Small Businesses Stay Loyal to Customer Loyalty Programs

Loyalty programs continue to help small- and medium-sized businesses generate regular customer engagement, according to a recent survey. It’s a model that works in associations too.

If you were to audit the contents of your wallet, chances are good that you’d find at least one grocery store rewards card or frequent-visitor punch card—those ones where, after you buy five ice cream cones, the sixth is free. Possibly, you’d find quite a few more than one.

Loyalty programs like these have been around for a while and likely won’t be going anywhere anytime soon, according to recent research.

A BIA/Kelsey survey of small- and medium-sized businesses (SMBs) found that 38 percent of small businesses offer some kind of loyalty program, with an additional 21 percent saying they will probably start one in the next 12 months. Those numbers are nearly identical to surveys from years past, the group reported. Small businesses also estimated that over 17 percent of their total business would be generated by customer acquisition programs such as discounts or daily deals, which may or may not be part of a loyalty program.

“The data indicates solid interest and intentions in loyalty programs, which are becoming an increasingly important tool for customer retention,” Steve Marshall, director of research at BIA/Kelsey, said in a statement. “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.”

Member loyalty programs are a natural in associations, too, where they can give a boost to meetings and events and increase member involvement in association activities. “In our research we’ve found that most Americans belong to over 10 loyalty programs, and roughly 180 billion memberships and loyalty programs exist in the U.S. alone,” said David Carrithers, founder, president, and managing director of Affinity Center International, which runs a loyalty program for associations. “It’s part of our culture; it’s part of how people do business nowadays.”

A successful loyalty program is one that goes beyond tactical thinking—relying on conferences or products or training seminars as ways to build relationships with members, Carrithers said.

“A well-thought-out, strategic loyalty program allows an association to stand out 365 days a year and allows the member to build positive engagement memories,” he said. “One size doesn’t fit all though, so make sure you are thinking of all your members and what will drive their behaviors. Think through the whole program and build it into the overall value of membership.”

Employing a loyalty program that gives members positive engagement experiences will only benefit the organization, said Carrithers. “Associations will see more committed, proactive members who connect with the organization more frequently, which in turn drives up renewals.”

Despite the benefits, in a recent informal poll of attendees during a session at ASAE’s Annual Meeting & Exposition in Atlanta, “only 13 people out of the 250 there said they offer a loyalty program,” Carrithers said. “Then I asked how many personally, or for the office, are members of a frequent flyer miles or credit card points program, and all but two raised their hands.”

(photo by Nick J Webb/Flickr)

Rob Stott

By Rob Stott

Rob Stott is a contributing editor for Associations Now. MORE

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