The SaaS-ification of Everything

We all know the popularity of Software as a Service in the technology sector. SaaS went mainstream in 1999 when Salesforce launched its CRM product. Since then, SaaS has taken over the world of technology. SaaS can be liberally labeled as a subscription business model – something that’s been around since the 1600s. Now we learn that the fast-food taco chain, Taco Bell, is following suit and rolling out a taco-a-day subscription model. 

We imagine the thinking behind the offer is to drive much greater frequency among its customer base to their app. Called the Taco Lover’s Pass, customers can order a taco every day for 30 days via the company’s app. The pass costs around $10 a month, though there are some differences depending on the location. 

Yum Brands owns Taco Bell, along with other fast-food brands like KFC and Pizza Hut. In its most recent quarterly report, Yum Brands reported same-store growth was just 5%. This fell well short of the street’s expectations.

Flagging Demand for Greasy Late Night Tacos

Taco Bell has always had a robust late-night and early morning business. When the pandemic hit, those areas of the business struggled. Of course, if you’re stuck inside and not out partying, the need for late-night greasy tacos declines considerably. Apparently, the company tested the subscription model in Arizona and concluded it was a winner with 20% of the subscribers being new to their loyalty program. 

Others in the food space have pursued a similar subscription business. Publically traded Sweetgreen — one of the many healthy salad makers (think Chopt and newcomer Mixt) — recently launched its own subscription service at $10 a month. This deal gives the subscriber $3.00 off every order over $10.00. If you’ve ever been to Sweetgreen, that’s an easy threshold to cover. After a little over three salads, the deal looks pretty tasty. 

There is of course more going on here than just food discounts. The company’s get considerable intelligence about their customer base, their buying habits, and behaviors and a direct communication channel to their customers. With digital ad re-targeting going away, having a direct channel to customers and prospects is vital in today’s digital marketing landscape. 

How Many Is Too Many?

There’s another side of these subscriptions of course and that is the consumer challenge of having too many subscriptions. As we were editing this post, we heard an ad about the TrueBill app. As of June 2021, that company had raised some $85 million from some well-known VCs.

While Truebill positions itself as a personal finance tool, one of its core value propositions is helping consumers — presumably including small businesses — manage their subscriptions in one place. How many of us would have canceled a subscription months ago if we could figure out what we were paying for but not even using. Some estimates suggest the subscription business will grow to $500 billion by 2025. We’re not sure if that estimate includes technology subscriptions or not, we doubt it, but the point is more and more consumers are choosing to turn to subscriptions. 

We don’t know about you, but a Sweetgreen salad sounds like a great option for lunch today. After all, after five straight days of eating tacos at lunch, anything sounds pretty darn good. 

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