Last week Dinner Lab, a subscription supper club that puts a new twist on dining, announced it is dropping its membership fee, says The Times-Picayune. Started three years ago in New Orleans, Dinner Lab is a “nomadic dining experience” where members get delicious multi-course meals prepared by visiting and rising chefs in unique pop-up locations in 31 U.S. cities.
Dinner Lab’s new subscription model offers two tiers: a free tier, Dinner Lab Member, and a paid tier, Dinner Lab Select Member. The free tier allows member access to attend upcoming events at full price. The Select membership, however, has additional perks:
- One week advance notification of events with an early sign-up
- Invitations to exclusive events including:
- Happy hours
- Chef demos and classes
- Chef access events
- Chef’s table events
- Wine dinners
Prior to this change, Select members paid $125 to $175 – price varies by location – for an annual membership which puts subscribers on an email list to let them know about upcoming dinners. Guests register in advance by buying tickets, paying between $50 and $80 for each dinner, which includes five or more courses, beverages, tax and tip, according to Forbes.”This is a way for us to bring more people into our community,” explains Brian Bordainick, CEO of Dinner Lab. “This gives us the ability to ramp up the events and diversify the experience. We want to get people to interact with the brand.”The evolving membership program will help Dinner Lab grow its membership, and give it the ability to expand to new cities and add to its current offerings. According to Entrepreneur, Dinner Lab is currently hosting about 25 and 30 dinners a week, and it hopes to triple that number by the end of 2016.”Obviously, membership fees are great for a business’s bottom line because it is pretty free cash flow,” says Brian Bordainick, Dinner Lab’s founder and CEO. “Getting more people in the door is 100 percent the focus for us.”Insider Take:This is an oddly timed move for Dinner Lab, especially since it recently completed a $7 million round of funding. At that time, Dinner Lab had 25,000 members. Though Dinner Lab does not offer refunds on membership, it will be interesting to see how many of its paying members will opt for the free membership tier at renewal and how the drop in revenue will impact the company.According to a TechCrunch article about the latest funding round, Zach Kupperman, co-founder of Dinner Lab, said the company makes a little money off of the events themselves, but most of its profits come from the annual membership fees. The company must anticipate that additional volume and exposure, as well as a beefed up Select membership, are worth the risk of the potential revenue loss.Is dropping membership fees a trend? Jet.com, an online shopping site that competes directly with Amazon, recently dropped its membership fee too. After only three months in business, Jet dropped the fee, causing us to question if its business model was viable at all.Though the move to drop the membership free is similar with Dinner Lab, the primary differences are cost and track record. Dinner Lab’s membership fee was higher, perhaps helping it reach a different demographic, but it also had a solid track record – and lots of financial backing – to prove that it’s got a viable product.We’ll keep an eye on Dinner Lab to see how it fares under its new model, and we’ll report on any additional subscription and membership companies making similar moves.~ Dana E. Neuts, Subscription Insider
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