Operations

How subscription services, loyalty programs encourage repeat business

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September 27, 2022

It's been a rough two-and-a-half years for the restaurant industry since the onslaught of the COVID-19 pandemic. Still, there are ways to increase business and encourage repeat guests through the use of loyalty and subscription programs designed to encourage repeat business and build a solid customer base. TapMango sponsored a webinar titled "Innovative Ways Loyalty Programs Can Increase Sales for Your Restaurant" hosted by Fastcasual.com. The webinar looked at several ways restaurants can thrive during uncertain economic times, especially through the use of innovative programs.

Teaching viewers how to thrive was Jessica Lusthouse, head of sales for TapMango. Lusthouse said: "Today's environment is a little bit different. It made us become more innovative than ever before because we have to focus on things like price stability (and) financial prudence while still being the best eatery we know how to be."

This mind shift started almost three years ago with the onset of the pandemic, and TapMango's features have needed to double down on increasing the revenue of restaurants even during these massive adversities like supply chain shortages and labor issues, Lusthouse added.

Restaurants worry about increasing prices or decreasing portion sizes and upsetting guests is a prime concern. Customers, however, are also facing price increases at the grocery and gas pumps. One idea is to form a pact with your customer by giving stability, controlling process and offering quality products with small discounts in exchange for long-term business and a guaranteed stream of revenue.

How do we do this?

First, paid subscription models like Panera Bread's Unlimited Sip Club encourages guests to pay a monthly fee of $10.99 for unlimited lemonades, coffee, tea and other beverages. The brand gets the money up front, and customers gets freebies and discounts throughout the month.

"The reason customers are flocking towards this model is that they're looking for stability right now," Lusthouse said. Brands "have been loving the guaranteed recurring revenue from this model and if you look at places like Costco, they expect billions of dollars of revenue per year just from their membership fees. Eateries are now relying on getting something like $10, $20, $30,000 per month from these subscription models and the customers are relying on these savings, so it's a win-win relationship."

A second trend has been encouraging customers to place and order with the customers directly rather than through third-party delivery companies who's charging you 20% to 30% of the revenue.

A third trend is developing a third wave of loyalty. What used to entail a punch card evolved into a digitized version of this.

"Loyalty should be about changing consumer behavior in exchange for growing your business," Lusthouse said.

To learn how to effectively manage these three trends, watch the entire webinar for free here.