Local businesses have a head start attracting consumers

Local businesses have a head start in generating consumer loyalty according to The Loyalty Report published this month by O2 and the Global Future Forum. The report reveals that 42% of UK consumers will actively go out of their way to support new or local businesses in their community.  This is further backed up by the fact that two thirds of consumers believe that size has little impact on the reliability, consistency or quality of products they buy. As well as size and locality, good social and ethical business behaviour is considered increasingly important by consumers, with 1 in 3 consumers proactively looking to do business with companies that reflect these core values. The study also shows the role of people in building loyalty remains crucial. When consumers were asked to evaluate the impact of a range of communications services on feeling towards a brand, the human touch stands out above all else with an encouraging 80% of people who feel positive about a particular brand.  Peter Rampling, Head of SME Marketing at O2, comments:  “Small businesses have an inherent head start in building customer loyalty.  Although price is important, other factors matter more where local business can really compete. We know how important human relationships are and by virtue of their size and access to the community, small businesses can readily build strong individual relationships and through these deliver a great human experience that goes beyond quality of service to keep customers coming back.” Through the O2 X Awards, which recognises contributions made by individual entrepreneurs to key regions across the UK, O2 is seeing a number of businesses already tapping into these loyalty trends – from the active use of local ingredients in manufacturing with businesses like Wensleydale Foods (Yorkshire) to ethical marketing businesses like Enable Interactive (Bristol). Matt Connolly, co-owner of Enable Interactive a provider of online marketing communications for ethical companies, adds: “It’s key that small businesses take their ethical stance seriously and invest in communicating core social values to the consumer, it will not only reap customer loyalty in return but help attract new employees. We work day in and day out with companies that take social responsibility very seriously, once the message is out there consumers are immediately drawn into the brand.” The Loyalty Report, available free of charge from www.o2.com, is one of the most comprehensive contemporary studies undertaken into loyalty, involving in-depth interviews with over 1000 UK consumers through a mix of quantitative research and focus groups. The findings reveal, that whilst consumers believe they exhibit less loyalty to products and services than 30 or 40 years ago, just 22% believe that the concept is out of date and that a new set of drivers including the ethical business practices and the technology are emerging to shape consumer behaviours.