Loyalty programs off the rails

I received an email from a local celebrity chef who operates four restaurants in the San Diego area. They’re pricey, have generally good food, although not the best in the area. At first I had thought the email was an April Fools joke, but it was only March 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 effective for bringing diners back and marketing directly to frequent customers, but this one appears to be used to help finance his new restaurant by asking for many thousand of dollars in advance, before the restaurant has even opened and before it’s been reviewed. Referring to his opening note, “While many of you have asked….”, I’d love to know how many have actually asked for this program. I suspect many of those that join are buying recognition to impress their friends and show they’re someone special.

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 plus two more strangers you pick from the last boarding group
  • 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 our 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 a big business. But in most cases it’s simply a small rebate back based on what you spend, either in credits or discounts, and it’s rarely more than a couple of percent. In the case of the restaurant, it’s paying up front to be recognized, get special treatment, and perhaps avoid a $10 valet fee.

Frankly, I’ve given up on airline loyalty programs where we get rewarded for how much money we spend and paid in points that always decrease in value over time. I know of few frequent flyers that have much loyalty to any airline these days. Most seem to be using a bank credit card, such as a Chase Sapphire or Amex card, to earn rebates in currency or points that provides more flexibility and greater value.

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. If there’s an overnight delay we’ll pay for your hotel, Uber, and food.

Come to think of it, isn’t that what we used to get in exchange for buying a ticket?

Companies once went out of their way to earn our loyalty. Now we have to pay them extra to be loyal to us.

by Phil Baker

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