Since I own several locations, and have been an entrepreneur for years, many of my customers ask me general business questions. One that comes up now and then is the use of loyalty programs.
I have never been a fan. The explanation I give is this….
There is a restaurant I would go to every Thursday. The food was great, the service was fantastic, I had my favorite table, they know exactly how I like my food prepared. Now right down the street there is another place I tried, but it was terrible. Food sucked, service was non existent…
So let’s assume they have a loyalty program. I’m not going back to the second place to get a lousy 11th meal after I eat 10 bad ones. And if my favorite place offers a loyalty program, they are just giving away money as I’m going there anyway.
So I feel that loyalty programs are only good for businesses that sell generic items. As an example, if there are two stores, both selling Kleenex and you need to buy some Kleenex – one has a loyalty program that gives you a few cents off on your next gallon of gas, maybe you go to that one if it’s not out of the way.
But we are not Kleenex. We offer a unique experience that no one else can duplicate. Our targets are superior, the experience is superior, and we make sure that people have a fantastic time. In that situation, I feel there is not a need for loyalty programs, as our customers are loyal to the experience – not a punch card.
If you do want to run a simple loyalty program, it’s cheap to print up punch cards, then just get a custom punch that you can use to punch them out. I would not do electronic loyalty programs.
Half the idea is the customer has this card in his wallet, and a month from now while fumbling for his drivers license, he stumbles upon it and says… “Oh yea. Axe throwing… that was fun. I should go back tonight. Hey Bob, whatcha doing tonight.. wanna go axe throwing?”