Restaurant subscriptions have recently seen massive growth as part of the broader subscription market surge. This trend, fuelled in part by the pandemic, is reshaping the dining landscape and showing no signs of slowing down. The overall subscription market is expected to reach $1.5 trillion by 2025, with restaurant subscriptions playing a significant role in this growth.
The Subscription Boom
The Allure of Subscription Models
Subscription services are thriving, thanks to the convenience and personalization they deliver. Originally made popular by digital giants like Netflix and Spotify, subscription models have now spread to many other sectors like retail, food, and even healthcare. On average, American households are spending over $200 each month on various subscriptions, so there’s plenty of subscription pie to go around.
Source: Insider Intelligence
The trend was accelerated by the COVID-19 pandemic. As online shopping and home delivery demand skyrocketed, businesses turned to subscription models to keep customers engaged. The steady revenue stream they provided for businesses made them an attractive option in a time of uncertainty.
Technological advancements have also fuelled the rise of subscriptions. Tools for easy online payment processing, data analytics, and customer relationship management have made it simpler for businesses to create customized experiences and handle subscriptions with greater efficiency.
The Rise of Restaurant Subscriptions
In recent years, restaurants have increasingly turned to subscription programs to nurture customer loyalty and unlock new revenue streams. Restaurant subscriptions took off right when COVID-19 hit in early 2020, as a way for restaurants to keep customers engaged and loyal when they couldn't dine in. The growing success of subscription models in other industries made it easier for restaurants to participate since consumers were already comfortable with the idea.
Restaurants adapted by rolling out subscription-based offerings, ranging from regular meal deliveries and unique dining experiences to membership benefits like exclusive events and discounts. The integration of digital platforms and apps (like Craver’s) played a crucial role in simplifying the management of subscriptions, streamlining payment processes, and enhancing customer relationship management.
Benefits of Restaurant Subscriptions
Customer Benefits
- Cost Savings: Restaurant subscriptions often offer services or products at a lower cost compared to one-time purchases, providing value for money, especially for frequent guests.
- Convenience: Regular deliveries or guaranteed services eliminate the need for repeated ordering or reservations, simplifying the dining experience.
- Exclusive Access: Subscribers may receive early or exclusive access to new menu items, events, or special promotions.
- Personalization: Many restaurant subscriptions offer personalized experiences based on customer preferences, enhancing satisfaction.
- Consistent Quality: Guests can enjoy consistent quality from a restaurant they trust, without the risk that can come with trying new places.
Restaurant Benefits
- Predictable Revenue: Restaurant subscriptions provide a steady, predictable revenue stream, crucial for financial planning and stability in an industry known for its fluctuating income.
- Customer Loyalty: Regular interactions with subscribers foster deeper relationships, enhancing customer loyalty, retention, and lifetime value.
- Operational Efficiency: Predictability in demand allows for better inventory management, reducing waste, and optimizing resource utilization.
- Valuable Data Collection: Restaurants can gather detailed customer data through subscriptions, giving them valuable insights into consumer behavior. This can help with personalizing offerings and tailoring services and menus to meet customer preferences more effectively.
- Resilience: Particularly in times of uncertainty, like the COVID-19 pandemic, restaurant subscription models can provide a crucial lifeline by maintaining customer engagement and income.
Best Examples of Restaurant Subscriptions
1. Panera Bread
Panera Bread stands out as a trailblazer in fast-casual restaurant subscriptions with its "MyPanera+ Coffee" subscription. Launched in March 2020, this innovative program offered unlimited coffee for an $8.99 monthly fee and quickly garnered significant industry attention. In just six months, it attracted nearly 500,000 paid subscribers, underscoring the strong customer demand for restaurant subscriptions.
In 2021, it was noted that subscribers visited Panera Bread eight times more per month than non-subscribers, indicating a substantial increase in customer engagement. Panera then expanded this successful model to create their “Unlimited Sip Club”, including an annual membership option and added benefits. Sip Club members get $0 delivery on digital orders placed exclusively through Panera's own channels—a strategic move to gather more customer data instead of relying on third-party aggregators.
These enhancements have significantly increased the program’s appeal, with members of the Unlimited Sip Club now accounting for roughly 25% of Panera's transactions. Moreover, this initiative has been a key driver in growing the brand’s loyalty program, which currently boasts over 48 million members.
2. Taco Bell
Taco Bell made waves in early 2022 by launching the "Taco Lover's Pass," a subscription service that allowed customers to enjoy one free taco daily a month for just $10. The subscription covered a range of tacos, including soft tacos, spicy potato soft tacos, crunchy tacos, and Doritos tacos.
This unique offer was exclusive to reward program members who use the Taco Bell app. Subscribing unlocked a special section in the app, enabling customers to easily add a taco to their cart during checkout.
The strategy behind it was twofold: firstly, to attract customers with a free taco in the hopes of boosting their total order value, and secondly, to gather insights into ordering patterns for more targeted and personalized marketing. Its effectiveness was proven during its test run in Tucson, Arizona, where Taco Bell witnessed a 20% increase in its rewards program memberships.
The Taco Lover’s Pass went down so well that Taco Bell expanded its subscription concept to another popular menu item with the introduction of the "Nacho Fries Lover’s Pass." Priced at $10 for Rewards members, this new pass offered a regular order of Nacho Fries every day for 30 consecutive days.
Taco Bell's commitment to innovative customer engagement is evident. “We're committed to pushing the boundaries of convenience and innovation for our biggest fans, our loyalty members. The Nacho Fries Lover’s Pass is just one example of how we’re leveraging digital technology to enhance their experience,” said Dane Mathews, Taco Bell’s Chief Digital Officer.
David Gibbs, CEO of Yum Brands, also highlighted the strategic value of such initiatives: “At Taco Bell U.S., we continue to experiment with new and innovative ways to engage with our consumers through LTO programs such as the Taco Lover's Pass which helped fuel growth in loyalty memberships during the quarter and which drove customer frequency.”
3. PF Chang
PF Chang revolutionized fast-casual restaurant subscriptions by introducing the Platinum Rewards tier to its existing free loyalty program. For a monthly fee of $6.99, this paid subscription offers exclusive perks, aiming to provide added value for frequent diners.
Introduced at the end of 2020, their subscription tier was part of PF Chang's strategy to re-engage guests post-pandemic. Through customer surveys, the chain discovered that faster point accumulation was a high priority for their guests. Consequently, the free Gold loyalty tier now offers fewer benefits, with members earning 10 points for every $1 spent (2,000 points equal a $15 food credit). In contrast, Platinum members earn 15 points per dollar, along with enjoying benefits like unlimited free delivery on orders placed through PF Chang's website or app.
The Platinum tier doesn't just stop at points and delivery perks. When dining in, members get priority on the waitlist and access to a dedicated “VIP concierge” for assistance via phone or email. The subscription is seamlessly integrated with PF Chang's host stand and reservation systems, allowing staff to offer personalized service, such as greeting members by name and seating them at preferred tables.
PF Chang’s decision to set the subscription fee at $6.99, despite findings that customers were willing to pay more, was strategic to encourage wider adoption. This approach has positioned PF Chang as a leader in restaurant subscription models.
4. Subway
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Subway made a splash in the fast-food industry by introducing the first month-long sandwich subscription, the Footlong Pass. Passholders received an exclusive 50% discount on Subway's classic footlong sandwiches, valid once per day throughout selected months. The $15 pass is offered periodically to MyWay Rewards members as part of an ongoing strategy to enhance customer loyalty and mark its territory in the competitive fast-food subscription arena.
Accessible via the Subway App or Subway.com, the subscription feature is seamlessly integrated into Subway's digital platforms for easy discount redemption. The pass was a resounding success, selling out its initial 250,000 passes in just six hours.
Subscriptions for Local Restaurants
If all this talk about discounts has you ready to hop on the subscription train, then you’re in luck — the Craver Membership feature has officially arrived!
Our Membership feature allows you to customize everything about your subscription, crafting your offer in a way that works for you and your customers.
Here’s what you can expect with Craver’s Membership feature:
- Benefits Beyond Bucks: With Craver, you can expand your benefits beyond monetary discounts, offering unique, exclusive experiences while building a more meaningful (and less transactional) relationship with your community.
- Personalized Perks: Whether your customers love consistent savings or they prefer one-off free items, Craver lets you personalize your membership perks. After all, you know your customers better than anyone else!
- Custom Constraints: Want to put a limit on “unlimited,” or switch to monthly membership fees? No problem! Craver lets you customize your membership constraints to make sure it works for you, too.
Curious what a Craver Membership could look like for your restaurant?
We were hoping you’d ask! Book your free demo and we’d be happy to show you.
Wrap Up
For casual, sit-down restaurants where diners typically visit only two to three times a year, customer loyalty is crucial. Even a slight increase in guest frequency can have a significant impact on revenue. If you can get someone to visit twice a year instead of just once, you can double your money from that customer. Restaurant subscriptions are a new and innovative way to make your restaurant more appealing and build stronger relationships with your customers.
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