Ludwig Jamet, Pongo: "Restaurant subscriptions are set to become a major source of revenue".
After creating a stir during the pandemic in the U.S., the restaurant subscription system is taking its first steps in France via Pongo. We interviewed co-founder Ludwig Jamet about this feature of the future - already in beta with some of our customers.
Ludwig: It's a concept that originated in the United States and Japan, where the big chains - imitated by the smaller ones - asked themselves how they could generate a reproducible revenue stream. Following in the footsteps of American chains like Panera Bread, it's gradually making inroads in Europe and France with "Prêt à manger" subscriptions, Monoprix Flix for groceries...
In the restaurant sector in France, it's still in its infancy: customers need to adapt to the subscription format. But for a restaurant, it allows them to create an additional, reproducible revenue channel, while generating greater brand commitment.
It's completely in tune with the times: it's part of an underlying trend in the restaurant business to create brands rather than old-fashioned restaurants. We're seeing more and more concepts like Pokawa, Bricktop Pizza and Big Mamma, run by savvy entrepreneurs who understand the benefits of building great food brands. The advantage of subscription is that it creates even greater brand loyalty.
Not necessarily, but it's true that it works well as a complement to other marketing actions. If you're already present on social networks for acquisition, or if you're running SMS or email campaigns to keep people coming back, it can work well.
And in a way, it's the last stage of the rocket, in the sense that the restaurateur had better already be aware of these practices. In all sectors, generating MRR(monthly recurring revenue) is very time-consuming. It's not enough to press a button to automatically generate 12,000 subscribers at 8 euros a month. It's going to take some real effort on the part of restaurateurs.
Subscription is the kind of feature where you have to be fully committed. If you do it half-heartedly, it can fall like a soufflé. You can't just do an Instagram post: you have to generate conversation in and out of the restaurant, and reach out to regulars.
The advantage of Pongo is that we know where they are: if a restaurant uses our CRM, it has access to all its customers' consumption and usage data. As a result, it can detect regulars and present them withits restaurant subscription offer, along the lines of "we've noticed that you come here often, so here's what you stand to gain by becoming a subscriber". You need to couple standard marketing mechanics with this new subscription model, to get people to use it. As we all know, with subscription models, the hardest part is getting people to subscribe.
It's a bit of both: restaurateurs who have heard about the system are extremely receptive. Similarly, restaurant customers are quite keen on the idea of subscribing to their favorite restaurant. After that, there's still a way to go between "liking the idea" and actually paying a monthly subscription. But we're getting there, little by little.
In the minds of consumers, a subscription costing around ten euros a month is equivalent to the added value of Netflix. Subscribing to a pizzeria for €8 a month isn't something everyone takes for granted. The customer really needs to perceive significant added value. It's going to take a bit of work on the part of restaurateurs to "get the ball rolling".
It all depends on the restaurant owner, who is free to innovate. The basis is discounts on the menu and drinks, as well as joining a community with exclusive events.
In our beta test, Bricktop Pizza's subscription is very promising. For €8.90/month, you get a free margherita pizza for every pizza you buy, every day. It's really very attractive: you just need to bring friends or a couple to make the most of your subscription. The subscription is a little higher than other restaurants, which offer subscriptions at around €5 a month. But the return is very good, with a lot of subscriptions in the first few days. We're keeping a close eye on this, to find out what proportion of people will remain subscribers over several months!
Both engagement and loyalty, and of course a stable revenue channel. If after 12 months you generate 500 subscribers, at €8/month, that's €4,000. For a restaurant, that's almost the price of rent. It can become really important.
The idea is that the most loyal of loyal customers should be rewarded with significant benefits. Like all innovative ideas, it will take some time to take root. Restaurants will have to get involved at operational level. But the payoff, if we succeed, is truly structuring.
