Many small business owners may be looking for ways to offer consumers a little better value when they shop there while also promoting repeat business, and as a result, a large and growing number seem to be arriving at the same conclusion: That loyalty programs are the way to go.
Today, some 38 percent of small business owners say that they offer customers a loyalty rewards program of some kind, and another 21 percent say they plan to add one within the next year, according to the latest Local Commerce Monitor survey from BIA/Kelsey Research. However, it should be noted that those numbers are more or less unchanged from the same survey in 2012, indicating that many companies may be spinning their wheels when it comes to actually instituting plans to add these programs overall.
Interestingly, owners estimate that an average of 17.7 percent of their total business over the course of the next year will come from promotions designed to draw in more customer interest, including discounts, coupons, daily deals and the like, which can also be associated with loyalty programs, but do not necessarily have to be, the report said. Among those that already use loyalty programs, 54 percent say they run them on their own internal systems, rather than using punch-cards or the like for consumers to keep track of their own purchases.
"The data indicates solid interest and intentions in loyalty programs, which are becoming an increasingly important tool for customer retention," said Steve Marshall, director of research for BIA/Kelsey. "Going forward, we believe the proportion of business generated from both loyalty programs and promotions will rise significantly, as SMBs increasingly tailor their offerings to frequent customers and specific customer segments."
In the future, it may be possible for larger third parties, including credit card companies, to swoop in and start offering their own loyalty programs which could replace those run by small businesses themselves, thanks to their potentially greater access to sophisticated platforms that individual companies may not have, the report said.
Independent owners looking to make a bigger impact when it comes to retaining customers may want to try to increase their companies' financial standing in another way, such as finding more affordable small business insurance. Paying less for policies including those for general liability insurance or workers' compensation could be vital to giving companies a little more wiggle room where their bottom lines are concerned.