New BIA/Kelsey Research Finds 38% of Small Businesses Offer Customer Loyalty Programs

August 20, 2013
Press Releases

SMBs estimate customer acquisition promotions like coupons and daily deals will generate 17.7% of total business this year; Findings will be presented in a free webinar tomorrow and at next month’s LEADING IN LOCAL: SMB Digital Marketing conference

CHANTILLY, Va. (Aug. 20, 2013) – Use of customer loyalty programs by small businesses (for delivering special offers and rewards for frequent customers) remains steady, according to the latest findings from the “Local Commerce Monitor” (LCM – Wave 17), BIA/Kelsey’s ongoing study of the advertising behaviors of small and medium-sized businesses (SMBs).

Among those surveyed, 38 percent said they currently offer a customer loyalty program, with an additional 21 percent stating they will likely add such a program in the next 12 months. There was effectively no statistical change in this finding compared with the 2012 survey.

Small businesses estimate 17.7 percent 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. 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,” said Steve Marshall, director of research, BIA/Kelsey. “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.”

Among those small businesses offering customer loyalty programs, more than half (54 percent) stated they operate their own in-house programs, primarily using a paper-based tracking method, like a punch card.

Marshall suggested, “There’s a large opportunity for third-party service providers and credit card companies to replace the homegrown loyalty platforms with sophisticated electronic platforms that link into a CRM system and/or a payments platform.”

The latest developments in SMB loyalty programs and customer acquisition promotions will be discussed at BIA/Kelsey’s upcoming LEADING IN LOCAL: SMB Digital Marketing conference, which takes place Sept. 11-13, in Austin. The program includes a keynote by LevelUp CEO Seth Priebatsch, who will talk about his vision for SMBs using transaction marketing to win more customers and generate more revenue from each customer relationship.

In addition, a session titled, “Transaction Marketing vs. Advertising” will examine the next generation of SMB “transaction marketing” services, including deals, coupons, loyalty services and CRM/analytics.

The conference also includes a featured presentation by Brad Robertson, SVP of product innovation and new ventures for Gannett’s G/O Digital unit, who will share insights about how his business unit is making an impact on local commerce services with social media, shopping, deals, coupons and loyalty.

BIA/Kelsey will present findings from LCM – Wave 17 during a free webinar on Wednesday, Aug. 21. To view an on-demand version of the webinar and/or the slide deck, click now.

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About Local Commerce Monitor

Local Commerce Monitor (LCM) is BIA/Kelsey’s ongoing tracking survey of small and medium-sized businesses conducted online with research partner Ipsos. The survey measures where SMBs are spending their advertising and promotional budgets and how their media usage and spending habits are evolving. For this study, SMB is defined as a business having from 1 to 99 employees. Local Commerce Monitor draws its sample of business respondents from a mix of nationally scoped MSAs, which include first- and second-tier markets. Local Commerce Monitor Wave 17 was conducted in July 2013 via an online survey of 568 SMBs.

About LEADING IN LOCAL: SMB Digital Marketing

BIA/Kelsey’s LEADING IN LOCAL conferences are the definitive events on local digital advertising and marketing. LEADING IN LOCAL: SMB Digital Marketing is focused on how the sales forces of Yellow Pages, search firms, newspapers, TV and radio stations, promotions companies and other digital marketing solutions providers are converging on independent SMBs, franchisees and regional groups. The conference will offer a first-hand look at the latest innovations and influential players in SMB-driven search, video, social media, mobile, promotions, CRM and reputation management.

Event sponsors include Agendize, Amdocs, Apptus, CallFire, eLocal Listing, First Data, Infogroup, Local Market Launch, Media Distribution Solutions, Neustar, Sales Transformation Now, Reply!, Telmetrics, UBL, vSplash, Yext and YP.

Association and media partners include the Association of Directory Publishers (ADP), Big Marketing for Small Business, International Classified Media Association (ICMA), Local Commerce Canada, Location Based Marketing Association (LBMA), Smallbiztechnology, Small Business Trends, The Next Web, Topseos, and Visibility Magazine.

For more information, visit https://www.bia.com/LeadingInLocalAustin.

About BIA/Kelsey

BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at https://www.bia.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey). Stay connected by subscribing to the firm’s bi-monthly newsletter.