When you think of subscription services, the first thing that comes to mind probably isn’t a restaurant subscription service. Names like Netflix, Amazon Prime, and Spotify usually spring to mind.
But there are all kinds of subscriptions spanning many industries, many products, and many services. There are subscriptions for beauty products, cloud storage, magazines, and more.
Meal subscriptions like Blue Apron and HelloFresh have risen in popularity over recent years, proving that paying a set monthly price for food might be a concept people are willing to roll with.
So where do restaurants fit in?
Subscribe And Save
Just before lockdowns began to sweep the nation, Panera Bread launched what Business Insider called an “unprecedented” $9 monthly coffee subscription: MyPanera+ Coffee. For the price of only $9 a month, subscribers gain access to unlimited coffee – hot or iced, any size, and to your liking.
Being the avid coffee drinker that I am, I immediately jumped on the offer. I’d been hearing about restaurant subscriptions services for a while at that point, but none had caught my eye up until that point. I was eager to see one in action.
About nine months later, I’m still actively using the program. It hooked me. And it’s shown me just how effective the model can be for restaurants when executed effectively.
Finding Your Model
Here’s the thing. A subscription isn’t going to work for every restaurant. Not only can models vary wildly, implementing one will require you to evaluate how one might fit with your business objectives.
In a conversation with Business Insider, Panera CEO Niren Chaudhary described his thoughts on the program, revealing why it’s such a good fit for the company. “We feel that this is a terrific way to get consumers more interested in not only in our coffee platform but also for them to get exposed to the strength of the food that we have in our cafes, particularly around breakfast.”
Right there, Chaudhary reveals everything you need to know about what they’re seeking to accomplish. Appropriately, he hypes the coffee platform first. But then he talks about the food. The subscription isn’t just about making money on coffee. It’s about getting those customers to think “Oh, maybe I’m going to order a bagel to go with my morning coffee today.”
Next thing you know, that customer is ordering a bagel every single day. They’ve turned into a regular. They’re a reliable source of revenue.
I can’t tell you what subscription model is going to work for your restaurant. It’s a newer concept. Experimental. Even the big players are figuring it out. What I can tell you is that if you decide to try it, you need to be strategic about it.
Fuel Your Loyalty
A regular customer is a loyal customer.
I talked about this a bit last week when I wrote about three different ways businesses can earn more repeat customers. I cited research from Yotpo stating that 37% of customers don’t consider themselves brand loyal until they’ve made five purchases.
Five purchases can happen pretty quickly when you’re using a subscription service.
Loyal customers are, as you might now, highly beneficial. They often act as brand advocates, spreading the good word about your restaurant. They’ll write online reviews, post pictures on Instagram, and invite their friends to dinner.
Subscriptions may even help build your loyalty program too. Early data from test markets (reported via Business Insider) revealed that Panera saw a 25% increase in loyalty sign-ups. The most intriguing element? Almost all of those customers were new.
While you may be hesitant to launch a subscription service in the middle of a pandemic, now may be a better time than ever to implement a subscription service.
A September study from PropertyNest (reported via Restaurant Business) found that 55% of New York City residents expressed interest in joining a restaurant subscription service. 5% of respondents noted that they’d join a subscription purely for the purpose of helping one of their favorite restaurants keep the doors open.
The data heavily favored the value-conscious Gen Z in particular – those aged between 18 and 24. Older customers weren’t as attracted to the idea.
As we discussed last week, courting Gen Z is an important consideration for restaurants to make heading into 2021. If you’re looking to earn more Gen Z customers, a subscription model may help your restaurant stand out.
Get Started With CoGoBuzz
Whether you’re one of our current customers, or you’re interested in joining the CoGoBuzz family, we’re committed to helping businesses affected by COVID-19.
For current customers, we’re providing free text message service, allowing you to send a link to order online, purchase gift cards, and/or notify customers of new hours.
For new customers, we’re offering our hardware at cost, donating our services, time, and covering shipping costs. Prepare for the future with CoGoWiFi Free to collect your customers’ phone numbers. There are no contracts or monthly fees, and we offer unlimited customer data storage.
Message from our CEO
“From pricing to packaging, our mission has always been to provide customers with unbeatable value. That’s why, in response to the coronavirus pandemic, we are seeking to provide the most aggressive offers to help suffering restaurants survive. We believe that half of small restaurants will fail in the year after operations return to normal. The restaurants that survive and thrive will be the ones that win loyalty and focus on bringing customers back over the following year.”
– Steve Gould, CEO
Has your restaurant considered a subscription service? Let us know in the comments.