Taco Bell's 30-Day Subscription Plan: A New Frontier for Customer Loyalty?

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Monday, December 13, 2021

Taco Bell is the latest brand to launch into the subscription market, offering loyal customers a taco every day in return for a set fee.

Article 3 Minutes
Taco Bell's 30-Day Subscription Plan: A New Frontier for Customer Loyalty?

Taco Bell has been widely lauded as an innovative brand when it comes to marketing, never shying away from creative strategies that are both humorous and down to earth. As fast food loyalty programs have exploded onto the scene in recent years, it’s no surprise that Taco Bell is trialing one on a superlative level.

Consumers are used to subscription services and have embraced them in all aspects of life, from TV to cosmetics, so the concept of a taco subscription is not a big leap. The Taco Lover’s Pass has however been described as an over-the-top idea, but Peter Saleh, a BTIG restaurants analyst, thinks it makes a lot of sense.

"Overall, I think if you're buying this pass, whether it's $5 or $10, I think you're gonna feel somewhat obligated to go there more often. And we do know that loyalty guests come back two to three times more frequently than non-loyal guests and spend 25% to 30% more," he said.
 

The Taco Bell subscription is being rolled out at 17 locations in Arizona to test its efficacy and is priced at $5 or $10 depending on the franchise. For this fee, users are able to claim one free taco a day for 30 days. There are multiple reasons why it could prove successful for the brand.

1. Driving traffic to the app

With the taco pass available exclusively on the app, it should drive more downloads and give Taco Bell multiple benefits. Having your business’ app on a customer’s smartphone facilitates better engagement, improves personalization and offers instant access to customer service channels should they need them.

2. Capturing customer data

Loyalty programs are an effective way to capture customer data, which can then be used to influence your marketing in the future, with better targeting and personalization. Customers not only disclose personal information about their demographic, location and interests when signing up for a loyalty scheme, but their subsequent purchases are also monitored. Taco Bell can therefore see when, what and how much of a product is bought, tailoring future offers based on this insight.

3. Lead to more frequent purchases

Having paid an upfront fee, users are more likely to choose a brand over an alternative, as they feel they’ve made an investment. Such frequent purchases are particularly valuable, as once visitors have been lured in by a free taco, they’re likely to add more items to their carts. Turning casual customers into regulars via its subscription plan could offer increased ROI for Taco Bell.

4. Build loyalty for the brand

Incentivizing repeat visits in an area where there’s a lot of competition is a challenge that requires innovation. Not only is Taco Bell offering a free product every day with its subscription, but those who sign up unlock a dedicated section of the app, giving them the impression of being part of an exclusive club. Being offered something free every day helps to build a habit, but there’s no doubt the brand will have to adapt its strategy as time goes on and the novelty of free tacos wears off.

5. The growth of the global subscription market

The global subscription box market reached a value of US$ 18.8 billion in 2020 and in a world still affected by the pandemic and increased numbers of people working from home, it’s continuing to grow. IMARC Group predicts the market will rise at a compound annual growth rate of 20.1% between 2021 and 2026. Businesses that can tap into it and its associated benefits with an attractive offering will reap the rewards.

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