Although it's been a few days since Burger King came out with its coffee subscription promotion, I keep thinking about it and the irony. It's actually a brilliant idea and the chain probably won't be the one to make it pay off.

Promotions can be clever, like when KFC launched a chicken burger into near space. They can bend genres, such as Pepsi's Uncle Drew movie, which got people to pay for what was effectively a 103-minute movie version of a brand commercial. They can be playfully subversive, such as the rap video employment cover letter put together by copywriter Chase Zreet.

But almost never will you see a promotion that involves a potentially industry-changing innovation. That's what Burger King has come across (and all respect to whoever suggested this, whether someone in the company or an agency that Burger King used).

Fast food apps let people buy things, track their purchases over time, and earn points they can redeem for freebies, whether food or merchandise. It's the way business has been done for a long time. It might have been the arilines that did it first, which is why so many people still nickname such programs frequent flier promotions.

Whatever the case, innovation requires dissimilar ideas to come together in a way that is useful to a community. Burger King just pulled it off. This new promotion is nothing more nor less than subscription pricing in restaurant. People pay for a month of coffee and then get it. At its foundation, this is no different from a subscription to a magazine or pay TV provider or book-of-the-month--whatever-of-the-month--club.

From a fast food chain's point of view, this is brilliant in several ways:

  • There's guaranteed income. People pay up front and then get the merchandise. It improves cash flow and if someone doesn't bother to pick up all the coffee, you get higher profits.
  • Customers can get locked in. They like what you have, want it regularly, and pay in advance, so they have every inclination to keep coming in. That helps keep a more loyal customer base.
  • Subscriptions are hard to get out of because many people forget to terminate auto-pay arrangemenst. Loyalty becomes an obligation to a person's own bank account.

It sounds manipulative because it is. Subscription tactics play on human weakness and generally bank on forgetfulness to keep bringing in money.

However, from a purely manipulative business viewpoint, using it in the context of coffee is pretty damned smart. People frequently will buy other things and you'll likely keep them coming back.

A chain could do an improvement on it--maybe a flat fee for a month of coffees of any size, or possibly a program where you could get a discount on whatever fancy coffee you want if you're buying in advance. Or maybe the chain observes purchase patterns and then sets up a program that seems to offer more in terms of flexibility, all the while informed by data analysis on optimum pricing levels that can withstand the extra use some people might make of it. That's where subscriptions and insurance programs start to look similar. Do it right and most customers subsidize the heavy users.

I don't know for certain that this won't work for Burger King. I've never had their coffee, although I suspect that it might not rank up there with some other chains that focus more on brew. The telling point might be whether people associate Burger King with coffee, or if the company offers the potential variety of a Starbucks, or even a McDonald's with the McCafe line-up.

But I could see this over the next few years as becoming a potential powerful move. Maybe it will be a chain offering a certain number of lunches a month, or a "free" drink with a meal, or something else. Someone could do really well with this. Even a regional chain--or a single-location food business that wants people to keep coming back.

I don't think Burger King will be the one. Then again, it's easy to forget that they merged with Tim Hortons, which has got the coffee and pastry thing down pretty well. This might be the first sign of cross-promotion.

Published on: Mar 20, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.