Can Subscription Models Benefit Restaurants and Guests?

Restaurant loyalty programs are nothing new so what can restaurants do to stand out from the competition and better engage with guests to build relationships? Many are trying out subscription models to see if they can benefit restaurants and guests.

To learn more about how loyalty programs are evolving, Modern Restaurant Management (MRM) magazine reached out to Joseph Yetter, the General Manager of Punchh, a PAR Technology Company. Prior to his role as General Manager, he was CGO (Chief Growth Officer), General Manager, Vice President, and Chief of Staff, where he spearheaded projects including the acquisition of Punchh, company integrations, executive recruiting, and has established PAR’s KPI setting and tracking process through business reviews. Prior to joining PAR, Yetter worked at Restaurant Brands International, overseeing Franchisee Operations for Burger King Restaurants in multiple global regions. 

How and why are loyalty programs evolving?

Loyalty programs are made to cater to customers’ ever-changing needs and expectations. Brands are now seeking creative ways to engage customers in more personalized and unique ways. Subscription models have emerged as a remarkable addition to the customer engagement toolbox, providing alluring benefits, convenience and tailored experiences. These subscription loyalty programs tap into the full potential of customer loyalty, resulting in increased engagement, heightened satisfaction and overall success. 

The need for more personalized and technology-driven experiences drives the constant evolution of loyalty programs.

The need for more personalized and technology-driven experiences drives the constant evolution of loyalty programs. Brands now leverage data analytics and AI to better understand customer preferences and deliver tailored rewards and offers. Instead of generic discounts, loyalty programs focus on providing experiential benefits, exclusive access to products or services and personalized incentives that resonate with individual customers.

Moreover, loyalty programs are seamlessly integrated into digital platforms, including mobile apps and online ordering systems, to enhance the customer experience and make participation more convenient. This evolution allows brands to build stronger emotional connections with their customers and foster lasting loyalty, even amid economic uncertainty.

What are best practices for examining a loyalty program and know if it’s working?

To assess the effectiveness of a loyalty program, brands should consider the following best practices:

  • Proactively educate customers about the exciting benefits, emphasizing cost savings and unmatched convenience.
  • Embrace cutting-edge technology to create seamless subscription experiences and craft compelling marketing campaigns that attract and retain loyal subscribers.
  • Analyze demand patterns to optimize inventory and staffing, ensuring flawless execution, even during peak orders.
  • Craft a sustainable and appealing pricing structure that appeals to customers and ensures long-term viability for the business.

By implementing these strategies, brands can continuously improve their loyalty programs, fostering deeper customer connections and driving long-lasting engagement and loyalty.

What are examples of how a subscription model can work for restaurants? Are they easy to implement?

Restaurant subscription models offer customers a wide range of exclusive services and products through convenient recurring fees, creating an enticing array of benefits and conveniences. These subscription programs go beyond traditional discounts and create an emotional, exclusive draw for customers, fostering a sense of value and appreciation. Blending savings with added conveniences strengthens loyalty, and customers eagerly join these programs. Moreover, subscription models provide:

  • Valuable user data.
  • Personalized dining experiences tailored to individual preferences.
  • Deeper connections with customers, driving their willingness to invest more in enhanced experiences.

Brands are experimenting with various successful subscription models, such as unlimited items, meal kits, delivery and dining subscriptions. Established brands like Olive Garden, McAlister’s and RaceTrac have seen impressive results with subscription programs, such as increased customer spending and loyalty. With their ability to offer exclusive experiences and personalized benefits, restaurant subscription models are becoming a must-have for all brands seeking to engage and satisfy their customers effectively.

If done correctly, subscription models can enhance customer loyalty, operational efficiency and data-driven decision-making.

However, implementing a subscription model can be challenging. Restaurants need to effectively communicate the benefits of their subscription programs to customers and adopt the right technology. But if done correctly, subscription models can enhance customer loyalty, operational efficiency and data-driven decision-making.

With the right strategies and support from industry-focused technology providers, restaurants can gain a competitive advantage in the dynamic restaurant industry.

What are advantages of subscription models?

Subscription models provide guests with exclusive rewards and personalized experiences, leading to higher engagement and increased customer satisfaction. These models effectively boost customer loyalty by offering recurring payments and ongoing access to desired products or services. Furthermore, using membership tiers and personalized campaign engagement drives higher purchase frequency. The data collected through subscription models also allows for better market segmentation, making sales and costs more predictable and ensuring a reliable revenue stream for the business.

What are guest responses to subscriptions?

Guest responses to subscriptions have been exceptionally positive, highlighting the effectiveness of loyalty programs in driving customer engagement and spending. C+R Research’s survey results reveal that customers who participate in subscription programs spend more than 2.5 times what they initially anticipated. This significant increase in spending demonstrates the value customers place on the enticing benefits, convenience and personalized experiences offered by subscription loyalty programs. Moreover, 86 percent of buyers have expressed willingness to invest more in enhanced experiences, underscoring their appreciation for subscription models’ emotional draw and exclusive nature. This favorable feedback further emphasizes the effectiveness of subscription programs in strengthening the bond of loyalty and providing guests with a sense of being valued and appreciated.

How can loyalty and subscription programs work together to engage guests?

Loyalty and subscription programs can synergistically create a multi-faceted and engaging guest experience. When integrated, loyalty programs can enrich subscription models by offering subscribers distinctive incentives and personalized deals tailored to their loyalty status. 

Combining data from both programs empowers brands to craft targeted marketing campaigns that resonate with individual preferences, further elevating the overall customer experience. Moreover, subscription programs drive customer retention, strengthen loyalty and foster emotional connections between guests and the brand, leading to sustained patronage. 

By harnessing the powers of loyalty and subscription programs together, restaurants can create a comprehensive and immersive experience that sets them apart in a competitive landscape and fosters lasting customer relationships built on trust and appreciation.

Modern Restaurant Management
Author: Barbara Castiglia