PF Chang’s Bets Free Delivery — Not Food — Key to Subscriber Loyalty

PF Chang’s Bets Free Delivery Key to Loyalty

As restaurants seek to drive loyalty beyond what is capable with just points-per-dollar rewards, many are launching subscription programs to incentivize more frequent purchasing.

For instance, Chinese-inspired casual dining chain P.F. Chang’s, which has more than 300 restaurants across 22 countries, announced Wednesday (Sept. 28) the launch of a rewards program subscription, offering free delivery, expanded rewards-earning opportunities and “VIP-level service” for $6.99 a month.

Read more: PF Chang’s Tests Subscription Commerce Waters, Free Delivery

P.F. Chang’s Chief Operating Officer Art Kilmer said in an interview with PYMNTS that this announcement is in line with an industry-wide trend of restaurant subscriptions shifting away from being focused on offering specific items at regular intervals toward offering services.

“An overall trend we are seeing in loyalty programs is that consumers are not limited to just item-based rewards … as the benefit of subscription models,” Kilmer said. “Rather, consumers are seeing more service-based program benefits as well that allow for engagement and interaction with the brand.”

Taking a Tip from Aggregators

It’s difficult to find evidence of Kilmer’s claim among other restaurant brands. P.F. Chang’s is the only major chain to offer a delivery subscription, but restaurant customers are growing accustomed to service-based programs for digital ordering. Many are already using leading aggregators’ free delivery subscription offerings — DoorDash’s DashPass, Grubhub’s Grubhub+ and Uber Eats’ Uber One.

Indeed, these programs are proving quite popular with aggregator customers. Uber, for its part, told analysts in August that one in three Uber Eats orders now comes from Uber One members.

See more: 1 in 3 Uber Eats Orders Come From Paid Subscribers

Meanwhile, most subscriptions currently being offered by restaurant chains themselves center on menu items or item categories. One of the leading programs, Panera Bread’s Unlimited Sip Club subscription, offers free beverages up to every two hours. Taco Bell, meanwhile, recently brought back its Taco Lover’s Pass program, offering rewards members one taco a day for pickup for 30 days for a one-time fee.

Read more: Taco Bell Brings Back Subscription Pass to Boost Loyalty Signups

By the Numbers

Overall, the potential audience for restaurant subscriptions is relatively small but comprised of high-value customers. Research from the February/March edition of PYMNTS’ Digital Divide study, “Digital Divide: Restaurant Subscribers and Loyalty Programs,” found that 17% of consumers are “very” or “extremely” interested in being provided a restaurant subscription service. Meanwhile, most consumers (58%) reported being just slightly interested or not interested at all in participating.

See more: Four in 10 Consumers Open to Restaurant Subscription Services

Yet, subscription seekers tend to be restaurants’ most loyal customers. The study, which drew from a survey of more than 2,000 U.S. adults, found that 78% of subscribers and 73% of those interested in subscriptions reported being very or extremely loyal toward their preferred quick-service restaurants (QSRs). Conversely, just 41% of those who were uninterested in subscriptions said the same.

Granted, subscription programs are not easy to implement.

Putting in the Work

“While this is a guest-facing rewards program, I think it’s also interesting to note some behind-the-scenes elements,” Kilmer said. “This process consisted of 18 months of integration between various platforms as well as backend coordination by our team and providers as well as execution and training with our field team.”

The restaurant subscription space has certainly been active in recent months. In addition to the P.F. Chang’s announcement of this launch and Taco Bell’s announcement of the return of its program last week, two major brands also debuted their own offerings in August.

For instance, quick-service giant Subway announced its Footlong Pass, a one-month subscription offering 50% off footlong sandwiches (max one per day) for September for a one-time $15 payment, selling out all 10,000 passes within six hours. A day earlier, BJ’s Restaurants and Brewhouse, which owns and operates 214 casual dining restaurants in 29 states, had launched its Pizookie Pass dessert pizza subscription, selling out the 200 passes within an hour.

Read more: Subway Footlong Pass Shows Power of Menu-Item Subscriptions

P.F. Chang’s expects more entrants into the space going forward.

“Across the industry, we know this is a model that others will likely explore,” Kilmer said. “We’re focused on doing it in a way that works for us and our guests.”