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9 reasons local loyalty schemes are different

The vast bulk of loyalty schemes are designed for one business. That’s’ easy!

What’s much trickier is figuring out how a local loyalty scheme needs to work, with multiple businesses involving huge variations in products, price range, etc. Now that’s a real challenge!

But we’ve taken that challenge, given it a hard stare, argued with it for a while and think we’ve figured it out …

#1      An effective local loyalty scheme has huge pulling power

      • A loyalty scheme run by one business, can only have a small effect, locally
      • A true local loyalty scheme changes spending patterns of 1,000’s of people

#2     We all care about where we live

      • Most of us really, really care about our local shops, high street and town
      • And we all hate to see boarded-up shops
      • A good local loyalty scheme taps into that emotional ‘connection’

#3      There’s an astonishing variety of businesses

      • The range and type of products and services offered
      • Price
      • Margins and profitability
      • Target market
      • Weekly footfall
      • Owners background, experience and availability
      • Number of employees
      • Revenue and cost profile
      • Technology being used
      • Seasonality
      • And even whether or not they have fixed premises – or a power supply!

#4      A town or group of local businesses isn’t a department store

      • There’s no marketing department
      • Lots of different technologies and working practices
      • Difficult to track customer retention rates, lifetime value or average spend

#5      Decision-making is much more complex

      • Often no clear decision maker or clear decision-making process
      • Lots of stakeholders need to be taken into account
      • Even small decisions can take a long time to finalise

#6      There’s always some competitive baggage

      • Local businesses are used to competing with each other and other towns
      • So collaborating in a local loyalty scheme can feel a bit uncomfortable

#7      Inclusivity becomes very important

      • Local loyalty schemes will thrive, if a wide variety of businesses join
      • And make sure that ‘unbanked’ families can participate too

#8     On-going funding is much more problematic

      • Basic lunch funding can normally be arranged
      • However, funding beyond year 1 can’t be relied on

#9     Limited experience of loyalty principles and techniques

      • There aren’t many business owners who have run their own loyalty schemes
      • And even fewer have experience of anything like a local loyalty scheme