The timeworn phrase “think global, act local” is attributed (somewhat mistakenly) to the 1915 book “Cities in Evolution” by civic planner Sir Patrick Geddes. The concept is spelled out all right, proving it’s been around a good while. And it’s more vital as businesses rebuild and recover today.
PYMNTS’ June 2021 Making Loyalty Work For Small Businesses: United States Edition, a Pollinate collaboration, applies Geddes’ visionary thinking into challenges facing small and medium-sized businesses (SMBs) from Main Street to High Street, and beyond.
PYMNTS’ researchers surveyed over 4,500 consumers in Australia, Brazil, the U.S. and the U.K. through March 2021, finding that nearly 40 percent of U.S. consumers believe in supporting SMBs “primarily because they think doing so can help improve their local economies.”
Per the report, “Small businesses occupy a unique position in the American psyche. They are often romanticized as the ‘backbone’ of the U.S. economy and are therefore seen as cornerstones of countless communities across the nation. Many U.S. consumers therefore believe that small businesses are an important part of their local communities and deserve their support,” with close to half saying that doing so this year is even more imperative than last.
Hurray For Hometown, USA
Breaking consumer sentiments into constituent elements, Making Loyalty Work For Small Businesses finds three principal reasons why consumers are buttressing their local SMB base, with 48 percent of respondents saying it keeps money close to home, and 45 percent believing it’s effective “as a way of reinvesting in their local economies.” Another 38 percent believe buying from local SMBs “helps expand the job opportunities in their communities.”
Taken together it’s a potent package. Putting it together is another matter, and whereas consumers like SMBs to get their business, they’re less enthused about SMBs managing all-important loyalty programs that are standard-issue for connected economy aspirants now.
The research shows that 139 million U.S. consumers (55 percent of the adult population) would be either “very” or “extremely’ interested” local SMB loyalty programs, and 56 percent say they’d prefer those “hypothetical programs be managed by the small businesses themselves.”
When you ask another way, however, that picture alters radically.
“What consumers say they would like in theory may not always match what they want in practice,” per the study, which adds that “U.S. consumers may like the idea of small businesses managing their own rewards programs, but only 8.2 percent say they trust those merchants to obtain and manage their personal data in practice.”
Consumers Want SMB Rewards To Think Bigger With Partners
Who consumers prefer to manage loyalty schemes — and the confidential transaction data behind them — is where trusted third-party providers tellingly enter the frame.
According to 2021 Making Loyalty Work For Small Businesses: United States Edition, “Technology companies and banks are at the very top of the list of entities that could help small businesses get the most from their loyalty programs, with 40 percent of respondents evincing trust in tech titans such as Amazon, Apple and Google with personal data, and 39 percent trusting banks. This means both technology firms and banks are considered to be better situated to operate the local loyalty programs that might help Main Street merchants boost their foot traffic,” per the study.
As the new report concludes, “Offering loyalty programs can help incentivize U.S. consumers to shop at local community retailers, but not just any such program will do.”
Based on the new findings, SMBs are typically better off partnering with high-profile third-party loyalty program providers “their customers already trust to handle their sensitive personal data if they hope to draw more Main Street shoppers to their storefronts.”