Why don't more restaurants have memberships?

A guest post by Gloria Dawson highlighting the ultimate loyalty play.

🏝 Expedite is on summer vacation this week! Please enjoy this guest post by my friend and fellow restaurant journalist Gloria Dawson, who recently launched In the Weeds, a publication about the business of independent restaurants.

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The Baker’s Table offers an approachable, thoughtful tasting menu that changes monthly and, thanks to its membership program, welcomes many familiar faces.

In 2018, however, when the restaurant first opened, “it could not have been further from where we are now,” said Chef and Owner Dave Willocks. They were serving breakfast, lunch, and brunch and “got lucky” thanks to some early press and accolades for the Newport, Kentucky, restaurant, he said. His luck ran out with the pandemic.

“After Covid hit, it was like nothing that worked for me worked anymore. We were just bleeding money so bad. Even I barely know how we made it [through Covid]. During that time, I started to say to myself, if I’m gonna survive, I have to really study business. I have to study how to run a restaurant,” he told me during a phone call in April.

Dave Willocks of The Baker's Table in Kentucky

Part of his restaurant education came from conversations with The Baker’s Table’s most loyal diners, many of them from nearby Cincinnati. He invited them in for an espresso and a snack and asked them what they loved about the restaurant and how they could base the restaurant around what diners want, he said.

Diners were looking for a stronger relationship with the restaurant. Someplace where they were known. Dave wanted to deepen relationships, too, and find stability in this inherently unstable business.

“The membership as it exists right now really came out of those conversations,” he said. “The normal restaurant model is butts in seats, right? You want to do as many covers as humanly possible every week, every month, every day. Do whatever you have to do to get those covers. You don’t really know where they’re coming from, but you just hope they’re coming. So we started reimagining.”

Dave introduced the idea of a membership program during those conversations with diners and got a positive response. But he was surprised by the immediate interest he saw. They got about 25 sign-ups 24 hours after opening memberships, which launched in June of last year. Currently, they have about 78 members who pay $180 a month. In return, members receive $200 each month to spend on their house account. (They still welcome traditional diners, and Dave said being named a James Beard semifinalist for best regional chef has helped boost that traffic.)

The restaurant works to develop a personal relationship with each member. For the restaurant, that means “really detailed, meticulous notes about our members.” Allergies, spouses’ names, family members’ names, table preferences. The restaurant works to remove all friction points, including the bill, which is automatically put on the member’s account, said Dave.

“I think the center of it all is changing the orientation of the restaurant’s focus from turning tables of miscellaneous faces that we don’t know to developing deeper relationships with people that really vibe with where we’re at,” he said.

The tech side of membership is managed by The Third Place, which also offers services like marketing and e-commerce to restaurants. CEO and Co-Founder Vivien Sin views restaurant membership as a way to help diners break away from the social media culture, “where it’s about checklists, it’s about hitting as many restaurants as possible,” she said. “It’s actually a different level of joy when you also develop depth with a restaurant and repeatedly see it throughout a chef’s journey.”

While restaurant membership got some buzz shortly after the pandemic, it hasn’t caught on widely, which surprises Dave. It’s the business model he’d recommend to others in the industry, he said.

“Running a restaurant is so hard right now, and this membership program really changes everything about the back end of how your cash flow works,” Dave said. As he studied the model, he realized, “I know what my expenses are. If I got to a certain number of members, I would open the month automatically profitable, and that is the idea that blew my brain.”

He insists that membership could work at almost any restaurant.

The hardest part might be explaining the value proposition to potential members and marketing the membership program. Marketing, he said, was part of his restaurant education after COVID.

Membership “requires being more thoughtful” and asking, “‘What is your experience? What is the nature of what you’re offering? Why would someone want to come back?’ You have to answer those questions first, which, if you’re a business, you probably should,” he said. Restaurant membership “is something that I would love to see exploding nationwide, but it requires doing the work.”