% of customers reporting issues. When also considering the impact of the 3rd party delivery services on franchise economics (fees to 3rd party delivery services can range from 20%-30%, making those orders pretty much not profitable) it was a clear decision for Jimmy John’s to continue to deliver freaky fast sandwiches on their own terms.
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