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Loyalty programs that add to the bottom line

If there’s one thing businesses can bet on, it’s their customers who want to feel special. Subscription/membership programs fill that need – providing benefits, access and a sense of belonging for the diner. For the operator, they help build the restaurant’s brand while providing another source of revenue.

While the concept is not new, it’s ever-changing, reflective of the shifting culture of the pandemic-influenced landscape. Daniel Azarkman, owner of San Francisco-based El Lopo, says the move toward his current subscription model has been “definitely fueled by the pandemic,” the likes of which have morphed from a distanced revenue-making program into a more contemporary dine-in membership.

Today’s subscription programs typically offer a range of amenities. For example, a wine tasting-led membership may go beyond its selling point and offer a delivery, personalization or gifting option – as well as the opportunity for a tasting class, bringing in new tiers to their service and varying revenue. Here, five restaurants provide a snapshot of the subscription program they’ve integrated into their business strategies.

arrowTAKEOUT

Soul & Smoke, Evanston, Illinois

HOW IT WORKS
Run through Table 22, the restaurant’s Meat of the Month subscription program offers a monthly, fully prepared meal for takeout – but only for subscribers. All a member has to do is heat it up at home.

SUCCESSFUL?
“The program keeps growing every month,” says co-owner Heather Bublick, adding that it has become a solid source of revenue. Table 22 is easy to use and helps with controlling inventory and costs, she says. “We get the orders well in advance for ordering and prep, so it’s easy to plan for our kitchen.”

BOTTOM LINE
Chef d’Andre Carter can get more creative, which leads to a more satisfying experience for customers.

arrowMEAL KIT

Monteverde, Chicago

HOW IT WORKS 
Subscribers to Pasta & Provisions receive a monthly easy-to-make pasta kit, fit with an ever-changing pasta, sauce and select provisions, such as oils, spices and cheeses, from the restaurant’s favorite purveyors. Tips on using the products and notes from staff about the ingredients are also included. The restaurant also offers a wine program of curated bottles and personalized notes. Delivery and pickup are offered.

SUCCESSFUL?
The subscription has reeled in over 100 members within the first few months.

BOTTOM LINE
Monteverde partner Rob Mosher is cautiously optimistic because of labor challenges. Saying “the jury is still out,” Mosher cites challenges like returning to normal service, regulating staff levels and continuing to-go/delivery services while maintaining Monteverde’s level of quality. “It’s a bandwidth question. Will there continue to be enough time, space and staff in the existing restaurant space to get back to what we’ve always done (pre-pandemic) and add on incremental new business?”

arrowWINE CLUB OR COCKTAILS

Salt Collective, San Francisco (Restaurant group includes Dominique Crenn’s concepts, Humphry Slocombe ice cream shops and Lazy Susan)

HOW IT WORKS
For $120 per month, subscribers can choose between the Wine Collective (four bottles of wine) or the ABV collective (two bottles of wine, a batched cocktail and either cider, sake or similar bottled libation). Subscribers can also choose between monthly, bimonthly or quarterly memberships. Monthly Zoom tastings hosted by experts, such as sommeliers, bartenders and winemakers, are also offered.

SUCCESSFUL?
Despite modest goals, the program has been a success, considering the “fun monthly get-together exploring great labels of attractively priced wine,” says Hanson Li, founder of Salt Partners Group.

BOTTOM LINE
Timing can be everything. Salt Collective established the program at the height of the Delta variant emerging. “Salt Collective as a subscription program was a timely offering at a time when a lot of customers were mostly staying home again,” says Li. “The monthly cadence gave us some certainty of sales and cash flow.”

arrowEVENTS/COOKING CLASSES

Vimala’s Curryblossom Café, Chapel Hill, North Carolina

HOW IT WORKS
Inspired by pre-pandemic in-person cooking classes, a virtual online course is offered monthly. Recipes and ingredient kits that include potentially hard-to-locate Indian spices and herbs accompany the course, making the program highly accessible. Alternatively, subscribers may opt for a fully prepared takeout meal each month.

SUCCESSFUL?
“It’s been very well-received and has given us a big chunk of revenue each month,” says executive chef Vimala Rajendran. “It also provided some needed extra hours for many of our employees.” The restaurant fulfills around 100 member subscriptions each month, creating as much revenue in one week as several of their major catering jobs.

BOTTOM LINE
Despite its success, the program is labor-intensive, but Rajendran still plans on growth. Rajendran has hopes to continue the program by expanding the menu for the cooking courses and by marketing to a larger audience. “We would love to be able to make these lessons available to people worldwide.”

arrowDINE-IN

El Lopo, San Francisco

HOW IT WORKS
Subscribers to the restaurant’s Take Care of Me Club choose between two tiers, paying $89 per month for a redeemable $100 food and beverage credit and $175 per month for a $200 credit redeemable in-house. Based on an ongoing, personalized record of each members’ palate, staff at El Lopo craft dishes and drinks specific to each subscriber.

SUCCESSFUL?
The restaurant would like more than its current 25 members but believes it has built loyalty. They dine in more, some as often as three times a week. Most of the time, they exceed their monthly credits.

BOTTOM LINE
Beyond the expected perks, other benefits include gifting free drinks to other guests, ordering glasses of wine from the strictly curated bottle list and guaranteed seating. Azarkman has high hopes for programs, citing financial stability as a main catalyst for his vision. “I would love to see subscription programs normalized,” he says. “Hospitality businesses are bogged down by unpredictable sales volume. Having a substantial portion of our revenue come through subscriptions would make a huge difference.”  


HOW TO START

Third-party partners can make subscription programs simpler than launching your own. Resources
such as Table 22, Third Place and Summerlong Supper Club work closely with restaurants to customize, accounting for personalized plans that increase exposure and diversify revenue streams. Don’t forget that you’ll need ways to broadcast such efforts, such as a robust social media presence, a strong website and a solid email marketing list.