QFO: “Since most loyalty programs involve some sort of comp (discount) what do you propose instead as the incentive?”

Answer: Whatever the Guest actually wants — except your margin.

The assumption embedded in the question is that the incentive has to be financial. That Guests are loyal because of what they save. That the relationship is sustained by the discount. That without a monetary offer, there is no reason to come back.

This assumption is wrong. And it is expensive.

Loyal Guests — the ones who come back consistently, who tell people about the operation, who would be genuinely upset if you closed — are not loyal because of the discount. They are loyal because of what the relationship produces for them that they cannot get anywhere else. They are looking for things that bring value to the relationship, not to their wallet.

The Guest who brings hundreds of dollars of business every week is not asking for a free cup of coffee. They are asking to be known. To be recognized as the person who chose this operation consistently and whose loyalty was noticed and honored in a way that reflects the value of the relationship.

What Loyal Guests Actually Want

The operator who wants to replace discounts with something that works needs to first understand who their Guests are and what they value. Six questions that the loyalty program never asks:

Who are they? Not a demographic category. The specific people who choose this operation consistently and the specific reasons they do.

What do they want from the relationship? Not what the loyalty program offers. What the Guest actually values in their ongoing relationship with the operation.

Where are they? In the market, in the community, in the context of their life that brings them to this operation.

Why do they choose you? The specific reason this operation rather than any alternative. If you do not know the answer to this question, you do not know what you are actually selling.

When do they visit? The pattern of their relationship — frequency, occasion, daypart, party size.

How do they feel about the experience they receive? Not the survey score. The honest read of what the relationship is producing for them.

The answers to these six questions are the loyalty program. Not a points structure. Not a frequency scheme. The specific, personal response to what specific Guests actually value.

What That Looks Like In Practice

Members-only events. The regular Guest who gets invited to the wine dinner before it is open to the public has been told: you matter enough to be included before anyone else.

First access. The regular who gets early access to the new menu, the seasonal special, the limited offering — before it is announced broadly — has been given something that money cannot buy: the feeling of being inside rather than outside.

Genuine acknowledgment. The card signed by the entire cast thanking the Guest who has been coming every Friday for two years. The acknowledgment that their presence was noticed and valued — specifically, personally, in a way that demonstrates the operation was paying attention.

Input into the process. The Guest who is asked what they would like to see, whose preference was recorded and actually acted on, who walks in one day and finds that something changed because they mentioned it — that Guest has a relationship with the operation that a discount program cannot produce or sustain.

Why Discounts Make It Worse

Marty Neumeier identified six reasons loyalty programs built on discounts fail, and all six are still accurate:

Discounts train existing Guests to expect lower prices and wait out normal pricing. They attract loyal Guests who would have paid full price anyway. They discourage new Guests who feel excluded from the program. They invite competitors to match the offer. They compress the margin. And the compressed margin reduces the operation’s ability to serve Guests at the level that produced the loyalty in the first place.

The discount program is a loop that starts by undervaluing the relationship and ends by undermining the Guest Experience that relationship was built on.

Loyalty cannot be programmed. It can only be earned — one visit, one interaction, one genuine expression of the relationship at a time.

What Changes Tomorrow

Identify your three most loyal Guests — the ones who come most consistently, spend the most, and tell the most people about the operation. Ask yourself: what does this operation provide to them that they cannot get anywhere else?

If the answer is “a discount,” the loyalty program is doing the work and the relationship is not. Remove the discount and find out what is actually there.

If the answer is something specific and relational — the table they always sit at, the server who remembers their order, the experience that fits something specific in their life — that is the loyalty program. Build more of it.