Is risk-aversion hindering your business growth?

Is risk-aversion hindering your business growth?

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This is a guest post from Bay Street to Main Street Consulting
(Member since 2017)

Contributors:

Maria Caines
maria@bay2main.com
Bay Street to Main Street Consulting

Have you ever wondered why Atlantic Canada is always last to embrace a new music genre, fashion trend or hairstyle? Atlantic Canadians tend to be extremely conservative in business. So slow are we to adopt new business ideas that risk-aversion is approaching a level than is hindering, or at least slowing, business growth.

Let’s look at one business technology idea: customer loyalty and customer relationship management. According to Bond Brand Loyalty’s 2019 report on Canadian views and experience with loyalty programs, 65 per cent of people spend more to maximize benefits, 68 per cent are more likely to recommend brands with good loyalty programs and 79 per cent are more likely to continue doing business when a brand has a loyalty program. This means that consumer behaviour is being significantly influenced by companies who offer a loyalty program.

Most national chain stores recognized early the revenue growth potential with a loyalty program to offer rewards and regularly communicate with their customers, to keep their name top of mind and to get their offers in front of them as early and often as possible. Most of us have first-hand experience with PC Optimum as a prime example of how Loblaws has learned to drive consumer behaviour to maximize point collection. What many don’t realize is the exponential growth that Loblaws has experienced over the 20 years since PC Points first launched in 1998. Their historical financial statements show after that Loblaws share prices doubled in three years and tripled in five years.

So why are business owners so afraid to implement a business tool that has the potential to grow their revenues by increasing their customer engagement and retention? Even if the results were half of Loblaws experience, the rate of success amongst SMEs would greatly increase.

How can one tool create such an impact? Having a direct communication line with customers will enable businesses to stay top of mind, inform of new products, special birthday offers, sales, increase items in a cart, increase sell-through and generally elevate customer experience. Traditional media costs may be reduced in favour of more targeted marketing efforts.

Features for a loyalty solution:

  • Easy to implement & use
  • Tech savvy & mobile
  • Affordable
  • Brand with your logo
  • Coalition
  • E-commerce API
  • B2B adaptability
  • Global reach

A coalition platform may reduce your cost of new customer acquisition by marketing beyond your existing customer base, keep the accruing liability off your balance sheet, plus save time and money on design, administration and advertising. It’s also more attractive to customers hoping to collect and redeem rewards in more than one place. AirMiles embraces the coalition model as does CAA. Local businesses with a loyalty program can help level the playing field with big box stores.

In November 2019, Narrative Research issued Urban Report stating, “Just under nine in ten residents (86%) say they are more likely to purchase goods or services from a company or organization if it is local.” Imagine consumers collecting loyalty rewards whenever they shopped at a locally-owned business and choosing local business more often than they do now. This will keep our hard-earned dollars churning through our economy many more times, creating jobs, paving the way for new businesses and giving our young people better opportunities to create a life in our province.

Isn't that worth a very minimal risk?

PM
Loblaws History

< Back to Articles | Topics: Trends

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