Barclays-funded research finds a simple smile could be the key to business success

Posted Thursday 13 June 2013

Professor Robert Blackburn from Kingston Business School carried out the research. A simple smile and a friendly greeting can make customers feel much more loyal towards small independent companies, according to new Kingston Business School research.

The study, which examined the retail behaviour of 2,006 consumers and the business practices of 1,216 decision makers in small and medium-sized enterprises, revealed that a smile and a friendly hello was the most common reason why consumers felt loyal towards independent retailers. However, only just over half those sampled stated their small business employed this practice.

Three in five consumers were also willing to pay more for a product from a small independent shop rather than deal with a large corporate retailer, the study funded by Barclays Business Banking and carried out by Kingston's Small Business Research Centre suggested.

"Small and medium-sized enterprises are in a unique position to embrace these traditional values of personal customer contact and loyalty and should build on their natural competitive advantages to make a real difference to survival and growth," lead researcher Professor Robert Blackburn said.

More than a third of loyal consumers said they were repeat customers because of excellent service and one in five said they valued businesses remembering their usual order. However, only around half of businesses involved in the study kept a record of customers' previous orders.

The research also discovered that less than a third of business respondents considered retaining or growing their current customer base to be their main priority to achieve growth during the next year. Only 50 per cent would encourage word of mouth recommendations by regular customers to grow or survive.

"While the majority of decision makers recognise the importance of personal relationships with customers, they are failing to develop their own customer loyalty strategies," Professor Blackburn said. "This shows a worrying loyalty gap among British small and medium-sized enterprises, where they could be failing to capitalise on their capability to provide customers with a highly personalised service."

The study is one of a series of research projects carried out by Kingston's Small Business Research Centre for Barclays.