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Loyalty programs off the rails

I received an email from a local chef who operates four nice restaurants in San Diego. They’re pricey, have generally good food, although not the very best in the area. I had thought the email was an April Fools joke, but it was only May 27.

Hi Phil Baker
While many of you have asked, until now, we have never offered House Accounts at our restaurants. To celebrate the soon-to-open Le Coq joining our restaurant family, we are releasing a limited number of these special accounts. With a good house account, your experience can be just a little different.– book on a private concierge line – park with complimentary valet – enjoy tableside caviar bumps by chef –This is a chance for us to connect with our local community, to create dining establishments tailored to our neighborhood, where familiarity reigns supreme, and your name and preferred dish are second nature to us.
Cheers & Love,
Brian Malarkey

I thought it might be like a loyalty club much like we have with airlines, fast-food restaurants, and retailers, perhaps costing as much as $100 per year. So I clicked for more information and discovered three tiers ranging from $2500 to $10,000 per year. The fee can be used to offset dining costs at his soon to be opened steakhouse, Le Coq. Here are the details of his top tier.

$10,000.00 Lovers Tier

  • Restaurant Credit for $10,000, Redeemable at Le Coq
  • Pre-Opening Dinner Invite (2 guests)
  • Grand Opening Party Invite (2 guests)
  • First Look for Menu Changes at Le Coq
  • Concierge Line with Priority Reservations
  • 7% Off Private Event Bookings, up to $10,000 F&B
  • 2024 Animae Charity Dinner Invite (2 guests)
  • Free Valet & Caviar Bumps at Le Coq
  • French Wine Club Access

Now loyalty clubs can be a great to bring diners back and to market directly to frequent customers, but this seems like it’s being used to help finance his new restaurant by asking for many thousand of dollars in advance, before the restaurant has even opened and before even seeing the menu or tasting the food. And referring to his opening note, I’d like to know how many have actually asked for this program.

Now if an airline decided to do this, I could imagine how it would work:

Join our airline loyalty program for only $10,000 and get the following benefits:

  • Airline credit for $10,000, usable for airfare within one year subject to certain blackout periods
  • Early boarding for two
  • First look at our new routes before we share them with others
  • A special phone line that guarantees you can reach an agent within 30 minutes. If it takes longer just try the next day.
  • Free fist bumps from the pilot during boarding, and shout outs from flight attendants.

Loyalty programs seem to be everywhere, from supermarkets to fast food restaurants to department stores. If you google loyalty programs, you’ll find dozens of companies selling their programs to retail establishments, so apparently it’s been big business. But in reality it’s simply a small rebate back based on what you spend, either in credits or discounts, and it’s rarely more than 2 percent. Basically you’re allowing a company to track you at every transaction in exchange for a few cents. Yes, we sell our privacy for pennies. That information is then used to help the store track and market to us.

Frankly I’ve given up on airline loyalty programs where we get rewarded for how much money we spend, paid in points that decrease in value over time. I know of few frequent flyers that have loyalty to any airline these days. Instead I use a bank credit card, such as a Chase Sapphire card, to earn my rebate in currency that is less likely to diminish over time.

But there is one feature that would get my loyalty if it were offered by an airline:

We’ll get you to your destination on time. If there’s a delay we will put you on the next flight out, ours or a competitor’s at no extra charge. If there’s an overnight delay we’ll pay for your hotel, Uber, and food.

This is what we used to get in exchange for buying a ticket.

It used to be the companies went out of the way to earn our loyalty not something we paid for to receive a few perks and be called loyal.