E-loyalty marketing for SMEs meets with success
With the recent downturn in the global economy, many smaller businesses are turning to new ways of retaining customers and increasing satisfaction. Despite being traditionally associated with larger organisations, loyalty and e-loyalty programmes are increasing in popularity and affordability among small and medium-sized businesses (SMEs).
Looking back at first principles, and realising that a 5% increase in a company's customer retention rate can nearly double profits over a five-year span, many small businesses are now starting to advance into the field of loyalty. For example, the US-based Unfinished Furniture Depot is a small business that has seen rapid success from a customer loyalty programme.
According to Dave Banko, president of Loyalty Marketing Solutions (which provided UF Depot with its loyalty programme), "The technology we used for UF Depot made it possible to learn about and identify each customer. And by monitoring customer behaviour, it's possible to learn what they need, when they need it, and why they need it." LMS then took the information acquired from the programme and used it to create e-mail promotions targeted at those individuals.
Best channel One successful approach has been to use company e-mail newsletters to communicate with customers. By stressing both an informational and promotional message in each e-newsletter, consumers are more likely to open, read, and interact with each newsletter they receive from the business.
"It is an element of trust between the consumer and the business," explained Banko. "The newsletter's message needs to be informative and useful to the customer for them to read the messages month after month. If it fails to do this, the database will shrink and become much less valuable."
Based on his own experience, Banko says that small businesses are learning that to compete with their big-business competition they need to have marketing strategies like their larger counterparts. And, with the ever-evolving technology behind loyalty programmes, cost of ownership is becoming more bearable for SMEs.