With so many different products and services on offer these days, it can be difficult for companies to convince customers to purchase a product more than once. And since repeat business is the lifeblood of any enterprise, many firms have turned to subscription models to ensure that they receive steady sources of revenue. Streaming platforms like Netflix and Disney+ stand out as some of the most recognizable subscription services, while brands like Peloton adopted this model for the home fitness sector.
Although a number of snack brands also offer to ship collections of treats for monthly fees, restaurants have largely stayed out of the subscription game so far. Eateries often have trouble integrating these promotions with their day-to-day operations, sometimes resulting in meal deals that cost the company money. Despite these risks, though, last week Taco Bell announced its entrance into the subscription economy with the Taco Lover’s Pass on its mobile app. For ten dollars per month, members can receive one taco per day over the course of 30 consecutive days. Along with its classic crunchy and soft tacos, customers can also choose from specialty styles like the Doritos Locos Taco.
Taco Bell first tested the concept in September 2021 in Tucson, Arizona, where use of its mobile app rewards program grew by 20 percent as a result of the promotion. Getting customers onto the app is the central strategy of the Taco Lover’s Pass as the company hopes to convince people to buy more items in addition to their included taco. These purchases will then earn points in Taco Bell’s loyalty program which will likely lead to even more business down the line. Other restaurant chains have also started to follow this strategy, with Panera Bread offering customers a free cup of coffee every day for $8.99 per month.
Questions:
- Why do you think restaurants are sometimes hesitant to offer subscription deals to customers?
- What is Taco Bell’s ultimate goal for its taco subscription service?
Source: Jordan Valinsky, “Taco Bell Is Selling a $10 Monthly Taco Subscription,” CNN, January 7, 2022.