Introduction
In the competitive e-commerce landscape, small and medium enterprises (SMEs) must adopt more attractive strategies for customer retention and loyalty. This is where loyalty programs come into play, enabling SMEs to implement such initiatives.
Consumer Perception and Loyalty Programs
According to the EY study, “Strategies and Loyalty Programs in Latin America 2025,” 83% of consumers believe that brand perception improves if a loyalty program is in place. However, SMEs in Mexico often neglect these programs, causing them to miss opportunities for customer loyalty, as explained by Juan Martín Vignart, General Director of Tiendanube México.
Benefits of Loyalty Programs
The primary reason for implementing loyalty programs is to increase customer retention, with 75% of businesses aiming for this goal. Additionally, 50% seek to boost the customer purchase cycle, and 47% aim to enhance brand-customer relationships, as reported by EY.
Juan Martín Vignart supports this, stating that in Latin America, businesses with loyalty programs see a 15-25% increase in sales.
Three Pillars of Loyalty
For a loyalty program to be effective, Vignart outlines three essential principles:
- Reward: Customers appreciate extra benefits from their purchases, such as point accumulation and discounts on future buys.
- Sense of Belonging: Feeling part of something enhances consumer appreciation for a brand, as it fosters a stronger connection beyond the company’s core values.
- Trigger Desire: A points system for discounts or products motivates consumers to continue purchasing and avoid losing their accumulated points.
EY’s research indicates that consumers aged 25-44 are more likely to participate in loyalty programs.
How SMEs Can Leverage Loyalty Programs
Effective and widely-used loyalty programs often involve accumulable points, a common approach in the airline industry. However, Vignart advises SMEs to opt for more agile methods to avoid complexity.
This aligns with consumer preferences, as 90% expect discounts, 39% desire special offers, and 34% take advantage of exclusive events or experiences.
Key Questions and Answers
- Q: Why are loyalty programs important for SMEs? A: Loyalty programs help increase customer retention, boost the purchase cycle, and strengthen brand-customer relationships.
- Q: What are the three pillars of an effective loyalty program? A: Rewards, a sense of belonging, and triggering desire are the essential components.
- Q: How can SMEs implement loyalty programs effectively? A: By focusing on agile methods, such as easy-to-understand points systems, SMEs can cater to consumer preferences for discounts and exclusive experiences.
