Subscriptions provide customers with a regular service for a regular payment. Customers benefit from convenience and merchants benefit from the recurring, predictable income. What’s more, subscription services often provide new streams of income.
Subscription services have long been used in certain industries. Now, more industries are looking for ways to implement them. So here is a guide on how to set up subscriptions at your restaurant.
What is a subscription service?
Most subscription services fall somewhere within three main categories. These are curation, replenishment and access. A curation subscription service is where the provider chooses products for the recipient based on their taste. In the case of a restaurant subscription, that could mean anything from ingredients to meal boxes.
A replenishment subscription service is where the customer gets a guaranteed supply of a certain product or service. The publishing industry has used these for decades and they are now being used for a huge range of consumables. A restaurant subscription model could provide subscribers with restaurant vouchers.
An access subscription service is where the customer gets access to special goods or services. It tends to be more commonly used for services but could be used for products. For example, it could give customers the option to buy limited editions of products.
Benefit of subscription services for restaurants
Restaurant subscriptions offer multiple benefits. Here are three of the main ones:
For most restaurants, probably the single biggest benefit of subscription services is the chance to diversify their revenue streams. The importance of diversification was recognised long before the pandemic. However, Covid-19 underlined its importance, particularly for businesses like restaurants.
Before the pandemic, they were almost exclusively focused on real-world services. Dining in and takeaways/deliveries are probably always going to be the mainstays of the food and beverage sector but diversification could offer a significant level of protection against changes.
More consistent revenue and expenses
The food and beverage industry is notorious for its highs and lows. These are both seasonal (e.g. Christmas/New Year) and short-term (e.g. meal times versus off-peak times). This can make it tricky to manage cash flow and inventory.
A subscription service tends to be much more consistent and predictable, so it could be a useful stream of revenue during low times. It’s also relatively easy to manage the related inventory; a restaurant subscription service could be a way of using up excess inventory from other parts of the business.
An opportunity to develop stronger customer relationships
Meals out are mainly discretionary purchases, with the purchaser choosing between many different places to spend their money. It, therefore, makes sense to develop as close a relationship as possible with the customer. A restaurant subscription is one way of doing this.
Top subscription ideas for restaurants
There are numerous options for restaurant subscription services. Below are three that stand out:
The most obvious choice here is the meal box, which is very popular for good reason. There are many meal subscription boxes on the market, but still plenty of space for new entrants. Have a clear point of differentiation from what’s already on the market, by focusing on a USP, niche audience or cuisine.
While it makes sense to offer a food-related subscription box, it doesn’t have to be a meal box – it could be a box of produce, ready-made food products or kitchen items.
Taking a spin on a regular loyalty programme, the key to making the restaurant voucher work is to ensure that it offers value without compromising other areas of the business. Ensure that any other special offers you run do not devalue your subscription offering.
This may be one of the most exciting new revenue streams for restaurants. For decades, cookery and food shows have been staples on TV and radio and are popular enough topics to warrant taking up space on different platforms. Now, thanks to the internet, you can create branded content and sell access to it on a subscription basis.
How a restaurant subscription works with Square
You can take subscription payments via your standard restaurant POS, but one of the main benefits of subscriptions is that they can be managed without the customer needing to be there.
Getting started with Square subscriptions
To get started with restaurant subscriptions, log into your Square Dashboard and go to Payments > Subscriptions > Plans. Click on Create plan, enter the details of your first plan and click Save. You can have as many as you wish.
Following that, go to the Customers field and either add existing customers or create new ones. If you choose existing customers, their details will automatically load. If you enter new customers, you will be prompted to enter their details.
Once your plans are up and running, Square Subscriptions take care of managing the payments. You can update the details of your plans or customers at any time. It’s easy to pause subscriptions either indefinitely or for several billing cycles if required.
How to promote your restaurant subscriptions services
Once you’ve created a compelling restaurant subscription offering, let people know about it; email marketing is still one of the most effective marketing tools there is. Using Square Marketingcan boost the effectiveness of your email marketing campaigns.
It’s also important to make the most of everything social media has to offer. Major platforms such as Instagram, TikTok and YouTube all support short-form videos in portrait format. That means the content of your subscriptions-based restaurant can be created on your phone and showcased across all channels.