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Recently, we read about how Andrew Simmons is currently experimenting with subscriptions for his pizza restaurant. For those who haven't head of him, Andrew is a successful entrepreneur and restaurant owner in the US who currently owns and operates a pizza restaurant that utilises the latest hospitality technology including pizza making robotics. In the past, he had successfully founded and sold a business in the logistics industry.
PIZZA SUBSCRIPTION STRATEGY
Andrew offers a $99 per year subscription that lets his customers redeem a free pizza everyweek. According to Andrew's LinkedIn post, so far, he's made a profit margin of 45.66% on those subscriptions. However, that was based upon an average free pizza redemption rate of 44% (meaning not all customers were redeeming their weekly free pizza). Separately, subscribed customers who were redeeming their free pizzas often had add-on purchases. This helps to produce "up-sell" revenue for each subscription.
A subscription for a pizza restaurant can be used as a strategic tool to drive more recurring purchases and increase customer loyalty. The upfront subscription revenue collected can also be re-invested into your business to drive even further sales (e.g. marketing and advertising).
Rather than giving out a free pizza, we think it would be a significantly more profitable strategy by offering subscribers:
1) offering subscribers 1 free delivery every week (any day) or
2) each week, 30% discount on 1 meal (min. order value $50) between Mon ~ Thu.
The above subscription benefits provide a strong incentive for customers to purchase from your during week days where you normally have less sales (this will in turn help to increase sales on those days).
By limiting the benefits to once a week, this will help to encourage more weekly sales and overall monthly recurring sales.
Unlike Andrew's weekly one-free pizza redemption subscription, you can expect larger profits and sales increase from this subscription strategy.
ABOUT DELIVERY TASKER
DeliveryTasker is a delivery driver platform where restaurant owners can hire food or pizza delivery contractors for 2 hours or more, paying them a combination of hourly rate plus a small delivery fee, to deliver just for the restaurant.
DeliveryTasker is frequently used by restaurant owners who choose the self-delivery options on Ubereats, Menulog and Doordash to reduce their commissions by over 50%.
Restaurant owners typically hire their own food and pizza delivery contractors to give them more control over their delivery times, improving customer satisfaction.
By taking advantage of the high delivery order volumes from third-party delivery apps like Ubereats, Menulog and Doordash, restaurant owners can hire a delivery contractor on an hourly rate to run orders for their own online ordering website, phone orders and orders from Ubereats, Menulog and Doordash. This helps to spread the hourly delivery cost across more orders, keeping cost per delivery low.