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How Small Businesses Can Retain Customer Loyalty This Holiday Season


SPONSORED CONTENT -- (StatePoint) Small business loyalty is on the rocks, according to a new study that finds that consumers are feeling more love for big retail brands this holiday season.

The study, from cloud-based accounting platform Xero, found that while 27% of consumers feel loyal to big retail brands, only 14% feel loyal to small businesses.

“For a small business owner who launched their business because of a passion, identifying ways to gain customer loyalty can be overwhelming. Fortunately, our data provides insights into tactics that small businesses can take to nurture ongoing relationships with customers,” says Ben Richmond, chartered accountant and U.S. country manager at Xero.

As the holiday season approaches, Xero is sharing these tips and survey insights to holiday-proof operations and keep customers satisfied:

• Keep delivery affordable: According to the Xero survey, 25% of survey respondents believe that delivery should always be free, regardless of original purchase price.

“Free delivery is an effective way to build customer loyalty, so offer it if you can. Just be sure to utilize cash flow forecasting or work with your accountant to gauge how much it will cost you long-term,” says Richmond.

If free shipping isn’t viable for your business, keep this fee low -- 30% said spending $21-$50 for delivery was agreeable. To bring down shipping costs, consider using shipping brokerages or building shipping into your pricing.

• Make delivery fast: At a point in the year when timing truly matters, it’s a good idea to offer express shipping. Thirty percent of consumers want their items faster, plus this allows you to charge for expedited shipping. On this front, customers appreciate communication. Encourage them to start seasonal shopping early and set their expectations with cut-off dates for when the last orders can be delivered in time for the holidays. You may also want to consider diversifying your supply and distribution channels by looking to both local manufacturers and service providers, and also large delivery partners, so you have options to fall back on if links in the chain are disrupted.

• Make shopping convenient: Match big retailer convenience by accepting multiple payment options, including e-wallets and by offering your products online. According to the survey, 50% of consumers are buying more online now post-pandemic, so it’s a good idea to meet them where they are.

• Build your reputation: Show your passion and small biz credentials in your branding and packaging. Don’t be shy about asking for reviews and referrals, as they’re key to building trust. And when you’re criticized online, always respond respectfully.

• Return-proof your products: Include detailed descriptions and pictures of your products to minimize returns. At the same time, consider offering more lenient policies for holiday-related returns. This both increases customer loyalty as well as extends the amount of time a return may impact your bottom line, as an extended period can allow for a slower trickle of negative growth.

• Use tech: Have a pulse-check on your cash flow by leaning into technology, like Xero’s cloud-based accounting platform, to automate tasks, manage inventory and track transactions in real-time. Technology investments can help ensure you’re constantly aware of how much return loss is acceptable per month as you plan inventory needs.

Check out the full study in Xero’s report into online shopping trends by visiting

“With a game plan that combines strategic actions, responsive communication and adaptability, small businesses can compete with the big box stores, and win customer hearts and minds over the holidays,” says Richmond.


Photo Credit: (c) ijeab / iStock via Getty Images Plus

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