Consider all of the conveniences that are available to modern consumers. They can wake up, make coffee with beans that were delivered in one day through Amazon Prime, shave with a razor from Dollar Shave Club, and get dressed in an outfit that was delivered in this month’s Stitch Fix box. As they ride to work in a prepaid Uber, they can browse articles on their phone courtesy of an online subscription to their favorite newspaper. After returning home, they can make dinner from a Blue Apron kit while listening to commercial-free music via a Spotify premium account, and then take a spin class as part of their ClassPass subscription.
As consumers, we’ve become used to subscription-based services in every aspect of our daily lives. The subscription business model has grown rapidly, increasing sales from $57 million in 2011 to $2.6 billion in 2016. Throughout the restaurant industry, several brands have successfully introduced subscription-based meals, with Olive Garden’s Never Ending Pasta Pass being a prime example. A limited number of guests could spend $100 for an eight-week pass or $300 for a full year, entitling them to unlimited servings of pasta, soup, salad, and breadsticks.
Since customers are accustomed to paying for subscriptions, more restaurants are offering subscription-styled packages. While some emulate Olive Garden in requiring guests to pay a lump sum for unlimited benefits, others, such as HuHot Mongolian Grill, have given guests the option to buy meal passes in quantities of 5, 10, or 20. There has also been an emergence of third parties like MealPal, a service that allows customers in major metropolitan areas to buy 12 or 20 prepaid lunches and redeem them at any of its participating locations.
Here are the three primary reasons why you should consider a subscription plan for your restaurant:
- Repeat Customers: When guests purchase a package of prepaid meals, it guarantees return visits to your restaurant instead of the competition. Guests who buy their meals in advance are going to make sure their money doesn’t go to waste.
- Sales: When you sell a 10-meal package, the profit is realized immediately rather than over the course of someone’s next several visits. When these guests return, they can often be enticed to buy add-on items because they tend to forget about the initial cost and will be spending very little on that day.
- Loyalty: These multi-meal passes can be integrated with your restaurant loyalty program, letting guests continue to earn points and allowing you to gain valuable insights from changes in behavior.
Introducing a subscription meal plan is just one way to boost return visits and build strong relationships with your guests. For more information on making a subscription part of your restaurant’s strategy, check out our webinar, “How Restaurants Can Take Advantage of the Subscription Business Model”