By Mark Roper, Head of UK Merchant Services at American Express
Working together with other local merchants is a neighbourly thing to do, but according to our new Value of Collaboration report, it makes strong business sense too.
We set out to understand what the business of collaboration was all about and whether it could affect your bottom line. Our research discovered that small merchants that are working together via activities such as joint marketing, loyalty schemes, joint promotions and local events can boost their sales by an average of up to £30,000 a year.
And it’s not just the formal collaboration that has a financial impact. Things like minding each other’s shops, taking in deliveries, doing a bank run or providing loose change may seem to be just friendly gestures, but in practice these activities could save you an average of £3,000 per year in labour costs. It’s well worth knocking on neighbours’ doors to see how you can support each other or work together more!
The business owners we spoke to gave us their top tips:
Focus on customer loyalty: Having an emotional connection is important when it comes to creating long term customer loyalty. Recommending other local businesses is a great starting point and by working together, you can meet customer needs in new and interesting ways. For example, a florist and gift shop could combine forces and offer a special deal when a birthday bouquet and a greetings card are purchased together.
Offer unique experiences: Consider joining forces with other independent merchants in your area to put on an event. This could be a cheese and wine evening hosted by a local deli and wine merchant, or an entire high street clubbing together to host a seasonal street market.
Lend a helping hand: If you don’t already give or receive a helping hand from other local independent shops, like providing loose change, minding each others’ shops, taking in deliveries or simply discussing local business issues, getting to know each other more is a good place to start.
The small merchants that took part in our survey also told us that they plan to collaborate more this year. Whether that is for a big parade at Christmas or to start new innovative shopping schemes, it is clear that there is real business value in collaborating.