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Why Membership and Loyalty Programs Are Flooding the D.C. Restaurant Scene

Behind the industry’s post-pandemic push to build a repeat customer base 

Local restaurant group Tin Shop rewards its members with free beer.
Tin Shop

When members of Tin Shop’s new Social Club are located within 200 yards of any of its nine area bars, their phone pings to remind them one is right around the corner.

To reward regulars across its portfolio, which includes newly-expanded Franklin Hall, TallBoy, Lucy, and Slice & Pie, Tin Shop offers daily food and drink freebies and invites to exclusive happy hours. The $39.99-per-month club has an ambitious goal of reaching 10,000 members.

After an earth-shaking pandemic, more local restaurants and bars are turning to such novel ways to create a devoted following.

“While D.C. is absolutely open for business, many diners have just not returned to dining out or to dining out as often as they once did,” says Julie Sproesser, interim executive director of the Restaurant Association of Metropolitan Washington (RAMW). “Lingering remote work, inflation, and rising costs, restaurants are continuing to introduce creative experiences to entice diners to go out to eat.”

Aaron Adalja, assistant professor of food and beverage management at Cornell University, says more independent restaurant groups are upping their marketing savvy to tap into younger diners’ desire for experience-based consumerism. It’s also a response to the depersonalization of the industry that came about during the height of the public health crisis, when third-party platforms like delivery apps became the primary means for customers to connect with restaurants.

“These loyalty and membership programs are really an attempt to bring customers into the fold of the restaurant and create customers that are loyal to a restaurant rather than loyal to an app,” Adalja tells Eater.

Programs come in many forms. There are fan bucks, points, memberships, and off-the-menu meals. But they all have the same goal of fostering a fan base.

Tin Shop’s pandemic-born club is uncharted territory for an industry that typically only has food and service to worry about.

“We’re really good at building bars, we’re really good at curating that — but this is kind of a different step in a different direction,” says Elliot Howe, who runs Tin Shop’s Social Club.

Eateries that don’t have the time or resources to grow their own membership portals are also turning to ready-to-use systems to take care of the backend.

“They’ve already got built-in infrastructure and sometimes models that are already working for other local independents, in other markets, and have proven successful,” says Robert Byrne, director of consumer and industry insights at Technomic.

Daikaya Restaurant Group owner Daisuke Utagawa says his Japanese consortium’s new loyalty program came to fruition because their point-of-sale system Toast offers it as an add-on.

“The administrative part of a rewards program was quite daunting,” says Utagawa. “Having these third parties that administer these things really is the deciding factor for us.”

The program through Toast is a straightforward one: purchases earn points; points earn rewards. But Utagawa is excited about developing it in the future. Big points could be redeemed for a private party on the house, for instance.

Chinatown’s essential ramen shop Daikaya.
Daikaya

D.C.’s Atlas Brew Works quickly built upon the Toast loyalty program it activated in spring 2020. That fall, the brewery started a beer club, a monthly beer subscription that also offers perks like a free pint with pickup and a discount at taprooms.

Atlas owner Justin Cox says the club provides Atlas’s brewers with the opportunity to experiment with limited-edition batches, a process in which he imagines club members could one day take part.

“Maybe we’re crowdsourcing, maybe not the actual recipe, but some sort of flavor inspiration or stylistic inspiration from the club — and really brewing a beer for the club members, by the club members,” says Cox.

As of last month, Atlas customers that purchase its beers at restaurants, bars, liquor stores, or grocery stores earn “fan bucks” redeemable at the brewery’s taprooms in Ivy City and Navy Yard. It’s an effort, says Cox, to get beer buffs through the door.

“We were thinking ‘well we have this huge gap here [with] people who are fans of the brewery and really like to drink our beer but don’t necessarily come into the tap rooms and so how can we come up with something to reach those people,’” says Cox.

Other restaurants aren’t relying on in-person engagement alone. Pandemic-born Table22 facilitates subscriptions for restaurants, bars, and others in the food and beverage industry. Its over 30 area partners include restaurants like La Collina, which offers a fresh pasta subscription, Maxwell Park, which does a wine club, and Federalist Pig, which sends out off-the-menu barbecue to subscribers. Restaurants also tack on additional perks for members like giveaways, member newsletters, and complimentary tastings.

Table22 was conceived as a way to help hospitality stay afloat during an unprecedented time for the industry.

“It became clear that there was gonna be this generational moment for restaurants to change and reassess and build new parts of their business,” CEO Sam Bernstein tells Eater.

But two and a half years later, it’s still growing.

“Frankly for many of our programs, they’re bigger than they’ve ever been and the numbers have continued to increase in terms of the consumer participation and revenue levels,” says Bernstein.

Columbia Heights Malaysian restaurant Makan started a supper club with Table22 in September and plans to send its first dinner program to members this month. Chef James Wozniak says the membership option will generate another revenue stream during the winter as COVID-19 remains on customers’ radar.

“There are a lot of people who may not want to come outside and sit on the patio when it’s 30 degrees,” says Wozniak, “so this’ll give them another opportunity [to] see a lot of unique dishes.”

Diversifying restaurants’ assets can provide a buffer against future hardships, says Adalja.

“If one channel runs dry, [restaurants] have other revenue streams that can essentially pick up the slack,” he says.

Adalja says this is just the beginning of an era of experimentation as the industry evolves at a pivotal moment.

“It’s gonna be a little while before we sort of walk into what the optimal business model is so I think we’re gonna see more exploration, more new ideas being generated by small business owners to kind of figure out what works,” says Adalja.

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