As subscription merchants look to drive loyalty and combat churn, Monterey, California’s Switch Bakery is seeing its Bread Club build long-term relationships with customers by meeting their demand for flexible plans.
In an interview with PYMNTS, Joshua Bradley, co-founder of the bakery, explained how this bread subscription program’s lower-commitment plans have helped drive year-round revenue.
“Originally we were doing 12-month subscriptions, which people love to give as gifts around the holidays, but it puts a lot of burden, halfway into the year, when you’ve already received all of that cash flow,” Bradley said. “It seems like [our monthly subscription has] been a really been a really good entry for people.”
The gluten-free bakery’s Bread Club’s options include a weekly, bi-monthly and monthly plan and offer consumers the option to customize their bakery boxes and set dietary preferences.
Bradley noted that, while starting consumers with a weekly subscription has the chance of alienating those customers when they discover that they do not go through enough bread in a week, the option to start as a monthly subscriber has actually helped drive weekly subscriptions, as people get accustomed to the product and begin consuming more.
“The monthly option, which seems somewhat counterintuitive to how you would normally buy food for your house, has actually been a good entry point for a lot of people,” Bradley observed.
Indeed, flexibility is strongly correlated with subscription merchants’ success, according to PYMNTS Intelligence’s study “Decision Guide – How Retail Subscription Merchants Can Win and Retain High LTV Customers,” created in collaboration with sticky.io.
The report revealed that 97% of top-performing retail subscription services offer the ability to make plan changes to delivery frequency. Conversely, only 13% of bottom performers that provide the same option. Similarly, 100% of top performers provide consumers with the ability to pause service, while only 23% of bottom-performing merchants do the same.
Plus, per “The Subscription Commerce Readiness Report: The Loyalty Factor,” a report by PYMNTS Intelligence and sticky.io, many food and beverage subscribers look for flexibility features and customization options. Twenty-one percent said they see the ability to cancel the subscription any time at no cost as important when signing up for a food and beverage subscription, and 18% said the same of the ability to make changes to the subscription frequency at any given moment without the need to unsubscribe first.
As far as acquisition, given the specialized nature of the brand, providing gluten-free bread and other baked goods, Switch Bakery has seen word of mouth prove to be one of its biggest engines for subscriber growth.
“When you get into niche, dietary stuff, people tend to make friends with other people who have like issues or like preferences, and so the word of mouth travels a lot,” Bradley said. “I’d say probably 30% of our customers have brought in at least one other customer.”
Only a small share of consumers actively seek out food subscriptions, but those who do tend to be eateries’ best customers, according to the PYMNTS Intelligence study, “Digital Divide: Restaurant Subscribers and Loyalty Programs,” which drew from a survey of more than 2,000 U.S. consumers.
Only 17% of those surveyed said they were very or extremely interested in being provided a restaurant subscription service. Yet 78% of restaurant subscribers and 73% of those interested in subscriptions reported being very or extremely loyal toward their preferred quick-service restaurants (QSRs), while only 41% of those who were uninterested in subscriptions said the same.
This loyalty can go a long way.
“One of the nice things about having a subscription model, particularly if you’re applying it to a region where people can come find you, is it’s a really good way to build visibility, but also build a broader customer base,” Bradley noted, “so that when you go and expand or do new things, you know, those people are already on board for you.”
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