Source: App Store/P.F.Chang’s
Will P.F. Chang’s members upgrade to its new subscription plan?
P.F. Chang’s has launched a paid subscription program that offers its members special perks in exchange for a $6.99 monthly fee.
Platinum Rewards members receive all the benefits of the restaurant’s free rewards program (renamed Gold Rewards), plus:
- Upgraded earning opportunities: Platinum members earn 15 points for every $1 spent on dine-in, takeout and delivery orders versus 10 points per $1 spent under Gold Rewards. Under the program, 2,000 points earns a $15 food credit.
- Unlimited free delivery: With the subscription, there are no order minimums or delivery fees with orders placed through pfchangs.com or on the P.F. Chang’s mobile app.
- Priority reservations: Platinum members get the VIP treatment with waitlist priority. As the program is integrated with the restaurant’s host stand and reservation system, staff are able to greet members accordingly and seat them at their favorite table.
- VIP concierge: Concierges are exclusively available (phone and email) to help Platinum members with questions or comments.
Both Gold and Platinum members receive a complimentary birthday dessert or appetizer.
The company expects that most Platinum subscribers will be members who upgrade from Gold, which has five million members, although they see the program also attracting new members.
P.F. Chang found customers were willing to pay more than $6.99 for Platinum’s enhanced benefits, but set the low monthly price to drive adoption. Mr. Adamolekun told Restaurant Business, “If you sign up for this, it suddenly becomes a much better deal than anywhere else you can possibly go.”
A few other chains have introduced subscription programs in the restaurant space. Taco Bell’s $10 monthly subscription offers one free taco every day, while Panera offers unlimited beverages for $10.99 per month.
In January, Sweetgreen experimented with a $10 monthly subscription providing a $3 discount once each day for 30 days. In August, a Subway subscription program offering half-off footlongs throughout the month of September to 10,000 customers sold out in six hours.
Gregory Francfort, a restaurant analyst at Guggenheim, told CNN that driving loyalty is critical for casual, sit-down restaurants since diners typically visit only two or three times a year and “increasing that even by just one visit can be very meaningful to revenue.”
- P.F. Chang’s Launches New Subscription-Based Loyalty Rewards – P.F. Chang’s
- P.F. Chang’s Launches $6.99 Monthly Subscription Program – Restaurant Business
- Will unlimited free drinks pay off for Panera? – RetailWire
- Will Taco Bell lovers sign up for a taco a day? – RetailWire
- P.F. Chang’s is launching a subscription program – CNN
- Subway Introduces Footlong Pass Subscription Service for $15 – QSR Magazine
- Sweetgreen rolls out a subscription program, as consumers kick off New Year’s resolutions – CNBC
- Taco Bell Brings Back Subscription Pass to Boost Loyalty Signups – Pymnts.com
Discussion Questions
DISCUSSION QUESTIONS: Do you see more potential revenue drivers than margin eroders in P.F. Chang’s Platinum Rewards paid-subscription program? What are the best perks?
Poll
Loading …BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
David Slavick
Co-Founder & Partner, Ascendant Loyalty
Regular customers of P.F. Chang’s may find value in this, especially the enhanced points. However I think this is an example of jumping on the subscription bandwagon. A VIP concierge to help members with questions seems a little over the top – how much are folks going to use this?!
Exactly. I wonder if the concierge will willingly share their recipes?
P. F. Chang’s has found a way to realize an additional $84 a year from their most valuable customers. I question how many of their customers will agree to paying $84 a year for something that they probably feel they have already earned with their loyalty. I don’t see this moving the needle for their loyalty program.
Found a way for sure — a wrong direction, but they chose to go forward with it. Someone sold them on the benefit of charging for what customers should get for free. When you see numbers like that, unsophisticated clients jump at the “opportunity.” Let alone the value proposition is foolish. You never build a program with its primary benefit being accelerated point earning – based on your affinity to the chain, you should be in the higher tier and get that based on historical or potential annual spend.
A subscription like this promotes repeat business. Customers will want to get their money’s worth in the form of free delivery, extra points (which will be redeemed), and more. If you are a somewhat regular P.F. Chang’s customer, this is a good deal.
There is definitely an appetite for paid subscription restaurant loyalty programs and it smart of P.F. Chang’s to provide loyal customers another rewards option. Subscription programs like this will only appeal to the most loyal and frequent diners, as the ROI on the extra points value would require customers to spend nearly $300 a month if they only take advantage of this feature. If you frequently order delivery service, then the program is much more appealing.
$300 a month! That is a lot of P.F. Chang’s.
Lots of sodium, corn starch and sugar-based ingredients, not exactly a healthy prescription for most Americans.
For a loyal, regular customer of P.F. Chang’s, this should be a good deal and it definitely can drive incremental revenue for the chain. The question is longevity. How long can this type of program be viable? Like any loyalty program, the value is correlated to the utility it offers. If P.F. Chang’s does an outstanding job of keeping real and perceived value high, then they’ll grow the base and drive revenue.
Like most subscription plans P.F. Chang’s is primarily designed to increase visit frequency by existing customers and hopefully increase the user’s ticket. I don’t foresee many non-Gold members subscribing. The price point should certainly help.
The two best perks are the unlimited free delivery and priority reservations. I see no value in the VIP concierge. The 50 percent increase in point value per dollar will still require purchases of $133 to earn a $15 meal credit. Sounds better until you do the math.
I understand subscription programs for Sweetgreen and Subway. Both can boast frequent return visits for regular customers. There are everyday customers at these.
With the frequency of visiting P.F.Chang’s on the other hand, I doubt the offer is terribly compelling unless a customer is returning enough for a payout on their subscription.
Hmmm. I can buy a lot of lettuce wrap appetizers for $84. If P.F. Chang’s truly appreciates me I should not have to pay to get an accelerated earn on my spend. This is wrong-headed — I really don’t know where to start. No one should have to pay to get the benefits as outlined and you certainly aren’t getting $168 in value unless free delivery is a thing for their most avid guests. $168 is the guide – subscription must represent twice what you are charging for associated benefits. The chain will be chasing renewals, getting loads of complaints when reservations are not fulfilled, and the technology better work flawlessly in calculating the incremental earning rate Gold vs. Platinum. P.S. Could they have picked a tier naming convention a bit more inspiring that perhaps flows from the brand imagery?
Given the high awareness level of inflation and fear of recession, I think there will be appeal for any rewards program that looks like it’s saving money. I have no idea how often P.F. Chang’s frequent visitors visit. Probably not as often as those who frequent Taco Bell or Subway. But they can gauge how they are apt to do based on the existing Platinum Rewards program.