Today’s market can be tough for small and mid-tier businesses, because big-box stores often dominate consumer attention with low prices and large inventories. While 82 percent of small business owners admit loyal customers are the main way they grow their businesses, 61 percent of retailers say customer retention has become more difficult and building customer loyalty is challenging. To compete, smaller businesses are required to think smarter where big-box retailers think larger. That’s why loyalty programs are more important for small and mid-tier businesses than ever before. Here are six tips, identified by Chris Wuhrer, senior vice president of strategic initiatives and product marketing at Cayan, to help small businesses drive loyalty.
Click through for six tips that can help SMBs build customer loyalty, as identified by Cayan.
Listen to your customers
Seventy percent of customers cite poor customer service as a reason for not buying from a brand. One way to combat this is to solicit feedback and identify meaningful opportunities to improve your customer experience. An open and active dialogue with your customers affords your business the chance to better understand your customers and evolve with them.
Customers appreciate the opportunity to provide feedback, and will feel much more connected to you when they see their suggestions come to life. For example, in response to negative feedback about its pizzas, Domino’s recently reformulated their recipes from the bottom up and released a video showing the brand in a more human light. The campaign helped the brand better connect with their customers by demonstrating that they value their feedback.
Use customer data as your compass
It’s important to understand your target customers and their shopping preferences; a recent loyalty report found that a “totally satisfied customer” spends 2.6 times as much as a “somewhat satisfied customer.” Data can help small businesses identify customers who fit into these categories and provide them with the type of experience that builds loyalty and increases their lifetime value for your brand. When possible, embrace data, identify your best customers and learn what motivates behavior, because this knowledge will help guide your loyalty program.
Employ technology to develop loyalty
Most small and mid-tier businesses can’t experiment with a lot of new technologies, since this can be time-consuming and expensive. One way to balance risk and reward when it comes to technology is to focus only on those solutions that can improve your relationship with customers. For example, with 1.4 billion smartphones in the world, there’s a major opportunity open for mobile loyalty programs. Seventy-three percent of smartphone users say they are interested in interacting with loyalty programs through their mobile devices. With research showing 75 percent of business leaders are expanding their use of digital channels to deliver targeted and personalized offers to customers, it’s important to look for meaningful technology-based loyalty programs that can help you stand out.
Embrace social media
Almost 75 percent of Americans use social networking sites. To build loyalty with your customers, engage them where they already are. Nearly four out of five people say they would like to receive offers, promotions and information about events from the companies they follow on social media. Take advantage of this fact and give the people what they want by providing in-store benefits to loyal customers who “like” your business online. Many stores and brands are finding ways to use social media to bring customers into the store, from the more common tools, such as a discount for “liking” a page to more unique tactics like those employed by Lay’s, which had fans vote on a new chip flavor for the company to produce, increasing their affinity for the company by giving them a say in new products.
Adopt an omni-channel marketing approach
Consumers are constantly bombarded by media on their smartphones, tablets and computers. While this can be a huge opportunity for businesses to reach an “always on” audience, it also means that they have a lot of competition. Small businesses in particular may struggle to break through the noise. But it’s important to figure out how to reach consumers online effectively, because 75 percent of consumers say they would switch brands if offered real-time discounts and promotions delivered via smartphone while shopping.
Small businesses should look to location-based push notifications and personalized deals as ways to differentiate. Macy’s, for example, uses iBeacon technology to provide participating customers with deals right when they step through the door. Effectively utilizing the available channels to reach your customers can grab their attention, and adding targeted offers may win their wallets, too.
Reward your customers the right way
Loyalty programs should be customized to your business and your customer base. Sixty-nine percent of consumers say their choice of retailer is influenced by where they can earn customer loyalty or rewards program points. Even a simple loyalty program can be a big win for a small business when done right, resulting in more customers, higher sell-through and increased profitability. The key is to give your customers something suited for their own personal needs, such as targeted coupons. Providing your customers with offers that show you understand who they are and what they really want is the best way to build long-term loyalty.