2020 has been a year of reckoning for most local businesses around the world. The local lockdowns, while designed to help prevent surging infections, had an adverse effect on the local business community. In the US alone, 163,735 businesses had shut down by August 31st according to Yelp’s Economic Impact Report — and 60% of them won't reopen. Businesses such as restaurants, nightclubs, salons, and fitness centers were affected the most, and the scepter of losses and reduced sales will probably continue to affect the local businesses that do survive for quite some time. But amongst the gloom, the pandemic has also invoked some encouraging outcomes, such as the Shop Local Trend, giving local business owners reasons for optimism.
First, there is the advancement of technology and tools that can go a long way in improving the lives and work of small business owners, such as automation and AI. When automation is implemented correctly, it can make a huge difference in the time, effort, and money spent on the business from day to day. Then there is AI, integrated into customer-related activities such as loyalty, which we will examine, and leveraging data in ways never thought possible before.
But it’s not just technology that is bringing us hope! On the social front, various trends are beginning to emerge, giving local businesses a silver lining to cling to behind the cloud of uncertainty.
One such phenomenon is the ‘shop local’ trend that is sweeping the globe, driving customers to shop at local businesses in order to keep their communities alive and thriving. If you search #ShopLocal on Instagram and Twitter, you will discover that customers consider shopping locally to be one of the trendiest and most ethical agendas.
For local businesses to recover and thrive, they must leverage both the ‘shop local’ trend and the technological tools available. These two can work together to create and maintain an effective loyalty program that will turn their customer base into revenue-boosting regulars.
Here are some statistics to put things into perspective:
- 75% of consumers will make another purchase if they receive a suitable incentive
- 95% of customers prefer engaging with loyalty programs if they involve emerging technologies such as AI or chatbots
- 75% of customers prefer engaging with loyalty programs right on their smartphones
A great example of a cutting edge loyalty solution that is embracing the now, is Glue, an innovative customer loyalty solution designed specifically for small businesses. Based on experience, AI, and vast amounts of consumer data, Glue offers local businesses an expertly tailored loyalty platform that perfectly suits their goals and their customers’ behavior. Not only that, Glue is a self-run tool, executing the loyalty program seamlessly and automatically, turning customers into regulars, and freeing the business owners to concentrate on taking care of their business.
The importance of loyalty programs for small businesses
Most small local business owners already understand the importance of having a loyalty program for their business. Repeated studies have shown that a 5% increase in customer loyalty results in a 25%-95% increase in profits. This is due to the fact that a returning customer is 60%-70% more likely to make a purchase and spends 31% more money than an existing customer.
The ‘Shop Local’ trend mentioned earlier presents a unique opportunity for business owners to create a community behind the brand, help customers empathize with the brand, and let them know how valuable they are to them.
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A good and consistent loyalty strategy will always pay off. After all, everyone wants to go where everybody knows their name (where are my introverts?).
Loyalty is part of the solution, not the problem
So, if everyone understands the importance of a good loyalty program for their business, why are these programs extremely common for large enterprises, yet less common amongst small local businesses?
The answer is two-fold. First, as a local business owner, your customers expect you to be available for them on their terms — meaning, on their mobile devices and just a click away at all times. That is the key to understanding what automation can do for customer loyalty and retention efforts.
Continually aware of consumer psychology and the business’s goals, Glue helps the busy business owner:
- Turn visitors into members
- Generate repeat business
- Increase basket value
- Leverage loyalty to attract new customers
All of this is done automatically, through the power of AI technology, without any effort required on the business owner’s end. The end customers are able to track their membership status, points, discounts and rewards, and redeem them automatically upon making a purchase at the business or online. Glue even uses geo-location based targeting to send personalized, special offers to customers automatically, whenever they are nearby.
Small Businesses need to live in the moment and plan for the future
Vaccines are already being administered in various places around the world, and we are starting to see a pandemic free horizon. To recover and even thrive in a post-covid era, local business owners must prepare a smart, forward facing strategy. Leveraging technology, embracing social trends, and providing a holistic customer experience is what will set them apart from the competition, and make all the difference in the long run — for them and their brand.