Why is the loyalty program good for small entrepreneurs?
Any loyalty program is based on a simple philosophy. It is primarily due to the tie of the customer to the brand, and thus the company will increase its sales. It is a joint transaction, which benefits both parties. All large corporations have built their brand on loyalty programs. So why shouldn’t small entrepreneurs take advantage of their experience?
Effective weapon in an uneven battle
Micro companies have it certainly much more difficult in the market fight competing with much larger brands with developed infrastructure, vast product offer, powerful marketing resources and the ability to offer lower prices. To increase their chances in a ruthless fight for the client, small companies should benefit from good loyalty programs that showcase their strengths and increase their chances in areas dominated by global corporations.
Engaging through rewards
According to a survey carried out by Manta and BIA / Kelsey , for the first time, small entrepreneurs have noticed the fact that a large base of loyal customers has a huge impact on the long-term profitability of the company. As much as 64 percent of micro entrepreneurs claim that well-designed loyalty programs are extremely successful in increasing the company's revenues and its development in many business areas.
As we read in the Manta and BIA / Kelsey report, which was based on 1000 surveys conducted among small business owners, loyal customers spend 67% more time on shopping than new consumers. For this reason, regular customers should be specially rewarded by entrepreneurs, because keeping them is much less expensive than acquiring new ones. The implementation of appropriate loyalty programs by small entrepreneurs should be not only a sign of acknowledgment for regular customers, but also a way to motivate them to continue acting as a brand ambassador and promoting it among family members, friends and close or distant acquaintances. Such activities will allow small business owners to build an even larger group of loyal customers focused around specific products or services, while saving them the costs of advertising and PR campaigns, which very often are not even half as effective as a well-prepared loyalty program.
Digital solutions will save your budget
Contrary to appearances, the implementation of a loyalty program by small companies does not have to be associated with huge costs being a heavy burden for already modest micro-entrepreneur’s budget. For instance, small businesses can take advantage of the opportunities offered by the available mobile network and advanced applications for mobile devices. In the West, small entrepreneurs use many digital solutions that enable them to keep customers longer with them. These include applications such as Belly, PunchTab or Perville, allowing customers of small businesses to earn points for making purchases using a smartphone. The monthly cost of a subscription of such an application starts from just USD 50, so about PLN 182. Such solutions save not only money, but also time spent on printing, for example, all kinds of paper discount cards.
Conversion of sales and promotional tools
Until a few years ago small and medium-sized companies as part of their loyalty programs most often used the following solutions to reward their regular customers: price reductions and discounts (61 percent), non-cash prizes (52 percent), coupons (25 percent). and discount cards (11%). Currently, small entrepreneurs, as well as the majority of market players, switch from traditional forms of sales support (e.g. scratch cards, stamps, etc.) to new technological solutions (e.g. comprehensive online platforms) that allow them to optimize costs. Thanks to such innovative tools it is possible to gather and analyze detailed information about clients and to arrange for constant communication with them and more effective actions aimed at even greater involvement of clients in the brand's activity.