In today’s economy, operators are striving to turn first-time visitors into repeat customers, as customer loyalty becomes crucial for increased revenue. 41 per cent of consumers say that loyalty programs encourage restaurant visits, so the right program can boost traffic and maximize your margins.  Following the models made most popular by companies like Netflix and Spotify, some restaurants have adopted a modified system where they receive a monthly fee, and their customers enjoy perks in return for their loyalty. Subscriptions have been on the rise for restaurants since 2020, as operators try and get creative with customer retention and loyalty.

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How does this work and is it a model that might work for your restaurant?

The benefits

Loyalty subscriptions can be a win-win for restaurants and diners if they are executed correctly. They offer added value for regular customers, saving them time and money, and showing appreciation for their business. For operators, a loyalty subscription allows for consistent, predictable revenue, along with valuable data from regular customers , and a chance to stand out form the competition.

Getting started

It might seem daunting to create a subscription program on top of your loyalty program, or even all on its own, but start by generating ideas around what you can uniquely offer, what your staff can manage, and what will bring added value to your members. Here are two ideas to get you started:

• You might want to start with something simple, like a meal kit promotion, where members pay a set fee for a weekly meal kit. This could be something that you decide ahead of time, ordering and planning the inventory in advance, or it could be something that uses up what you have in your kitchen for fun, new creations each week.
• If you have a signature appetizer, cocktail, or dessert, you may want to feature that as part of a subscription. This could allow members to order a set number of orders per week or month to encourage visits and potentially increase guest cheques with upselling and LTOs.

It’s important to define the frequency of your model right from the start. Next, create the offer and plan the execution, from purchase to production, including marketing and staff training to offer a subscription model that works well for your guests and your business.

Models that work

Some restaurants have managed to hone this model, standing out from the competition and achieving increased membership. Whether it’s temporary, recurring, or permanent, subscriptions have proven to be a useful tool to improve loyalty, boost traffic, and increase sales for restaurants. Using some successful examples of subscriptions as a guide can help you develop something that works for your restaurant.

Panera launched its program in 2020, and for $8.99 per month, members have unlimited access to free coffee. Data in 2021 showed that members visited Panera eight times more frequently than non-members, so they have expanded their offering, crediting 25 per cent of the annual revenues to this program.

Taco Bell and Subway have also executed successful subscription models in the past. Taco Bell has experimented with a Taco Lovers Pass and a Nachos Lovers Pass, both charging members a monthly fee to receive a set number of free orders per month. Subway has a recurring promotion with the Footlong Pass, selling a limited number of passes periodically that allow members to receive 50 per cent off one footlong sandwich per day throughout the promo period. Initially, Subway sold out 250,000 passes in six hours, demonstrating how popular the promo was for customers.

Recently, Chuck E. Cheese introduced a new subscription service that allows families to visit as often as they want, playing up to 250 games per day and enjoying multiple offers and discounts, for a set monthly fee. Members have the option to choose from monthly passes or two-month subscriptions, available in three tiers, depending on which billing and level of membership they prefer.

Subscriptions offer restaurants a chance to boost loyalty and revenues, but they need to provide guests with increased value and a superior experience. Competing in this space means that operators need to be able to deliver on their promises to get guests coming back and using the subscription to build true customer loyalty.