What is the Significance of a Smile?
According to a new study, a smile and a friendly hello is the most common reason (59 percent) why consumers feel loyal towards small and independent retailers. However, the study found that only 54 percent of small and medium size enterprises (SME) businesses stated their business employed this practice.
The report, The Lost Art of Loyalty, from Barclays, in partnership with Kingston University Small Business Research Centre, examined the retail behavior of 2,006 U.K. consumers and the loyalty business practices of 1,216 decision makers in British SMEs.
Over a third (36 percent) of consumers said they were loyal to small and independent retailers due to "brilliant customer service" while 22 percent said they valued businesses remembering their usual order. Yet only around half (53 percent) of the SME respondents indicated they are remembering or recording customers’ previous orders.
The study concluded that independents aren’t taking advantage of their position to foster loyalty with shoppers.
"While the majority of decision makers recognize the importance of personal relations with customers, they are failing to develop their own customer loyalty strategies," said Kingston University Professor Robert Blackburn, in a statement. "SMEs are in a unique position to embrace these traditional values of loyalty and should consciously build on their natural competitive advantage of being a smaller business as this can make a real difference to business survival and growth."
- Less than a third of SME respondents listed retaining (19 percent) or growing (12 percent) their current customer base as their business’ main priority to achieve growth over the next 12 months;
- Only 50 percent SME respondents encourage word of mouth recommendations by regular customers;
- Sixty percent of consumers are willing to pay more for a similar product from a small independent retailer, compared to a cheaper product from a large, corporate retailer;
- Fifty-eight percent of consumers believe that small independent retailers are in a better or the same position to engender loyalty among their current customers than large, corporate brands.
This research comes as Barclays is launching a new Business Current Account with a loyalty reward, which reduces the bank charges of loyal customers.
Do smaller retailers have an advantage over larger chains when it comes to engendering loyalty with shoppers? What simple steps (such as a welcoming smile) should be a requirement for all retail associates without regard to the size of the business?