Why create a loyalty programme for your SME?

A well-designed loyalty program can help improve customer retention and increase your SME's revenue. Here's what it's all about.

1. Why does your SME need a customer loyalty program?

While it is true that we have experienced a boom in e-commerce in recent years, it is also true that the pandemic by Covid-19 has caused sudden changes in the online shopping behavior of consumers, further accelerating the transformation to a more digital world where products, services, current news, information (especially health-related) and digital entertainment are consumed.

In this current context, guided by the survival instinct and by data indicating that these changes in the purchasing process can have lasting effects, many previously non-digitized SMEs have taken the step of marketing their products and/or services on the Internet. Therefore, not only have potential customers increased in the network but also the competition in many sectors.

For this reason, without ignoring the strategies that help us to maintain a constant flow of new visits to our website, our attention must focus on how to improve the overall experience of our buyers and how to enhance the retention of regular customers and achieve their loyalty, as this will help us to reduce the cost of acquisition per customer and improve their average expenditure. This will allow us to be more competitive and maintain steady growth.

But how exactly does loyalty affect your brand and business?

Customer loyalty is crucial in the online business world, regardless of industry. In fact, research has been conducted on the effects that consumer loyalty has, concluding that loyal customers:

  1. Have a higher purchase frequency than others.
  2. They spend more than other customers per purchase made.
  3. They improve your brand reputation with their opinion.
  4. They attract new customers to your brand thanks to the above.

So, now more than ever it is necessary to devise a loyalty program that helps us to improve customer retention and increase the SME’s revenue consistently, as it not only improves revenue per customer, but also positively affects brand image and brand recognition, influencing other consumers.

But how do we improve loyalty? That brands strive to provide a positive experience through customer service and increasing customer satisfaction may seem obvious, but it is important to understand that customer satisfaction does not mean customer loyalty.


2. What is customer loyalty and what influences customer loyalty?

While satisfaction in the buying process is critical to achieving customer loyalty, we must understand that this consists of a perception of their past experience and does not necessarily translate into achieving brand-loyal customers.

Customer loyalty is a process by which a business or brand develops a positive relationship with its consumer with open means for communication and trust building so that they return for its products or services.

However, without a solid loyalty strategy, that is, without a program backed by marketing and sales actions that support the goal of customer loyalty and take into account what influences consumers, it will be complicated to get them to have the willingness to buy repeatedly. And what factors influence customer loyalty?

    • Yes, satisfaction is the main factor and this depends on the customer’s perception after the purchase, i.e. whether the product or service has pleasantly met their expectations. To ensure customer satisfaction, it is important to offer not only a friendly and prompt service, but especially as much personalization as possible, which we will discuss later.
    • Another influential factor is the perceived value of competitors’ offerings. It is possible that before making the purchase, the customer has evaluated other potential vendors, i.e., our competition. And although he may have chosen us because our price is more competitive, in many cases the answer lies in the perceived value of our offerings.
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