Taco Bell's subscription service boosted rewards members 20%

Dive Brief:

Members of Taco Bell’s subscription service, Taco Lover's Pass, are three times more likely to visit a Taco Bell restaurant per month, according to data the company emailed to Restaurant Dive. After a first trial in September the service expanded nationally in January, allowing members to redeem one of seven tacos a day for 30 consecutive days for $10.
The Taco Lover's Pass program can be purchased in the brand's app and has resulted in 20% new rewards members, bolstering the brand's loyalty program that was first introduced in 2020. It also generated a 16% renewal rate for those opting into a second month.
Chains like Panera, Pret A Manger and Sweetgreen have recently launched subscription programs as they have become increasingly popular throughout the past two years to build loyalty and drive frequency.

Dive Insight:

Subscription programs offer incentives to engage with brands digitally, which may generate higher checks and provide companies with more customer data. They also differentiate brands from competitors. If a customer is a frequent coffee drinker, for example, a subscription service will likely offer a better value proposition and a more seamless experience than a traditional loyalty program.

Taco Bell's subscription program has generated new loyalty members and traffic, the company told Restaurant Dive. Since the subscription service runs through Taco Bell's loyalty program in its app, it is building on the brand's digital growth. Digital sales now account for about 20% of the company's mix, according to parent company Yum Brand's recent Q4 earnings report, and the goal is eventually to get to 50%.

During Yum's Q2 2021 earnings call, CEO David Gibbs said the loyalty garnered a 35% increase in overall spending from active members, even before the Taco Lover's Pass.

It also makes sense for the brand to tie its subscription service to its loyalty program, as new data from PYMNTS and Paytronix finds that subscription members are more than twice as likely as non-subscribers to use QSR loyalty programs. Those subscription members often identify as "very" or "extremely" loyal to the brand.

Taco Bell isn't the only brand seeing success from its subscription program. Panera's pilot drove a 70% increase of diners adding on to their check and an initial 25% increase on MyPanera loyalty members. According to the National Restaurant Association State of the Industry 2022 report, 57% of adults said they would likely participate in a subscription program if it were offered by one of their favorite restaurants, with 80% of millennials and Gen Z indicating they would partake.

Some subscription programs, however, such as Burger King's coffee subscription, never gained footing and were discontinued. Research from McKinsey finds that 40% of subscribers cancel in less than three months.