Taco Bell CDO: Niche Paid Subscriptions Extend Engagement

As Taco Bell continues its paid subscription push — its “passes” — the quick-service restaurant (QSR) giant is seeing that, by offering a wider range of options tailored to different customers’ tastes, it can more broadly and effectively drive engagement amid inflation.

The restaurant’s passes offer consumers one daily free order of a given menu item for 30 days for a one-time fee of $10, and it has run these subscriptions for items including tacos and nacho fries. In an interview with PYMNTS, Dane Mathews, the brand’s chief digital and technology officer, noted that the restaurant’s latest move to bring back its Nacho Fries Lover’s Pass follows the brand’s success with its last run of the program in bringing in unique subscribers.

“The user engagement with this pass [in November] was similar to other passes we have run,” Matthews said. “However, the data point that surprised us the most was that there was minimal overlap between Taco Lover’s Pass and Nacho Fries Lover’s Pass purchasers in 2023 at only 12%.”

The trend confirms the brand’s strategy of providing a “unique digital experience” for different kinds of customers depending on their preferences, he added.

Overall, demand for restaurant subscriptions is relatively low, but those who seek out these programs tend to be eateries’ highest-value customers. The PYMNTS Intelligence report “Digital Divide: Restaurant Subscribers and Loyalty Programs” revealed that only 17% of consumers are very or extremely interested in being provided a restaurant subscription service, while 58% are slightly interested or not interested at all in participating. Yet 78% of restaurant subscribers and 73% of those interested in subscriptions said they are very or extremely loyal toward their preferred QSRs, while only 41% of those who were uninterested in subscriptions said the same.

The short-term run of Taco Bell’s subscriptions may be a key advantage, as food and beverage subscriptions face disproportionately high churn, per PYMNTS Intelligence in the report “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention.”

For the Nacho Lover’s Pass specifically, Taco Bell has seen the advantages of offering the program for an item that is typically consumed as a side dish in terms of driving sales in other parts of the menu.

“We … noticed that the average redemption check was higher than previous pass iterations, likely due to Nacho Fries being a great side,” Matthews observed.

The value-focused offering is especially key now, as restaurants deal with diners’ ongoing price sensitivity. Consumers tend to overestimate restaurant inflation, and it is affecting their ordering behaviors. Some reports indicated that consumers are cutting back on fast food altogether, such that brands are challenged to find new, creative ways to draw them back into stores.

With these digital drops, the brand is generating anticipation, which in turn drives engagement.

“Having established the Taco Lover’s Pass and the Nacho Fries Lover’s Pass over the years, we continue to see fans expecting more unique experiences and digital brand touch points that touch on affordability and craveability,” Matthews said. “…Loyalty is becoming a part of our consumer’s routine in how they engage with the brand, anticipating the next digital experience or offering.

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