Should we offer a loyalty program to customers?

There is a restaurant I would go to every Thursday. The food was great, the service was fantastic, I had my favorite table, and they knew exactly how I like my food prepared. Right down the street, there is another place I tried, but it was terrible. The food sucked, service was nonexistent…

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 no need for loyalty programs, as our customers are loyal to the experience – not a punch card.