The Best Loyalty Program Costs Nothing

The Complexity of a Loyalty Program

A few years ago I helped build and run a loyalty program. With my team, of course, I want to be clear about that before anyone thinks I was doing this alone in a basement somewhere.

You'd think collecting and redeeming points would be fairly straightforward. It is not.

What type of catalogue do you offer? Managing a product inventory worth redeeming is its own operational nightmare, so you need a vendor who can handle fulfillment.

Then there's assigning point values for earning and redemption. Connecting systems. Securing accounts, because points are currency and people will find ways to exploit that. Launching it. Getting people signed up. Getting them to log in. Getting them to participate and earn. Getting them to actually redeem once they've accumulated enough that the finance team starts getting nervous about the liability sitting on the books.

And then there's breakage. I learned about breakage. A certain percentage of customers will never redeem, will eventually churn, and at some point the accounting has to reflect that reality.

Can points expire? Should they? How do you incentivize redemption without cheapening the currency?

You get the idea.

I genuinely loved running that program. It remains one of my favourite stretches of my career - complex, creative, and endlessly interesting.

For all that, I still wonder if we were solving the right problem.

A loyalty program is, in many ways, a manufactured substitute for something more fundamental. It's what you build when you haven't fully solved the underlying problem, which is trust.

I Needed a Trustworthy Mechanic

A couple of years ago I needed to transfer ownership of a vehicle from a family member. Part of the process required a safety inspection. Which meant finding a mechanic.

Most of us tense up at that thought. The industry doesn't exactly have a sterling reputation for transparency. Every time I've gone for a quick oil change, my air filter has been inexplicably dirty and in urgent need of replacement. The trust deficit is real and well-earned.

So I did what any cautious consumer does, I went deep on Google reviews. Narrowed it down to two shops with consistently high ratings and genuinely positive feedback. I Chose Neely Motors and made the appointment.

The garage itself is no frills. Built to do exactly one thing: take care of your car. There’s no fancy waiting room, no coffee bar, and no TVs playing daytime television while you wait.

I dropped the car off. When I came back later that day, the inspection was done. He walked me through a couple of things worth keeping an eye on -  nothing urgent, nothing that needed fixing now. And then he said: if your engine light ever comes on, swing by. We'll take a look. If it's nothing, we'll reset it and send you on your way.

No charge for that. Just an offer.

I was genuinely impressed.

My First Referral

A while later my youngest daughter bought a used car and needed a mechanic she could trust. I sent her to Neely. They treated her well every single visit. Explained things clearly. Did work based on actual need, not opportunity. One visit near Christmas, they took care of a few things and didn't charge her anything.

She brought them a Tim Hortons gift card. And kept coming back.

I've since recommended Neely to multiple friends and family members. Every one of them has had the same experience.

That's a loyalty program. It just doesn't look like one.

The Non-Loyalty Loyalty Program

Neely doesn't have a points catalogue or a redemption threshold or a breakage calculation. What they have is a solution to the single biggest pain point in their industry: they're honest. They do what needs doing and nothing more. They communicate clearly. They treat people fairly.

And that has generated more word-of-mouth referrals than any structured program I've seen, at essentially zero incremental cost.

So what's the loyalty program you could be building?

Be genuinely trustworthy. Not as a marketing position. As an operational standard. Do what you say. Say what you mean. Don't dress up unnecessary work as essential.

Deliver on your promises, every time. The bar isn't excellence on the good days, it's consistency across all of them.

Don't nickel and dime. The short-term revenue from squeezing isn't worth the long-term cost of the reputation it builds.

Solve real problems. Not the problems that happen to help you hit your quota. The ones your customer actually showed up with.

Treat people like they matter beyond the transaction. Neely did a few things for my daughter near Christmas and didn't charge her. She showed up with a Tim Hortons gift card as a thank you. Nobody asked for it. Nobody expected it. That's what genuine goodwill generates, and it outlasts any invoice.

The Loyalty Program That Isn’t One

The best loyalty program isn't a program at all.

It's just being the kind of business people feel genuinely good about recommending.

Neely never asked me to refer anyone. I couldn't stop myself.  

And now I’ve written about it.