The Effect of Physical Location on Customer Retention

How far will people go for loyalty?

As technological advances turn us all into customers of the world market, there’s a counter-culture emerging among people craving a return to the personal approach.

Studies show that businesses that maintain a good relationship with their local patrons are thriving, as consumers look to search out more unique experiences, whether that be shopping independent or looking for more nuanced customer service. Just look at how independent coffee shops or boutiques are able to compete with larger chains on many of our high streets – good customer service and engagement make all the difference.

A study by Bright Local found that customers will travel an average of 12-14 minutes by car for services they consider to be regular stops – businesses such as the gym, pub, hairdresser or a local convenience store.

While this increases to up to 20 minutes for vital or specialised trips such as the doctors, mechanics or a particularly high-quality restaurant, this is still a fairly small margin which suggests that a business’s core audience is living no more than a few miles away.

This is really essential to consider when you’re looking for a partners to offer a loyalty programme – you need excellent coverage in your target areas.

HOW WE want to spend

A similar study by Marketforce supports this further, especially when it comes to how we wish to handle our money.

Phishing, spam scares and mistrust of expensive ‘helplines’ have significantly affected how people wish to deal with their banking, meaning that customers often feel more secure and confident dealing with a person in real life.

Although this seems to affect older generations more significantly than the digitally-native under 24s, 63% of those surveyed preferred to visit a traditional bank as their main means of gaining financial advice.

Being able to build this trust is essential for inspiring customer loyalty – problem is it’s not always cost-effective or efficient.

Businesses can take advantage of these findings by championing the local spirit – they must use a loyalty provider who has a wide range of well-known offers, but can complement them with local discounts helping to foster a community spirit.


Geotagging and localised marketing 

Geotagging is a great way to explore this further, especially when used in conjunction with a loyalty platform.

By collecting customers’ postcodes when they engage with their service in some way, businesses can quickly build up a picture of their audience in an efficient and non-invasive manner.

Any good loyalty programme can offer big names that drive interest – but also make room for a local presence.

With consumers noticeably more likely to pay attention to a product that they feel is specifically aimed at them, click-through rates are much more successful on a well-targeted campaign than a more generic advertisement.

Organisations need to experiment with different offerings and add them to the information they already know – rough age of customer, average spend, etc., in order to guarantee a better return on investment from their advertising budget.

What about budget spend?

Keep an open mind when it comes to that advertising budget, too, and consider how a customer’s physical location might impact the best way to engage with them.

A feature in the local newspaper may not seem as glamorous as a glossy social media advert, but can be instrumental in securing business in a given local area, especially if your key target market is of the generation that still expects printed press.


Once you have your new client base hooked, how can you keep them?

We’ve already touched upon the importance of making sure your loyalty programme provides rewards and discounts that have a wide enough coverage – people likely won’t be travelling more than 20 minutes to redeem a restaurant gift card, for example, which suggests they won’t complete the desired action you want them to in order to get it.

If you’re struggling with sales or contract renewals in a certain area, it’s well worth looking at how easy it is to redeem or use the discounts you’re offering in that area.