From daily coffee for regulars to exclusive cupping experiences for coffee geeks. Cafe memberships or subscriptions are a canvas for creating incredible customer experiences that drive loyalty while generating recurring revenue for your business.
But how can you be sure that a cafe membership is right for your business? How do you build membership tiers that appeal to different types of customers? What's the best way to get started?
There's a lot to unpack so we organized this guide around the foundational questions you’re likely to be asking yourself as you consider a membership program:
Let’s dive into all those questions and more…
Whether you operate one unit or twenty, your business is about getting new customers through the door and making sure they come back as often as possible. That’s a universal truth for almost any type of business, but moving the needle on customer acquisition and retention is anything but simple. So what can you do proactively to extend your brand’s reach and retain customers?
Membership programs are a unique tool because they can impact both sides of the acquisition and retention equation. By offering membership as one way to experience your cafe you’re putting a differentiated offer out in the market. We’ll get into all the reasons why customers subscribe below, but the bottom line is that you’re offering a unique customer experience and potentially amazing value without resorting to direct discounting.
When it comes to retention, membership programs really shine. Unlikely loyalty programs, they come with a direct, financial commitment that encourages customers to visit more frequently. This deeper level of commitment aligns your customers with your brand like never before.
Memberships for local businesses may be new, but the early results from brands like Pret-a-Manger are incredible. Pret saw a 4x increase in spending by subscribers vs. non-subscribing clients. Membership drives visit frequency and visit frequency drives spending. We’ll go much deeper into the economics of membership, but let’s take a step back and look at the consumer behavior that drives the unique dynamics of membership business models.
Memberships and subscriptions have been around for over 400 years, so we have a lot of history to tap into to help us understand consumer behavior. What nobody could have predicted is the explosion in subscription models during the pandemic.
Thousands of direct to consumer and retail subscriptions launched between 2020-2022. In fact, the e-commerce subscription box market is now valued at $23 billion and is projected to grow to $42b in 20271. The total value of the subscription economy is expected to grow 65% annually to over $900 billion by 2026! Those are stunning numbers, but they're not surprising.
Technology has empowered any businesses to build direct relationships with consumers and subscriptions are a powerful way to cement those relationships. Subscription focused brands have become so strategic, that they're simultaneously addressing the three key reasons for consumers to subscribe:
Delivering on all three subscription triggers is part art and part science, but it can yield powerful results. Let's see how convenience, access and community can come together in a local, cafe subscription.
There's no one-size fits all answer to this question, but that's the beauty of it. How your business can adapt to a membership model is entirely up to you and there's plenty of room to experiment. In fact, you may choose to have several subscription tiers to serve different customer types.
As you start to brainstorm, try jotting down a few customer types or profiles that make sense to you. Here's a simple example:
Your approach to segmentation is likely to be different, and that's great. The key to creating a great subscription experience overlaying the segments on the reasons consumers subscribe. Let's break that down…
Cafe subscriptions can enable any of your customers to enjoy their coffee in a frictionless way. Accessing coffee without ever pulling out a credit card makes for a more personal experience. Convenience is, in almost all cases, going to be the foundation upon which your subscription experience is built. In fact, without offering convenience it may be difficult to frame how the subscription fits into your customers day-to-day.
A few simple benefits that establish convenience in your customers' minds are:
In addition to thinking through the benefits, also consider the ease of managing your program. Is it just as easy for customers to cancel as it is to subscribe? Will this add operational overhead, or is the program easy to manage? It's shocking how many organizations still make it difficult for subscribers to cancel. While the business incentives suggest that you can earn a few extra months of revenue, it's never worth it.
Giving subscribers exclusive access to unique products, services or experiences is a powerful way to build a deeper relationship. Fortunately, specialty coffee businesses have virtually endless opportunities to create member-only access experiences:
Ideally your member-only experiences feed directly into fostering a sense of community.
Community is arguably the most powerful, but also most difficult value to create. How you go about creating a sense of membership and belonging is personal to your brand, and will require no small amount of experimentation.
The foundation, however, is giving members access to the people that make your business unique. From the owner to the roaster and the baristas, connecting with your brand is about connecting to the people behind it. What you're trying to do is to foster a conversation that gives members another tier of exclusive access, and gives you insights to better understand your customers.
Here are a few specific ideas:
Over the past 10 years subscription businesses have outpaced the growth of the S&P 500 by a whopping 4.6x2. Done right, subscriptions can help you grow faster while generating predictable, recurring revenue.
When you launch your local, cafe subscription you'll want to watch a few key metrics:
Subscription analytics run deep, but keeping an eye on these foundational metrics is a great start. If you see steady growth in your subscriber base, an increase in visit frequency, and at least a steady check size, you're generating more revenue per customer. Not only that, but you'll have a steady stream of predictable subscription revenue that you can count on.
Building a strong business case for launching a membership is always a useful exercise and can be very helpful in designing a profitable program. We put together a simplified financial model that can show you the impact of subscribers vs. non-subscriber by relying on a few key drivers of success:
The simple example below shows what happens when visit frequency increase by just 2.5x and the check size stays the same for a program with just 100 subscribers.
With typical visit frequency increases of 3-8x for subscribers, the potential impact is a multiple of what you see above. Even with a small program you can drive significant, predictable revenue to smooth out your cash flow and make your business more predictable. Email hello@anglehq.com and we’ll send you access to the model and can even help you put a more granular version together.
Launching a successful cafe membership or subscription starts with a strong business case. At this point you’re armed with a strong foundation in the membership business model as well as a financial template to help you build projections. There’s nothing standing in your way and launching a program is significantly easier than you might imagine, we really mean that. The entire process requires no more than 1-2 hours of your time.
We built Angle to make it incredibly easy to launch a membership program. We offer a white glove onboarding process that follows a simple workflow:
There’s literally zero risk or upfront cost in launching with Angle. Start at our free tier and launch your program at one location to see how membership works for your cafe. We know you’re going to have an amazing outcome.
If you're interested in taking your first steps towards designing a subscription experience, let's chat. We can help you brainstorm around customers segmentation, pricing and benefit design. Reach out at hello@anglehq.com and we'll set up 30 minutes to get the ball rolling, you’ll be surprised how quickly things move from there. We designed every aspect of the experience to be simple, fast and have transformative potential for your business.
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