Everyone’s talking about Panera Bread‘s new coffee subscription. I’m not sure it’s unprecedented as reported here in the Business Insider, since Burger King Corporation announced a $5 coffee subscription last fall. And several convenience stores including Cumberland Farms, have coffee subscriptions as well.
They’re all onto something–driving loyalty by changing behavior.
In the war for “breakfast” coffee leads the charge, and coffee is something people drink every morning. By making it available as part of a subscription, these chains are nudging people to change where they get the morning beverage that they already enjoy on a regular basis.
I don’t think that they expect to generate incremental profit on this subscription. It may be marginally profitable, and will certainly drive incremental revenue. But these subscriptions are great examples of a subscription as a marketing tool. They hope that subscribers will buy a breakfast sandwich or fill their tank along with their coffee. Maybe these subscribers will even serve as a source of new customers, dragging their family and friends along when they pick up their “free” coffee.
Even if it doesn’t drive incremental revenue, the subscription is a way to stay “front of mind” with these subscribers, and provides something new and interesting to talk about in ad campaigns.
This is a great example of a subscription as a marketing (vs sales) tool, bringing people into the store. In some ways, this is the hospitality world’s version of an Amazon Prime or Costco Wholesale Membership. These “premium memberships” serve as a means of getting consumers to commit up front to deeper engagement with the retailer.
Premium Memberships are definitely an emerging trend for all of retail, and not just fast/quickserve food. Restoration Hardware, CVS and GameStop also have introduced programs in which members pay for access to a bundle of benefits when they shop.
There’s a premium loyalty program that could work for just about any retail/hospitality/restaurant that would serve to drive visits and revenue.
What could other food places do to make this work? Free soda at happy hour? Free popcorn at movies with full price tickets? What’s your favorite premium loyalty program?
