Forte Consultancy | White Paper
A Forte Consultancy Group Company
Small Business Loyalty Programs - Giving Back to the Oft-Ignored SME
Segment
For too long, the SME segment has been underserved, with companies doing
little to cater to the needs of this extremely important and valuable group of
customers. Some companies have begun to take heed, launching loyalty programs customized for this segment across numerous different sectors…
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Forte Consultancy Group is the umbrella group for Forte Consultancy, Forte Wares and Forte Experts brands.
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What?
Companies have long aspired to have a fully loyal
portfolio of customers. In such a scenario, a company
would have practically no churn, would receive minimal to no complaints, would be able to make errors on client accounts and get away with it, would
be able to increase fees and rates all the time, would
have full share-of-wallet, and, to boot, would have
an army of advocates touting the company to anyone
who would listen.
How?
Making a customer loyal, however, is extremely difficult. It involves having a very competitive offer in
place (be it from a quality or price perspective), providing an excellent level of service, and time – customers can’t be turned loyal overnight. Moving a
customer from the skeptic zone to the advocate zone
requires that the numerous interactions he or she
has with the company over a given amount of time
are as satisfactory as can possible be. These interactions we speak of can be the straightforward ones (i.e.
the customer being addressed by his or her name as
soon as a customer service representative answers
the phone) or the exceptions (the way in which a
grievance the customer has is handled) – across the
board, companies must manage the entire customer
lifecycle.
bottom line. SMEs are of the utmost importance and
need to be treated as such. Let’s use an example to
make this clear – The UK SME market is comprised of
1.2 million businesses, representing not only 99.7%
of all businesses in the UK, but also 56% of the UK’s
workforce. The SMEs in the UK also account for £2.4
trillion in sales, which is half the sales of companies
in the UK. While no one SME in and of itself may
seem of significant importance to a given company,
the collective value of SMEs is undeniable.
Two separate phenomena also require SMEs to be
treated as a highly important segment – first, some
of the SMEs will be enterprises in the future, and will
generate significantly more revenues for any given
company – capturing such SMEs’ loyalty today will
ensure value is retained in the future. Second, the experience of individuals as employees of a given SME
reflect on their decision making process as members
of the consumer segment. Poor experiences they
may have with a bank or a telecom at the workplace, for example, will directly influence their decision
making process as individual consumers. Considering
that over half of the UK’s workforce is employed by
SMEs and the influence the SME segment can have
on the consumer segment becomes all too clear.
Some companies have quite clearly realized the importance of the SME segment and have taken tanFrom companies we’ve examined across numerous gent steps to deepen their relationship with small to
different sectors on this issue of client relationship medium-sized businesses through offering SME-only
management, we’ve seen one common theme – that loyalty programs. Some examples that can be found
SMEs are relatively ignored. Be it in telecoms, ban- from around the world include:
king, retail, hospitality, or a range of other sectors,
companies focus most of their efforts on two general ■■ Emirates Airlines’ Skywards Business Rewards
Program: Designed for SMEs with 80 or fewer empsegments – consumer and enterprise.
loyees, this program clearly aims to please not just
For the consumer segment, companies constantly business owners but their employees as well – the
come up with customized offerings, manage a loyalty program generously gives the organization Business
program, and differentiate their high-net worth cus- Rewards Miles, while also giving the employee his or
tomers, among other activities, to boost consumer her Skywards miles, for every flight flown with the
loyalty. For the enterprise segment, dedicated custo- airline. The program also allows for the easy centralimer service representatives are assigned as well as zed management of all bookings for the entire orgasignificant discounts given based on the size of the nization in a secure online atmosphere.
relationship. The SMEs, unfortunately, get lost in the
shuffle – too few as a group to be as important as the ■■ Verizon’s Business Link Rewards: This program
consumer segment, too low in value individually to provides businesses with points in exchange for their
spend on phone, internet, or FiOS services, with the
be treated like the enterprise segment.
only requirement being that $125 must be the miniThis management approach is detrimental to the mum bill each month to qualify for the program (es-
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sentially requiring the consolidation of several of the
above mentioned telecom services, or at the least
significant spend per category). SMEs can then redeem their points via a rewards catalog that focuses on
business-related freebies (i.e. office furniture, dinner
vouchers, travel vouchers, etc., all benefits meant
to make the business appreciate their rewards as a
workplace).
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and the employees themselves. This not only ensures
an SME-wide engagement in the program and thus a
greater level of loyalty than that which would only be
achieved through winning over the SME owner, but
also builds loyalty for the employees, which can be
translated into a relationship that can manifest itself
on an individual consumer level.
■■ High value SMEs should be treated differently,
particularly through the utilization of soft benefits.
■■ American Express Business Gold Rewards Card: As with the consumer segment, high value SMEs that
In Canada, American Express offers a card designed will one day possibly be valuable enterprise consuspecifically with SMEs in mind, giving not just points mers should be treated as such immediately. This can
to cardholders and the SME that can be spent on a be done through the dedication of a customer servirange of benefits (i.e. convert points into airline mi- ce representative via the loyalty program, or, through
les with Delta, Continental, or Cathay Pacific, or into the offering of surprise benefits to the SMEs (i.e. on
vouchers to be spent on Apple or Sony products), but relationship anniversary’s a surprise gift basket can
also discounts to business-related vendors, such as be sent to the SME).
Hertz and FedEx.
■■ The program should be used as much as possible
for incentivizing SMEs to conduct their business with
■■ Canada Post VentureOne Rewards: Aimed at fi- the company in desired manners. For a bank, this
ghting off the likes of FedEx and DHL by appealing to could be incentivizing the SME to sign up for online
the bottom-line of SMEs, Canada Post has a program banking through the offering of bonus points, partithat gives members instant discounts on the various cularly for those lower value SMEs that are a burden
delivery services it offers. No bells or whistles built in on the branch network. For a telecom, this could be
like other programs, the VentureOne program has a offering sticky services such as mobile internet pacfew partners that provide discounts as well to mem- kages at a discounted rate for each additional empbers, such as SageSpark, an IT company providing loyee signed up for the package. Such programs offer
computer repair and IT optimization solutions.
an excellent means for shifting consumer behavior
into that which is most strategically desired and for
When designing and launching an SME segment-fo- driving the sales of strategic products and services.
cused loyalty program, there are several differences ■■ The program should drive the consolidation of all
that must be taken into account, differences that set purchases by the SME with the company in questisuch programs apart from those designed for use by on. For an electronics retailer, this means ensuring
the consumer segment. In addition, there are some all electronics equipment purchased by an SME over
must-have features that are common features of a given amount of time should be from them. For an
best-in-class programs. We recommend the following airline, it means ensuring every business trip by an
points be taken into consideration in any SME loyalty SME is done with them. Such an objective can be acprogram design effort:
hieved through building in targets for the SME, such
that if the SME hits certain spend levels, they receive
■■ SMEs have a much greater reliance and place an additional level of benefits. A feature like this can
more value on benefits that are relevant to their be done behind the scenes as well, customized for
workplace, hard and soft. Hard in terms of a bene- each SME, based on each SME’s past spend and numfit that will reduce their overhead (i.e. free telecom ber of employees.
minutes or airline miles, courier or office supply dis- ■■ One final recommendation is that such a progcounts, etc.), soft in terms of access to benefits that ram should reward the SME owner and its employecan boost morale in the workplace (i.e. earn xx num- es for having relationships with the company on an
ber of points and dinner for you and your employees individual level, driving acquisition through the progis on us). Testing out different concepts with one’s ram. So a telecom, for example, can give 1 point for
own SME customers is a proven method for ensuring every X spent to employees of an SME enrolled in the
the right benefits are offered, as different companies program, but can give 3 points for every X spent to an
in different segments have different types of SMEs as employee if he or she also has an individual consutheir customers.
mer account with the company.
■■ Benefits must be built in for both the SME owner
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What Next?
The recommendations listed above all need to be
of course tested in several ways, ensuring they are
financially feasible and help achieve the desired results. This can be done through a thorough pilot effort prior to any mass-scale rollout of such a program.
Most companies ultimately need to do more than
they are doing now in terms of addressing the ne-
eds of the SME segment. Loyalty programs are only
the tip of the iceberg. Any effort to drive loyalty with
SMEs needs to include ensuring the right products
and services are being offered to them and that customer service levels are meeting their needs. Loyalty
programs dedicated to them, however, is a good
start, and a soon-to-be must-have as such programs
proliferate around the world.