How a Loyalty Program Can Start Up a Small Business
There are over 2.8 million small businesses in the United States, according to the U.S Small Business Administration. While larger companies tend to attract a greater number of lucrative consumers, small businesses account for nearly 54 percent of the United States’ annual sales. The increasing number of small businesses across the nation has led to a high saturation of companies competing for loyal customers. As the New Year approaches, small business owners should consider the benefits of offering customers incentives and differentiate themselves from competitors.
A joint report conducted by Manta and BIA/Kelsey found that repeat customers spend 67 percent more than new customers. While that percentage may seem high, industry research has proven that the more a customer spends, the more likely they are to return for future purchases. In fact, a 5 percent increase in retention can lead to a 25-100 percent increase in profit. For a small business to drive success, it is essential to retain customers and motivate loyalty.
Customer loyalty programs are highly valuable assets to small businesses as these programs focus on encouraging frequent transactions from consumers by rewarding them with unique incentives.