Digital Marketers Take Notice: Promotions, Discounts, and Deals Drive Third of All Annual SMB Sales

Consumers may have specific items on their 2014 holiday gift-giving lists, but few things spur action more than promotions, discounts, and deals. Holiday shoppers — according to recent BIA/Kelsey research — are going to be experiencing an onslaught of digital promotions and discount offers, not only from major brands and stores, but from their local, …   Read More

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Digital Marketers Take Notice Promotions, Discounts, and Deals Drive Third of All Annual SMB SalesConsumers may have specific items on their 2014 holiday gift-giving lists, but few things spur action more than promotions, discounts, and deals.

Holiday shoppers — according to recent BIA/Kelsey research — are going to be experiencing an onslaught of digital promotions and discount offers, not only from major brands and stores, but from their local, small business merchants, too.

The information comes from BIA/Kelsey’s Local Commerce Monitor (LCM) survey of small and medium-sized businesses (SMBs) that spend more than $25,000 annually on advertising and promotion.

The survey suggests that 31.7 percent of the total sales racked up by SMBs in the next 12 months will come from promotions such as discount deals, daily deals, coupons, or similar discount offers, up from 22.9 percent in 2013.

“The significant increase in the use of discount promotions by Plus Spenders underscores how promotions and sales are becoming baked in to the business model for many larger SMBs,” said Steve Marshall, director of research for BIA/Kelsey. “Consumers have an increasing array of tools at their disposal for finding great deals. And SMBs are making sure they have something to offer.”

In addition to engaging customers with promotions, SMB Plus Spenders are also rewarding their best customers through loyalty programs. The LCM 18 study revealed 44.3 percent of SMB Plus Spenders offer a customer loyalty program, in which they offer discounts or special promotions to frequent customers.

And the trend is accelerating: 21.5 percent of SMB Plus Spenders without a current loyalty program report they’re likely to institute one.

“The LCM 18 study found that among SMB Plus Spenders that offer a customer loyalty program, 48.1 percent provide a rebate or credit as the reward, and another 29 percent offer points as the reward,” note the researchers in a report summary. “Of SMB Plus Spenders that offer a customer loyalty program, 43.1 percent offer a program that is homegrown and electronic, and the same percentage offer a program that is homegrown and paper-based.”

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