subscriptions

Are subscriptions a viable option for your restaurant?

We’ve seen in recent years that subscriptions serve as steady sources of income, so why not apply that model to restaurants? Loosely, this concept looks like restaurants offering services, products, or perks to guests in exchange for a monthly subscription fee. Some restaurants are offering a free appetizer at each visit, bottomless drinks, dining credits, or free delivery – all included as part of the subscription.

A subscription can be seen as a way to offer a higher level of service to customers and a new way to dine, but it’s a win-win. For restaurants, a subscription model can mean a steady stream of monthly income, more visits from regulars, and a rise in customer loyalty.

Do the math

If you are thinking about trying a subscription for your restaurant, make sure that it makes sense for your business model. For example, On the Border tried it out in 2021, offering free queso for a dollar, but it turned out that they were losing money with that model, and had to halt member acceptances shortly after it began.

While it may not work perfectly on the first go, you don’t want to stop and start the program; that can be confusing for customers and complicated for your team. Decide on something that feasible for your restaurant to give the concept a chance.

Focus on value

While it’s important that the model doesn’t result in a loss for your business, it has to add value to the customer. For example, if you are going to offer one free appetizer each month, charging $40 for your subscription will not make sense to your members.

Think of ways that your margins are met while offering something that will appeal to your customers. For example, Panera offered free coffee and tea every month for the subscription cost of $8.99, and they have found that customers were dropping in several times per week to take advantage of that perk – and buying food about one-third of their visits. While you want to appeal to the people who already love your business, the intent of the subscription is to encourage extra visits, so you need to find something that draws customers in more frequently.

Make it your own

We know that loyalty programs work, with members visiting 20 per cent more often and spending 20 per cent more, but subscriptions take loyalty one step further. Studies show that 78 per cent of subscribers are extremely loyal to that business, so it’s a relationship they value once they sign up. The subscription can look like anything you think will be popular with your guests. It could be a points system similar to the traditional loyalty program or it could be a tiered system with different perks for different monthly fees.

Whatever you choose, consider polling your guests first. They know what they want, and if you are able to give it to them, everyone will benefit.

RELATED: How loyalty can help offset the effects of inflation

As restaurants and consumers balance inflation, subscriptions may offer something for everyone, and creating a program while the concept is still new may offer restaurants a way to stand out from the competition, procure a steady monthly income, and get to know their customers better.