BrainTrust Query: Customer Loyalty for Small Businesses
Unlike larger entities,
smaller companies have the unique ability to nurture more personal relationships
when implementing loyalty strategies. They can engage, listen to and empower
the customer — the cornerstone of effective loyalty strategies for businesses
of any size. Instead of focusing on offering rebates and/or reduced pricing
(non-value based selling), they can commit to provide value, strong customer
service and responsive voice-of-the-customer driven communication — all of which
work together to drive engagement and greater loyalty.
Many successful small businesses
also focus on "in the moment" loyalty
initiatives, partly because their employees can have a greater impact. They can
manage their training and buy-in more effectively than larger entities, since
the locus of control is much smaller. They have the ability to be more nimble
and, if they are truly committed and have a full-time employee (FTE) to put against
the initiatives, the ability for them to glean actionable insight. The goal of
all loyalty initiatives is to get back to the "corner store mentality" and
engagement levels of the early mom-and-pop stores — a time when the proprietor
knew more about the interests, attitudes and opinions of their customers than
they know today. The chance for small businesses to be "in the moment" is
Lastly, smaller companies that have more control of their programs
can use value propositions that are easier to understand and resonate better
with their customers. Because of their smaller customer base, smaller companies
do not have to develop programs that have to appeal to more diverse communities.
challenge to smaller companies around driving loyalty programs lies not in
their interest, but the willingness to dedicate an FTE or even half an FTE
is hard given the productivity issues in small America. For example, I was
recently talking with leaders of a small sized construction company who ruefully
acknowledged to me that they had no one on staff to run a loyalty initiative.
In their efforts to hire someone for this capacity, they discovered that because
loyalty marketing is such a complicated field, bringing someone on board can
be very challenging.
The complexity of loyalty and engagement initiatives has
increased, but the returns of effective administration of these programs is
larger than ever before.
- Think your business is too small to implement an effective customer loyalty
strategy? Think again. – The Loyalty Marketer’s Association
Discussion Questions: What advantages may smaller firms have over larger ones in driving customer loyalty? Especially given the more limited resources for smaller businesses, how may loyalty initiatives have to be structured differently than larger entities? How essential is it for smaller stores to put dedicated personal behind loyalty programs?