Higher-Spending SMBs Estimate Nearly One-Third of Annual Sales Driven by Promotions and Discount Deals - BIA/Kelsey Survey

CHANTILLY, Va., Nov. 11, 2014 /PRNewswire/ -- As the 2014 holiday shopping season gears up, consumers can expect to see an avalanche of promotions and discount offers, not only from major brands and retailers, but from their local, small business merchants as well. According to the latest wave of BIA/Kelsey's Local Commerce Monitor™ (LCM) survey of small and medium-sized businesses (SMBs), higher-spending SMBs—those that spend more than $25,000 annually on advertising and promotion—estimate 31.7 percent of their total sales 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 (infographic: http://bit.ly/1zgP9lw).

"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. Among SMB Plus Spenders who do not currently offer a loyalty program, 21.5 percent report they are likely to add one in the next 12 months.

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. 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 (43.1 percent) offer a program that is homegrown and paper-based.

BIA/Kelsey's upcoming LEADING IN LOCAL: Interactive Local Media conference, Dec. 3-5, in San Francisco, will take a close look at local merchants and their use of digital marketing techniques for promotions and for enhancing customer loyalty. In addition to BIA/Kelsey's LCM data, the conference will feature a presentation based on new BIA/Kelsey research on the state of marketing with card-linked offers, including interviews with executives from top financial institutions, publishers, technology firms and merchants. A session titled, BIA/Kelsey-Cardlinx Research: The Impact of New Loyalty Programs, will feature BIA/Kelsey Chief Analyst and VP Peter Krasilovsky, along with research partner CardLinx Association CEO Silvio Tavares and Cardlytics CMO Kasey Byrne.

More information about the conference, including the complete agenda, list of speakers and online registration, is available online at: http://www.biakelsey.com/LeadingInLocalILM.

About Local Commerce Monitor™
Local Commerce Monitor™ (LCM) is BIA/Kelsey's ongoing tracking survey of small and medium-sized businesses conducted online with research partner Ipsos. The survey measures where SMBs are spending their advertising and promotional budgets and how their media usage and spending habits are evolving.

The survey covers 50 different media and platforms used by SMBs for advertising and promotion. These media fall into 10 top-level media categories: online (e.g., search, display ads, blogs); traditional (e.g., direct mail, newspapers); mobile (e.g., search, SMS, display); local coupons (print and online); social (e.g., Facebook, Twitter); video (e.g., website videos, YouTube); broadcast; local directories (print and online); giveaway items; and community sponsorships.

Updates to this wave of the survey questionnaire included additions to the list of media (such as Pinterest, Instagram, streaming audio and promoted Tweets), as well as additional questions to cover social engagement, click fraud, agency relationships, use of mobile devices in-store, customer incentives and use of transaction data.

For this study, SMB is defined as a business having from 1 to 99 employees. Local Commerce Monitor draws its sample of business respondents from a mix of nationally scoped MSAs, primarily based on first- and second-tier markets. Local Commerce Monitor Wave 18 was conducted in July 2014 via an online survey of 546 SMBs. The sample consists of two sub-samples, a Core group (SMBs that spend under $25,000 annually on media) and a Plus Spenders group (SMBs that spend over $25,000 annually on media). In Wave 18, there were 300 in the Core group and 246 in the Plus Spenders group. 

About BIA/Kelsey
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey's annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company's Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey).

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