Local businesses don’t have their own loyalty programs but can now benefit from tapping into bank programs. “Local is the key to our strategy,” says Jim Douglass, SVP at Cartera, a Lexington, Massachusetts-based company that manages loyalty programs for many top banks and credit card companies. Douglass sees 5 million SMBs potentially seeking to extend their customer relationship via various bank loyalty programs.

“In our portfolio,” Douglass notes, “we have cash back, miles cards, points cards. Consumers say: ‘This is the currency I want to collect. I want to go on a trip for free, or save points for services I want to get.’ ”

For their part, SMBs not only get loyalty rewards, they also get useful data. “We can show incremental shoppers, prove ROI for new shoppers and move their behavior,” says Douglass. “We can tell retailers who has shopped and not shopped.”

The biggest chunk of Cartera’s business still comes from national, large retailers. “We have a national team focusing on large retailers. There are 750 [retailers] doing $100 million in revenues,” he says. One of Cartera’s best white-labeled relationships, for example, is with Cabela’s, a Midwest outdoor sporting goods company. “They have a passionate base of card holders,” he says.

But the potential volume of local SMBs make them strategically important for Cartera’s next wave of growth. Douglass notes that the company is building partnerships with companies that have relationships with local retailers, such as Yellow Pages and merchant processors. With loyalty, Douglass notes that “we have a better mousetrap. We are a classic substitute.”

Cartera SVP Jim Douglass is speaking on The Shift to Interactive Local Commerce panel at ILM East, along with Charlie Kim of Next Jump and Jaidev Shergill of Bundle. Register here.