Paula: Welcome to Let’s Talk Loyalty, an Industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder of Let’s Talk Loyalty. Today’s episode is hosted by Tom Peace, Managing Director of The Loyalty People, a strategic consultancy with a laser focus on loyalty, CRM, and customer engagement.
The Loyalty People also runs a free global community for anyone working in the loyalty industry. If you are working in loyalty marketing, make sure to join. Let’s Talk Loyalty every Tuesday, Wednesday, and Thursday to hear the latest ideas from loyalty experts around the world.
Tom: Hello there and welcome to another five-minute summary show on behalf of Let’s Talk Loyalty. I’m Tom Peace, Managing Director of The Loyalty People and presenter of Let’s Talk a Little Loyalty. This week, my five-minute summary show showcases Paula’s interview with Meenakshi Nagarajan, SVP, Recurring Revenue and Loyalty from Panera Bread, a US Baker chain of over 2000 cafes and one of the restaurant industry’s largest loyalty programs.
In early 2020, Panera Bread dramatically changed the loyalty industry with a disruptive subscription proposition, offering unlimited coffee for just $8.99 a month. At the time, this was a very innovative move and since then many brands have followed by example. We are seeing more and more subscription based programs, and this is clear proof of the value proposition if you get the strategy just right.
Firstly, it’s really interesting to hear Meenakshi discuss retention as a key success metric for loyalty as this is essentially the key aspect of a subscription model. Clearly, Meenakshi has a firm understanding of how to drive the best returns from loyalty for Panera Bread. Through the interview, we hear a fascinating discussion around how a subscription-based loyalty program aligns to a member’s psychology of habitual purchase and economic value.
Meenakshi talks a great deal about how coffee is a habit for their customers, and creating a subscription model has really influenced purchase behavior in a big way. Customer’s habitual purchase of coffee is now linked to their purchase in Panera Breads, and as a result, sales performance has been boosted beyond all expectation.
Retention is up to 90 to 95% and 70% of subscribers have increased food sales with Panera. So not only has the subscription bought a steady income itself, but food sales have also been boosted as a result of the increase in footfall from their very satisfied and engaged customers, subscription-based loyalty programs also have an economic value that creates a cognitive trigger in consumers psychology and Meenakshi talks about how this is particularly relevant in America, where there was at the time of launch, a lot of discussion about the amount of money that the average consumer spent on coffee. So at just $8 99 cents per month for unlimited coffee. This subscription has a very simple value proposition. But this is still very powerful in terms of psychology, of buying. The customer feels strongly that they have already invested in this brand and therefore must get as much value out of the subscription as possible, driving really strong loyalty with the brand.
I thoroughly enjoyed this podcast and I would highly recommend listening to the main show, which can be found on www.letstalkloyalty.com, and first aired on the 16th of December, 2020. Episode number 169. It was fascinating to hear about the first subscription-based loyalty program in QSR and it seems to have been as massive success as it’s still going strong over two, four years on, although I noticed that the monthly subscription has now increased to $11 99 a month.
Thanks for listening. I hope you enjoyed my summary. All the best, and speak soon, Tom.
Paula: This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its loyalty academy, which has already certified over 500 executives in 38 countries as certified loyalty marketing professionals.
For more information, check out thewisemarketer.com and loyaltyacademy.org.
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