It’s a dog-eat-dog world, especially for independent retailers. With big-name box stores popping up across the country, independent retailers might seem like small fish in a growing pond. How can independent retailers stand up to the big dogs?
One way to combat the competition is through customer loyalty programs.
To better understand customer loyalty, consider the local stores you shop at most — the products they sell, their location, and any other perks that helped secure your loyalty to that place of business. What keeps you going back for more?
Small businesses of all types are implementing customer loyalty programs, also commonly known as frequent buyer programs, to keep driving customers through the doors.
Check out these tail-wagging benefits of frequent buyer programs.
Retain Local Customers
One of the more obvious perks of frequent buyer programs is customer retention. Customer loyalty programs are a great way to develop a more dedicated customer base. These programs are especially beneficial for small businesses looking to make their mark in the surrounding community.
According to Shift Workspaces, a local business will generate “70% more local activity per square foot than a big box store.” This means that as an independent retailer and a well-known local staple, you’ll see more members of the community in your store — you just have to find a way to keep them there!
With this information, you can infer that frequent buyer programs allow independent retailers to establish more personal and lasting relationships with their customers.
Build Valuable Relationships
From a social perspective, the more you see someone, the more likely you are to establish a relationship with that person. The same concept can be applied to businesses and their frequent buyers.
Frequent buyers are extremely valuable to small businesses, and establishing long-term relationships with such individuals saves your business money in the long run. As Harvard Business Review highlights, customer loyalty is so important because “with each additional year of a relationship, customers become less costly to serve.” The benefits of making life-long customers don’t stop there — over time, these buyers refer others to your store as well, helping you grow.
Just as with any relationship, the relationship between a merchant and a customer is a two-way street. Utilizing a customer loyalty program to reward the now-established relationship with a frequent buyer repays the buyer for their loyalty.
In simpler terms, just as dogs are man’s best friend, frequent buyers are a small business’s best friend.
Other Factors that Make Frequent Buyer Programs Beneficial
Companies have their pick of the litter when it comes to loyalty programs as there are several types, each with its own advantages. However, loyalty programs are not one-size-fits-all. There are some things to consider before deciding which type of frequent buyer program is best for your business.
Generational Differences in Customer Loyalty
It’s a rather well-known concept that different generations have different consumer behaviors and, therefore, have differences in customer loyalty. As an independent retailer, it is important to understand the demographics of your community to better serve your target customers and encourage loyalty.
According to a KPMG survey, 78% of millennials say they would switch to a company that offers a better loyalty program. Knowing this, an independent retailer in Austin, Texas, where the median age is 33.7 years, may choose to implement a different frequent buyer program than an independent retailer in Vero Beach, Florida, where the median age is 55.4 years.
Customer Loyalty Post-Pandemic
When adopting a frequent buyer program into your consumer loyalty strategy, it’s important to factor in the effects that the COVID-19 pandemic had on consumer shopping habits.
A McKinsey survey reported that 75% of consumers tried a new shopping behavior, from e-commerce to curbside pickup to shopping local (an obvious win for local businesses) over the course of the pandemic. This was largely due to a shift in consumer behavior.
A US Chamber article explains that during the pandemic, the shift in consumer shopping habits was largely due to the search for convenience and value.
In response to this behavioral shift, companies are then able to leverage frequent buyer programs and expand their market share. You can take advantage of this shift as an independent retailer as well. Frequent buyer programs can make shopping at your store more convenient and value-rich for local customers.
Takeaways to Pack in Your Doggy Bag
Adopting a frequent buyer program is a great way for independent retailers to capitalize on customer loyalty. Connecting with consumers in the local community provides small businesses the opportunity to establish valuable relationships that, in turn, can increase customer retention.
When implementing a frequent buyer program, it is important to consider local consumer demographics. Different age groups have different consumer behaviors — especially after the global pandemic — and you should make decisions about your consumer loyalty strategy accordingly.
Astro Loyalty is more than happy to help all of the hardworking independent pet retailers of the world get started with a frequent buyer program today. Learn more about Astro and what we can do for you!
