Loyalty: Red Lobster Nation

We talked about loyalty programs this week. I talked about the feebleness of points and percentages off. Here's Red Lobster Nation.

Earn points, get dollars off your meal.

A question.

Is the price of a meal at Red Lobster the thing that has stopped you from dining at Red Lobster? Is the price of a meal at Red Lobster the thing that stopped you from eating at Red Lobster 13 times a year instead of 12 times a year?

A loyalty program should be designed to solve a problem. What is the core problem that Red Lobster has?

• Is it that restaurants need to be renovated? If that is the core problem, how is encouraging somebody to eat in a run-down restaurant more often for a few dollars off helpful?
• Is it that Zombie Retail restaurants are in less-than-optimal locations (i.e. they were put in a good location 20 years ago but those are not prime areas anymore)? A loyalty program won't solve this problem.
• Is it that the food is too expensive? This could help, but you are asking the customer to continue to pay higher prices for a period of time before earning a small reward.
• Is it that the service is poor? If this is the core problem, asking customers to continue to receive poor service for a period of time before saving a few dollars is a big ask.
• Is it that Marketing is out of ideas? If this is the core problem, this could be a solution.
• Is a Management Consultant involved? If this is the core problem, we all know the appropriate course of action.

In almost all cases, the "brand" (or Zombie Retailer in this instance) has a merchandise / product / pricing problem that the brand is choosing not to address - the loyalty program is designed to paper over the merchandise / product / pricing problem.