Subscription | KRG Hospitality

November 22, 2023by David Klemt David Klemt No Comments

Taco Bell Leveraging Subscriptions & LTOs

Taco Bell Leveraging Subscriptions & LTOs

by David Klemt

Not for the first time, Taco Bell is showing the industry the power of offering fan-favorite limited-time offers and leveraging subscriptions.

These days, everything seems to be subscription-based. We stream shows and movies via subscriptions. We can have food, clothing, gadgets, collectibles, and knick-knacks delivered to us by subcription.

Car features like heated seats, remote engine start, and self-driving? Subscriptions. Want to use software we used to buy once and install? Now we’re paying monthly to use it (or up front for a “discounted” yearly fee).

So, why should people find it odd to subscribe to one of their favorite restaurants? If the value is there for a consumer it’s no different than paying a monthly fee for other products and services to which they subscribe.

Clearly, Taco Bell has an acute understanding of people’s comfort with subscriptions. For many consumers, they’re the norm, just part of their daily routine.

As evidence, I introduce Exibit A, the Taco Lover’s Pass.

What makes this subscription noteworthy is the fact that it’s only a few years old, and it’s not even a permanent subscription. As Taco Bell Rewards members know all too well, only they can cop a Taco Lover’s Pass, and it only comes available every so often.

Most times, members have just one day to grab a pass. However, people had two whole days to decide the last time it became available.

And now, Exhibit B, the Nacho Fries Lover’s Pass.

An LTO Subscription and Item

Look, tens of millions of people love tacos. So, it’s logical that the Taco Lover’s Pass is so successful.

And if the past several years have shown us anything, millions of people also love Nacho Fries. The LTO menu item first appeared in Taco Bell restaurants in 2018. A few years later, in 2021, the Taco Lover’s Pass was tested in Arizona.

Why wouldn’t we eventually see a Nacho Fries Lover’s Pass, given the hype that follows every reintroduction of this popular item? Taco Bell has mastered the art of the LTO and the subscription. More specifically, they’ve mastered the recurring subscription. Remember, their passes aren’t permanent offerings.

Further, the iconic QSR also understands the power of the “drop.” At this point, it seems as though Taco Bell has noticed the rabid stir a limited-edition shoe or clothing drop can create for the fashion industry, studied it, and adapted it to foodservice.

With that said, the last Taco Lover’s Pass was accompanied by a menu item drop: the Toasted Breakfast Taco. If you think the Nacho Fries Lover’s Pass also ushered in an LTO, you’re correct.

The first-ever Nacho Fries Lover’s Pass comes along with the limited-time-only offer of Grilled Cheese Nacho Fries.

Take the Nacho Fries, slather them in a sauce of melted mozzarella, monterey pepper jack, and cheddar cheeses, add Taco Bell nacho cheese and chipotle sauce, and toss on some marinated steak. There you go—Grilled Cheese Nacho Fries. They’re just $4.99 while supplies last, and there’s a spicy version made with jalapeños.

It’s no surprise that Taco Bell is BrandVue’s most-loved Mexican restaurant brand, and number eight on their overall list of most-loved restaurant brands.

Takeaway

Loyalty and rewards programs, subscription services, hyped LTO menu drops… These aren’t the exclusive domain of global chain restaurants.

Independent operators can absolutely leverage LTOs and subscriptions. Moreover, indies can do so with as much—if not more—specificity. Independent and regional chain operators tend to be far more nimble than their large chain counterparts.

After all, it’s much easier to implement change in one or a handful of restaurants than it is hundreds or thousands of locations. In theory, single-unit operators also know their loyal guests on a more intimate level. Where that’s the case, they should know what levers to pull to generate interest and encourage repeat visits.

It’s no small task to create a subscription program, let alone a free-to-use-but-engaging, branded rewards program. And that’s to say nothing of coming up with menu item so powerful that taking it away for months at a time is a feasible, profitable thing to do. Although, if you’ve shrunk your menu and eliminated a decent food or drink performer, you may have somewhere to start.

With time and thoughtful consideration, independent and regional operators can absolutely nail rewards, subscriptions, and LTOs.

Image: Taco Bell

September 26, 2023by David Klemt David Klemt No Comments

Time to Rethink Your Loyalty Program?

Is it Time to Rethink Your Loyalty Program?

by David Klemt

So, you have a loyalty program in place. That’s great, but is it time to review its performance and implement meaningful changes to improve engagement?

I know, I know—that feeling of “if it ain’t one thing, it’s another” never seems to go away. That’s part of operator life.

The good news is that, if you have a loyalty or rewards program and it has been working, you’re a step ahead of many other operators. In that way, it’s similar to implementing an actual onboarding process and including an employee manual.

But what should you do if you notice engagement dropping? Well, it may indicate that while there’s interest in your program, it’s getting stale. Or, perhaps people don’t like the rewards or think they’re earning rewards quickly enough.

If engagement isn’t at the levels you want or is noticeably declining, it’s time to review your program with a critical eye.

In fact, it’s a great idea to ask your team for their feedback regarding loyalty. After all, your team hears guest feedback in real time. Also, they likely have some ideas of their own that can help refresh the program. After all, some people on your team may be members of loyalty programs themselves and have some thoughts.

Engagement via Gamification

The word “gamification,” much like “pivot,” may be a word that annoys you. That doesn’t make it any less relevant.

Millions of people are on their phones nearly every waking moment of the day. And millions among those millions engage with brands and apps via games or game-like features. It keeps these people coming back for more.

One restaurant chain that understands the power of gamification is Jimmy John’s.

First, the brand’s loyalty and rewards program has an interesting name: Freaky Fast Rewards. Second, they issue challenges that drive member engagement.

For example, for Q1 2023, Jimmy John’s threw down the Gauntlet via the Freaky Fast Rewards program. Members had until the middle of March to purchase every sandwich on the menu. The reward? A branded beanbag chair that looks like a bag of Jimmy Chips.

Of course, the program engages its members in other gamified ways. There are achievement badges to earn, for instance. And there have been challenges that were narrowed down to daypart to drive traffic and engagement.

Free food and merchandise are common rewards, but there are also surprises that members can earn to keep things fresh.

Program Updates

Another brand giving their loyalty program a refresh is Domino’s.

Rather than do what some other companies have done, the pizza giant is lowering the threshold to earn rewards.

Around a year ago, Chipotle experienced significant backlash from loyalty program members when they went the other direction. In response, one would think, to rising costs, the brand increased the amount its members had to spend to earn rewards.

That went about as well with many of their customers as you’d expect, of course. Loyalty and rewards programs are meant to increase traffic and spend per guest, not alienate them and drive them away.

Enter: The Domino’s Rewards refresh.

“We are thrilled to give the brand’s loyal customers additional ways to earn free Domino’s items more often,” said Mark Messing, Domino’s vice president of digital experience and loyalty, via press release. “At a time when most brands are scaling back their loyalty programs and making it more difficult to earn and redeem points, Domino’s is doing the opposite. We want to make it easier to reward our customers and give them more options so they can get rewarded faster.”

Members can not only earn points more quickly (every $5 spent equals 10 rewards points), they can redeem more quickly as well. For example, a 16-piece Parmesan bread bites is just 20 points. Free stuffed cheesy bread is only 40 points now. And that’s to say nothing of offers that are exclusive to members.

Takeaway

Only you, of course, can know how to adjust your loyalty program. You need to look at your data to understand the best solution for waning engagement.

The last thing you should do is lower points thresholds without knowing your numbers. And if you’re considering gamifying your program, you need to know if that’s an approach your guests will actually like.

In other words, don’t rush to upgrade or update your loyalty program. Take time, collect relevant data, engage your team, and move forward with any changes with strategic clarity.

Image: Polina Tankilevitch via Pexels

December 28, 2020by David Klemt David Klemt No Comments

Make Your Restaurant Concept ABSURᗡ in 2021

Make Your Restaurant Concept ABSURᗡ in 2021

by David Klemt

Those seeking new restaurant opportunities in 2021 should give serious consideration to Absurd! Kitchen Co., KRG Hospitality’s unique turnkey QSR.

Development of the concept was motivated by the realization that operators need to continue to pivot to survive the pandemic and thrive in a post-pandemic world.

“At KRG Hospitality, we immediately pivoted in March 2020 into ‘rescue mode,’ understanding the immediate needs of so many independent operators,” says Doug Radkey, president of KRG Hospitality.

Moving forward into 2021, guests will be more concerned health, safety and their comfort than ever before. Absurd! was developed as a response to heightened guest expectations and to create a path forward for operators in the post-Covid-19 era. Not only is the concept forward-looking, it’s designed for turnkey operation.

Restaurant guests were growing accustomed to the convenience of frictionless ordering, pick-up and delivery. Lock downs, restrictions, and health and safety concerns have pushed delivery and pickup closer to the forefront of guest expectation. Absurd! leverages the latest in technology and utilizes a subscription element to reward loyalty while offering a convenient and safe QSR experience.

In the new era of restaurant operation we can expect guests to be less tolerant of waiting in lines. Multiple publications have published articles hypothesizing that the Covid-19 pandemic we lead to the end of waiting. Considering the importance of social distancing and how commonplace curbside pickup has become, it’s understandable that many guests have developed a preference for speedy, safe service.

Equally understandable is a guest wishing to keep interactions with other people to a minimum. The ability to peruse a menu via QR code or pay their bill using their own device has offered a level of comfort to guests during the pandemic. It’s logical to believe these guest habits are here to stay.

At Absurd! locations there are no traditional lines. By design, there’s no contact between guests and staff. Guests interact with a location via designated pick-up or drive-through areas. In the pick-up area, guests access food-safe storage units through their mobile devices to grab their orders. The drive-throughs only serve delivery drivers or those who have placed pre-orders. Convenient, safe, time-saving restaurant features for a post-pandemic world.

Absurd! cuisine is inspired by Southern flavors and dishes such as loaded chicken strips, fried waffle sticks, breakfast bowls, and sandwiches. There are options for the full range of dietary needs and preferences, such as dairy-free, gluten-free and vegan meat alternatives. Along with a competitive, high-quality menu, KRG Hospitality has developed a retail offerings that include branded dry spices and meal kits, leveraging another trend that has seen significant growth during the pandemic. The concept’s packaging is sustainable, and adding a food truck can expand an Absurd! operation’s reach.

“Approximately 85 percent of the food menu will be prepared on-site, including the seasoning mix and ‘dredge’ for the fried chicken, which is intended to also be gluten-free and dairy-free,” says Radkey. “The brand is able to accomplish this by maintaining a small but robust and strategic menu mix over the breakfast, lunch, and dinner day-parts. Other food items such as the chile cornbread, breakfast biscuits, and sandwich buns will be sourced through regional partnerships.”

While developing Absurd!, KRG has created a loyalty program to go along with it that’s relevant to today’s guest preferences and consumer habits. Loyalty programs have made the news lately, with attention being paid to how they’ve been changing for the past couple of years. Tech has emerged as a driver for such programs, combining guest data and personalized digital interactions to increase loyalty. However, creativity is a crucial element as well. Recognizing the value of a unique but easily understood loyalty program that offers an attractive value proposition, KRG’s approach for Absurd! is a beverage-based subscription service.

“With a low monthly cost of approximately $8.99 USD per month, the Absurd! beverage subscription program, which is optional, gives the brand an easy way to attract customers and convince them to change their traditional F&B ordering habits while building a strong base of loyalty (and data),” says Radkey. “Consumers today are accustomed to low-cost monthly subscriptions. Therefore, we think it is time for restaurants to tap into that opportunity. The ‘unlimited drinks’ within this program include coffee, iced tea, lemonade, and an assortment of flavored soda waters.”

Absurd! Kitchen Co. isn’t unique for the sake of being different. First and foremost, the concept was designed for experienced and new operators alike so they can thrive in the new era of hospitality. The dedication of KRG Hospitality to helping operators flourish with concepts that are scalable, sustainable, profitable, memorable and consistent is ingrained in Absurd’s DNA.

The concept is a recession- and pandemic-proof QSR that doesn’t rely heavy upon day-to-day involvement by the owners, making it ideal for operators of any level, from the neophyte to the experienced hospitality group.

Click here to learn more about Absurd! and visit www.AbsurdKitchen.com to download this turnkey concept’s information packet.

Image: KRG Hospitality