As restaurants look for ways to drive loyalty, San Francisco wine bar El Lopo is leveraging a membership model to reward its most loyal customers and convert more casual customers into regulars.
In an interview with PYMNTS, Daniel Azarkman, El Lopo’s owner, spoke about how the restaurant’s Take-Care-of-Me Club membership program has helped guarantee income in uncertain times and build brand affinity.
“It’s certainly nice to have some predictable revenue. … I’d say it’s aside from that reliability, it’s… been a great way to just say who we are, and even a lot of people that don’t end up signing up for it do read through it, do ask questions about it and are still impressed that we are the kind of place that would run something like that.”
The membership, which currently has 23 members, has two tiers for in-restaurant customers, one that costs $89 for $100 in restaurant credits and one that costs $175 for $200, so at a minimum, the program guarantees more than $2,000 coming in.
With these memberships, the restaurant staff brings that customer food and beverages that they think the diner will enjoy until they hit their credits (or “wave a little white flag,” per the program’s website), and they have the option to get any wine by the glass, always to secure a reservation and send a free drink to someone at another table once per visit.
The idea for the program, Azarkman explained, was prompted when software platform The Third Place, which offers subscriptions and memberships for many restaurants, approached El Lopo.
“At the time they were mainly just doing like take home kits that were that were pretty COVID friendly, … but I wanted to come up with something that would actually get people back in the door, … and [this program] was a natural fit, since we always had a pretty heavy focus on regulars.”
He noted that the restaurants’ most loyal customers dine in “at least three times a week,” a considerably high number considering how few consumers eat at restaurants so regularly. According to surveys carried out for PYMNTS’ “Connected Dining” series, as of June, only 7.4% of restaurant customers made purchases from any restaurants three times a week or more.
Plus, Azarkman noted that the membership has “created new regulars” after interested consumers saw the program advertised.
The guaranteed income that the subscription program provides may be especially helpful now, with restaurant visits overall declining. Connected Dining data noted that just 58% of consumers made at least one restaurant purchase in June — a 9 percentage point decrease from the month before and the most pronounced difference in monthly purchase percentages since last November.
Plus, the amount consumers spend per visit is also taking a dip this summer, with the study finding that, in June, the average spend per visit averaged $24.30 per person, a 7% decrease from the previous month and the lowest spending amount for 2023.
Notably, looking ahead, Azarkman does not particularly want the membership program to grow much more for the time being, given the level of familiarity that the restaurant hopes to maintain with its members, though he noted that a similar model could potentially work in a larger establishment if the restaurant was willing to sacrifice that personal touch.
“It works because we’re as small as we are, and I’ve definitely seen that it wouldn’t scale well — at least not the way we run it — because a lot of it depends on the human touch of knowing who our members are. … Assuming we stay within the same four walls in one location, I think I would cap it at 40 members.”
