Everyone wants recurring, predictable revenue, and the pull of reliable income has been strong enough to turn nearly everything into a subscription program: toothpaste in glass bottles, delivered meal kits, toys for dogs, and of course—coffee beans, or coffee pods, or frozen coffee pods. There are many kinds of coffee subscriptions.
But subscription models for coffee shops—like actually visiting a shop in person—haven't really caught on. There's no winning framework for coffee shop subscriptions like there is for subscribing to a roaster online. But the dream of recurring revenue for the in-person cafe experience is alive and well among operators and leaders.
That's why I wanted to talk with Patrick and Krystal Burns. For nearly a decade, they've run Palace Coffee in Amarillo, Texas and built out a membership program that goes beyond discounted drinks. They've refined their program a lot over the years, and it's fascinating to learn how they've adjusted pricing, perks, marketing, and operations to keep the program going and profitable.
Thanks to this season’s sponsor, SumUp, a modern point of sale system for cafes.
What You'll Learn
- How Palace Coffee transformed a traditional "mug club" into a sustainable membership program that generates predictable revenue
- The economics behind pricing an in-person coffee subscription and the calculations that make it profitable- Why community events became a powerful differentiator in their subscription model
- How to balance discount structures without sacrificing profitability
- The recent evolution from an annual membership to a monthly subscription format- The technology and operational systems needed to manage a coffee shop subscription program
Chapters
00:00 Introduction to Palace Coffee and Community Focus
05:58 Building Community Through Membership Programs
12:13 Adapting to Change: Lessons from COVID-19
18:00 The Future of Palace Coffee's Membership Program
31:49 Navigating Customer Engagement and Feedback
39:40 Expanding Community Connections
47:21 The Origin Story of Palace Coffee
53:09 Theater as a Reflection of Life
Where to Find Our Guests
Email Patrick -- patrick@palacecoffee.co
Mentioned In The Episode
Per Diem (mobile ordering app w/ subscription management)
Cinemark Movie Club (inspiration for their subscription model)
*The Coffee Think Tank podcast is a show about trends, ideas, and innovations in coffee by Fresh Cup, hosted by Garrett Oden. Subscribe to Fresh Cup for more industry insights at freshcup.com