What Really Earns Loyalty in the Local Business World?
Posted by MiriamEllis
St. Valentine’s Day is on the way, and I’ve been thinking about love and loyalty as they apply in the local business world. It’s been estimated that it costs 7x more to acquire a customer than to retain one; in my city, most of the major chains offer some type of traditional customer loyalty program. Most rely on a points-based system or an initial sign-up investment to receive benefits, but I wondered about Main Street.
I picked 15 locally owned businesses at random to see if they had created loyalty programs, and then I checked Google and Yelp to see if any of these programs had been inspiring enough to generate mentions in reviews (the most obvious online signs of devotion or dismay) in the past year. Here’s what I found:
|Business Model||Loyalty Program||Mentions in Reviews|
|Toy store||$10 coupon for every $200 spent; $5 birthday card gift; teacher discount||1 mention|
|Grocery store||Grocery purchasing card that donates to local schools||0 mentions|
|Video store||Rent 12 videos, get 1 free||0 mentions|
|Craft store||Senior Tuesday 10% discount; birthday discount of 20%||0 mentions|
|Hardware store||No program||N/A|
|Bookstore||Purchase $25 rewards card and get 10% off of purchases for 1 year||1 mention|
|Restaurant||Complimentary birthday or anniversary dessert||0 mentions|
|Café||Get 10 stamps for beverage purchase and get a free drink||2 mentions|
|Clothing boutique||No program||N/A|
|Kitchen store||No program||N/A|
|Bike shop||Spend $6,000 and receive free flat repair, swag, free event entry, and more||0 mentions|
|Hair salon||Get 7 cuts and receive ½ off on merchandise||0 mentions|
|Pet supply||Buy $5 card, get 5% off of merchandise for the year||2 mentions|
At a glance, 2/3 of the independently owned businesses in this city have created loyalty programs, and in the last year, there were 6 total mentions of these benefits in all of the reviews earned by the 10 businesses offering these programs. Of course, this doesn’t mean that more customers aren’t participating in these programs, but it does seem to indicate that the majority of customers feel positive about a business for reasons other than official loyalty programs, at least in my small study.
So, what does foster loyalty? In the reviews I looked at, nearly all happy customers referenced either a specific great experience or an ongoing positive aspect of the business. These memories, if impressive enough, are what drive good reviews and help customers to remember to return for further good experiences. Then there’s the flip side — experiences so negative that they can drive a customer away forever.
Given the high cost of acquiring new customers vs. retaining existing ones, I’m going to document here 5 personal experiences with local businesses that made me vow never to return, and then I’ll follow that up with 5 excellent experiences that not only merited a great review from me, but have also lead to multiple transactions over the years. It’s my hope that these personal mini case studies will give local business owners and local SEOs a glimpse into the mind of one unbiased consumer, and that the findings …read more
Source:: Moz Blog