Want success in XaaS? You need a Daily Taco

Taco Bell recently announced it's new Taco Pass offer after a brief pilot late last year. For $10 US, subscribers get one taco per day.

?This isn't necessarily a brand new idea, as Panera has had a coffee subscription for some time now (only $9 US monthly for unlimited coffee and tea!).

?But it is proof that subscriptions are here to stay, and reaching into every sector.

?What does that have to do with XaaS offers?

?As-A-Service research group TSIA created the LAER (Land, Adopt, Expand, Renew) model, which captures the pathway that recurring revenue models can translate into significant benefit to consumers and producers alike. As more and more of our industry moves in this direction, we all must understand this dynamic and internalize it.

Taco Bell can count on $10 per subscriber per month as long as a subscriber is on the service. And if the subscriber consumes 0 tacos, that $10 is largely profit.

But that's not what Taco Bell wants - it wants consumers to come claim their daily taco.

Even though COGS/Cost to Serve rises with each taco consumed, each transaction very likely carries with it incremental add-ons like drinks, added tacos, and so on. And capturing data through the digital experience allows Taco Bell to drive consumption, almost at will through targeted offers and value-adds for being a subscriber.

This mirrors the "loss-leader" concept that retailers have used for decades - attract traffic to the store/website with money-losing offers, knowing that once there shoppers will consume other items that are profit making.

Only low-friction, digital experiences, coupled with data insights and AI take this simple idea to an entirely new level.

That's what every XaaS offer needs to find - it's daily taco - the low friction way to "land" consumers into the platform so a richer, more valuable relationship follows.

?https://www.cnn.com/2022/01/06/business/taco-bell-subscripti...