Today’s market is brimming with subscription-based services, from streaming platforms to delivery boxes. With the digital world evolution, consumers are increasingly accustomed to subscribing to their preferred products and services. As such, it’s not surprising to see a rising interest in bar and restaurant memberships. But, is this trend a fleeting phenomenon or a lasting paradigm shift? And most importantly, is it something you should be considering?
Understanding Bar and Restaurant Memberships
A restaurant membership, often referred to as a restaurant subscription, provides patrons with the option of “signing up” for their favorite eatery. These memberships usually entail a recurring fee – monthly, quarterly, or yearly – and in return, guests are granted access to specific goods or experiences.
One example is that of an upscale city restaurant who invites guests to subscribe, charging a fixed monthly fee. In exchange, the subscribers receive a four-course dinner for two every month, at their convenience. This arrangement benefits both parties. Members can enjoy meals prepaid and typically at a discount, while the restaurant gains a steady, recurring income.
It is notable that a growing demand for restaurant memberships, particularly among millennials and gen Z, was highlighted in a National Restaurant Association survey, which reported that 55% of adults expressed interest in restaurant subscriptions, with a higher inclination among younger demographics.
Advantages of Memberships for Bars and Restaurants
Thinking of implementing a membership program for your concept? Here are some distinct advantages to consider.
Loyalty
Large chains like P.F. Chang’s cite brand loyalty as a major benefit to their increasingly popular Platinum Rewards paid subscription program. By offering perks like free delivery, VIP-level priority reservations, and discounted items, the organization has reported steady increases in engagement both in-house and through delivery platforms.
Given that retaining existing guests is generally more cost-effective than acquiring new ones, memberships can ensure repeat visits to your restaurants, allowing you to put your precious marketing dollars to better use. Members also often bring friends and family members along for the ride, providing the added benefit of introducing new guests to your brand.
Recurring Revenue
With so many fluctuations in business patterns, such as weather, slower day-parts, and seasonality, memberships can offer a steady and reliable source of revenue usually reserved for other industries.
Panera’s Unlimited Sip Club offers free hot and cold beverages for a monthly fee of $11.99. Members who pay annually will also receive free delivery throughout the membership period.
Eduardo Luz, Panera’s chief brand officer, says that members now make up an impressive 25 percent of the brand’s transactions, with indications that this number will continue to grow.
Current Trends
What should not be discounted is the current trendiness of subscriptions and the consumer’s desire to interact with businesses of all kinds in this way. It is natural for the bar and restaurant industry to want to take advantage of this trend and even the smaller, neighborhood businesses are catching on.
El Lopo, a casual neighborhood bar in San Francisco, offers their Take-Care-Of-Me Club, where members pay $89 per month for $100 worth of dining credits, with unused credits rolling over each month. Along with a higher-tiered offer, El Lopo has an at-home tasting club for $44 per month where members will receive a curated wine and snack box for pick up or delivery (an additional $7 delivery fee is applied). Owner Daniel Azarkman began the club as the pandemic eased as a way to encourage guests to return. He now has restaurants all over the country inquiring as to how they can launch similar programs for their establishments.
Not All Subscription Services Have Tasted Success
It is important to understand when determining whether or not to launch a membership or subscription program that there have been some failures as well. In 2021, On the Border Mexican Grill launched is Queso Club promising free cheese dip for an entire year for $1. After just one year, the organization discontinued the program.
On the Border’s Chief Marketing Officer Edithann Ramey revealed that while over 150,000 guests had registered for the Club, with members making visits seven times more monthly than compared to the average guest, the revenue generated by the chain was not sufficient to offset the cost of the dip, leading to the Club’s demise.
On the Border has since launched a new tiered rewards program, offering greater benefits to Gold-Tier members who spend over $250 annually, with their ever-popular queso as a prime component of the discounts offered.
Similarly, Taco Bell canned its $10 per month Taco Lover’s Pass, which offered a free taco per day for active subscribers. While the company is reported to be working on re-launching some version of the deal, Taco Bell's Chief Digital Officer Dane Matthews stated that the company is looking for ways to add more value to the program to better ensure its success.
Are Memberships Right for Your Bar or Restaurant?
Before going all in on creating a membership for your establishment, here are some things you may want to consider first:
1. Do you have established, loyal guests?
While having a membership or subscription service can increase loyalty, it is greatly beneficial to have somewhat of an already established base to market to initially. It is also helpful to understand what type of value will best drive your engagement, so either polling your existing guests or expanding upon what is already working can really set you up for success.
2. Can you offer an appealing product or service for your subscription?
The membership offering must be universally appealing. Rather than just throwing out a free appetizer, it is important to think about what will actually motivate your guests and represent incredible value for them. Understanding this will mean the difference between a lackluster program and one that actually drives results.
3. Do the numbers work?
The membership should never lead to more loss than gain. Restaurants must carefully calculate the cost and profits associated with the membership offerings or they may find themselves having created something that is not sustainable.
4. Do you have the resources to manage subscriptions?
Establishing a membership program requires either advanced technology or substantial manpower to maintain it. One must also factor in the associated marketing efforts in the capability to fulfill the promised products or services.
If these queries yield positive responses, your bar or restaurant stands a good chance of successfully implementing a membership program.
The Bottom Line
Whether this trend will solidify into an industry standard remains to be seen, but it is undeniable that, in the right circumstances, restaurant memberships can provide a mutually beneficial arrangement for both restaurateurs and their loyal patrons. With proper planning, the right offer, and the ability to execute, you may indeed find success!
Plan to Attend or Participate in the 2024 Vibe Conference, February 26 – February 28, 2024
To learn more about the latest trends, issues and hot topics, and to experience and taste the best products within the on-premise beverage community, plan to attend the Vibe Conference at Town & Country in San Diego, California. Visit VibeConference.com.
Contact us now to secure your program for 2024:
Donna Bruns, Sales & Sponsorships, (for companies A-L), Email: [email protected] Phone: 936-522-6932
Fadi Alsayegh, Sales & Sponsorships, (for companies M-Z), Email: [email protected] Phone: 440-454-0239
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