NETTING IT OUT

Although discounts and free merchandise don’t train customers to be loyal, it does get them through the door. Once they are there, providing a great customer experience brings the desired loyalty.

DISCOUNTS + QUALITY SERVICE = LOYALTY

In July 2009, I believed I was about to prove the point I had made in my report ¹ on loyalty programs that discounts and coupons merely encourage customers to “game” the system and try to get something for little or nothing. It doesn’t lead to true loyalty.

A local (greater Boston area) sports bar/restaurant chain, the Halfway Café, seems to be suffering from the lack of disposable income on the part of customers, because it is advertising heavily and offering significant specials and discounts. The most recent was the entire menu for half price on a Monday and Tuesday. Heck, I thought, half price on not particularly expensive pub food sounds like a great deal. I’m in.

Although I had been to the Halfway Café a few years ago, I am not a regular customer, so the discount offer did entice me back, but I firmly believed that I was just in it for cheap grub.

Well, when a friend of mine and I got there at 5:00 p.m. (we figured we’d avoid the dinner rush), we quickly discovered that a lot of people had the same thought, and we faced a half-hour wait. We decided the half-price offer was worth the wait, and we found a corner where we could hang out and wait.

Almost immediately, a waitperson came over with a bowl of popcorn and encouraged us to order drinks while we waiting. We anticipated a long wait for said drinks, but the bartenders served those of us standing quickly and with great good humor. So, with the hunger rumblings eased, and a drink in hand, we enjoyed our wait by people watching. After a shorter-than-anticipated wait, our name was called, and we were shown to a booth.

The dining room was packed. I expected that wait staff to be overwhelmed and grumpy, but they were, in fact, pleasant, helpful, and quite speedy given the volume. In addition to trying to drum up new business, the half-price event also introduced a new menu (about a quarter of the dishes were new and at very reasonable prices). Our waitress obviously had tasted all the new items and was happy, and excited, to tell us which were her favorites.

Food was delivered quickly and was quite tasty--admittedly, it was good pub food rather than great restaurant fare, but a complete chicken dinner for $5 (with discount) can’t be beat. The dining room was humming as was the waiting area, which now had almost an hour wait, but we never felt rushed or ignored.

When we left, the hostess asked if we enjoyed our dinner and said that she hoped to see us again soon. I said that we would return the next day to take advantage again of the discount. She seemed delighted and told us that if we came between 2 and 4:30, we shouldn’t have any wait. So I did, on my own. The hostess recognized me and laughed when I arrived at 4 p.m. the next day. As promised, I was seated immediately in a booth that fit four people. I ordered two meals so I could take one home as leftovers. The waitress thought that was a great idea, and spent some time asking me what I had ordered the day before and how I had enjoyed it. By the time I left, there was, again, a wait for seating, yet I was never encouraged to vacate my booth in favor of a party of four.

As a result of two (or, rather, three with leftovers) tasty dishes and the excellent customer experience, I have now put the Halfway Café as one of my go-to dinner spots, even at full price.

So, I guess I have to modify my views on discounts not being a great way to achieve customer loyalty. Discounts can be a great enticement for new or renewed business. Then, if it is combined with a great and personable customer experience, it can, indeed, lead to profitable longtime customer relationships.

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1) See " Do Rewards Programs Foster Loyalty? Only If You Address Customer Scenarios ," by Ronni Marshak, July 9, 2009, .
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