My data trend for 2014: SMEs get in on the loyalty game

Small companies no longer need mass-market scale or big data infrastructure to perfect loyalty marketing. Just a mobile phone will do and their closeness to their customers gives them a big advantage over larger brands.


For most SMEs, loyalty schemes have long been something they aspire to but which are destined to remain out of reach. Their inability to buy or implement complex technology in particular has made the prospect of loyalty marketing somewhat unrealistic, aside from opting for simple stamp-cards.

But that’s now being flipped on its head by smartphones, payment companies and mobile operators, whose services are starting to lower the barriers to entry dramatically. Earlier in December, in an interview for our CMO Strategy section, Telefonica’s Jonathan Earle discussed the loyalty services the mobile network is now offering to SMEs; while just last week, PayPal colonised Covent Garden market in London to demonstrate how its PayPal Here app and chip-and-pin device can give traders the ability to process digital payments.

I say “flipped on its head” without exaggeration (I couldn’t bring myself to say “disrupted”), because this instantly has the potential to put small brands way ahead of the high street behemoths in the loyalty stakes. Whereas national retailers in particular have had the one overriding advantage of their databases, small companies have always had the claim to be able to provide for customers in a much more personal way – just without being capable of recording and tracking transactions intelligently.

If they can now begin to unlock the technology to perform loyalty marketing, who better to craft those much-vaunted one-to-one communications than someone who actually has a real one-to-one relationship with their customers?

There’s clearly still a long way to go – at present PayPal is really only providing the means to take payment in more versatile ways that don’t involve signing up to a long contract. It’s up to the trader then to integrate this data with what they know about customers but if SMEs can succeed in getting hold of cheap and simple CRM software that meets their needs then the circle is complete.

Telefonica is building a more complete loyalty offering for SMEs, complete with white-label apps and websites and the ability to geo-target ads.

If more small providers can jump on this bandwagon, then you can bet your bottom dollar that small and nimble start-ups will start coming up with new and innovative loyalty schemes that put the big boys to shame. We’ll find out more about whether they can in the coming months but until then, have a merry Christmas and a happy new year!