NetNewsCheck reported on the big opportunity for SMBs to create and profit from customer loyalty programs. Mobivity’s Stamp was prominently mentioned.
Here’s the article:
By Michael Depp and Eric J. Smith
Small businesses continue to be enamored with customer loyalty programs — with 38% currently offering such a program and another 21% planning to offer a loyalty program in the next year — according to new data from BIA/Kelsey. The findings are broken out from the company’s “Local Commerce Monitor,” its ongoing study of the advertising behaviors of SMBs
Small businesses estimate 17.7% of their total business in the next 12 months will be generated by customer acquisition promotions such as discount deals, daily deals, coupons or similar offers, BIA/Kelsey found. These promotions may or may not be aligned with 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 for 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.”
Many of these loyalty programs are relatively unsophisticated, using paper-based methods, such as punch cards.
“In my mind that is driven directly by the fact that over half the programs extant that are being run by SMBs are home grown and therefore not very sophisticated and probably don’t tie in to other systems like CRM systems,” Marshall said in an interview.
BIA/Kelsey found that 54% of SMB loyalty programs are home grown. Just 38% of SMBs with home grown programs have an electronic tracking method.
Only 6% said their loyalty program is provided by a credit card company and is linked to the customer’s credit card. Another 6% offered a loyalty program provided by a third party other than a credit card company, including a new players in the space such as Stampt, FiveStars, Belly and Open Table.
Marshall says that opens up a large opportunity for service providers and credit card companies to enter the space and provide SMBs with more sophisticated platforms that link into a CRM system or a payments platform.
Many SMBs find loyalty programs come with inherent difficulties, with 56% of respondents agreeing with the statement that the identification and/or record keeping requirements of our customer loyalty program should be much simpler.
“That’s another reason why we believe there’s a third-party opportunity here,” Marshall says. “As long as there’s no great pain of implementation — it can be run off their POS and/or links in easily to some kind of CRM or customer list management or email program.”