BIA/Kelsey’s Local Commerce Monitor (Wave 18) shows just how popular customer loyalty programs are to SMBs. Currently, 29 percent offer them, with the number skewing higher (43 percent) for retail businesses.

But despite the introduction of several loyalty platforms and apps over the past few years, most SMBs are doing it on their own. 94 percent in fact report they are operating loyalty programs themselves. 64 percent are still in paper form.

Their biggest reason is to track customer behavior and incentivize repeat business. 68 percent offer rebates and credits, while less-used rewards include points, sweepstakes and charitable donations. Popular formats include prepaid deals and discount offers.

Beyond current use, SMBs report a positive outlook. In fact, those with loyalty programs expect that 37 percent of business in the next year will come from some type of promotion or discount, with many of these linked to loyalty programs.

The takeaway:  loyalty programs will be an important component of the increasingly-robust array of marketing services being offered by SMBs as they seek greater connection with their customers. Anyone building SMB marketing tools should take note.

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This post previews the full report, which will be available Monday for BIA/Kelsey clients and can be accessed here.