What Small Businesses Can Teach Us About Building Customer Loyalty

Building customer loyalty is not something that can be done overnight. But with the right mindset, the right approach, and patience, brands can establish mutually-beneficial relationships with their customers. Enterprises need only look at how their local, smaller counterparts do this. Here’s why small businesses are more often better at building customer trust and loyalty.

Thinking Small

Talking about building customer loyalty, we often think big and take examples from large enterprises. There’s Nike’s direct-to-consumer strategy shift which resulted in an 82% increase in online sales. Marriott and Hilton, on the other hand, opened their doors to daytime customers. Then, there’s Mattel’s Fisher-Price with their virtual toy museum on Instagram, capitalizing on nostalgia and childhood memories.

We could go on about how these big brands are building customer trust and loyalty at scale. However, when we talk about the core of these best practices, we often come back to the local level.

Often, it’s the small businesses that are the real experts at building customer loyalty through service quality. Which makes sense, considering the most basic model of an “ideal” customer engagement is the traditional two-way interaction practiced in local businesses.

But loyalty for small businesses doesn’t happen overnight. Local business owners often go the extra mile to provide their customers’ needs. Getting to know customers, anticipating their problems, and providing solutions and recommendations they can follow — these are just some of the best practices of building customer loyalty.

This establishment of long-lasting, emotional loyalty for small businesses helps owners in the long run. Customers tend to be willing to pay more to support their local merchants. Even local suppliers, who are also often customers themselves, offer discounts and extra supplies free of charge. Moreover, clients pass word of mouth and invite new prospects, which is what happened to a local business owner in New Jersey.

Building Customer Loyalty through Selflessness

In her New York Times article, Ellen Rosen writes about a small business in Englewood, NJ that demonstrates what true loyalty and devotion to customers is.

Symone Johnson, owner of Indulge Hair Salon LLC, was one of the many business owners forced to shutter their shops when the COVID-19 pandemic hit. Looking for ways to keep herself busy, she decided to host online sessions and post tutorial videos teaching customers how they can style their hair at home.

She did this free of charge, and when customers offered to pay, she respectfully declined.

“I didn’t do it for the financial benefit – it kept me busy and I didn’t think of myself,” Ms. Johnson told The Times.

Little did Ms. Johnson know, she was already building customer trust and loyalty with her selfless service, and that it would benefit her immensely. Patrons had spread the word about her videos. Ms. Johnson found herself not just keeping existing customers, but acquiring new ones, as well. Moreover, they often gave generous tips in return for her informative content. She tells The Times, “Instead of a 20% tip, it became a 50% tip.”

This is how true loyalty is earned. By thinking of her customers’ needs and determining a course of action for their convenience, Ms. Johnson went about building customer loyalty and passively reaped the benefits.

Scaling Up

Whatever the scale of the business, marketers can always learn and apply lessons like this. This is as long as they understand one thing that we’ve been saying here at Reach: loyalty is a two-way street. It’s not only the customers that should be loyal to businesses, companies have to show loyalty to their customers, too.

Big, established brands need to create mutually-beneficial partnerships with their customers. They can do this by compensating customers properly when they share their data, and ensuring the privacy and security of that data. Enterprises should reward their customers for more than just buying stuff, but for engaging in communities, sharing reviews, sharing opinions with brands and other non-transactional interactions. Additionally, providing unique, customized experiences greatly helps with building customer loyalty through service quality.

Whatever the case, brands need to start building customer loyalty. They can watch their smaller counterparts and scale what they learned, or they can adopt platforms that have already found a way to effectively scale customer loyalty programs; platforms like the Loyalty Marketplace.

What do you think? Let us know your thoughts.