Offering local deals to employees creates a strong sense of affinity. David Rowley reports

It is fairly cheap. It is fairly effortless. It will offer an immediate win for employees, but you may not have given it much thought. Getting 20pc off at the local dry-cleaners, bar, restaurant or sandwich shop, are all quick deals for a growing band of confident and bullish discount providers. I

f these sound a bit humdrum, consider the clever psychology at work in these deals. Lealta Benefits operations director Michael Dougherty says: "When you go into the restaurant and pay 20pc less than the other people there, and you are producing that card with your employer's logo on it, there is a stronger sense of affinity than something you only use once a year."

And unlike some of the other providers spoken to for this article, Lealta believes that local discounts are the most exciting offers you can give staff. "Mentioning some big high-street names [to employers] is easy for a quick win when selling these schemes," says Dougherty, "but if you are speaking to employees who are receiving one of our benefit cards where they would like to get a discount, it is the local restaurant, the gym next door to the site that they work at or anything local.

"When it is made up of just big brands that are not close to the site of the local employer, people feel that they are missing out. The local deals are immediate, employees can go to the restaurant with 15pc off on the way home from work."

Lealta boasts of being able to get discounts in volume locally and focus on going beyond the dry-cleaner, cafe, hairdresser staples of local discounts. Garage services, takeaways, hotels, florists, garden centres, gyms and jewellers are all key areas for it to find local discounts.

One advantage in getting a discount at a shop or service within a three-mile radius of your employer is that it can often be easier than securing a deal with a national network of shops. Familiarity helps.

Employee discount firm Asperity Employee Benefits has seen an upward trend in the number of local deals recently. Managing director Glenn Elliott says: "Local shops and services are often really easy to work with because there is a local bond. What we say to new clients is to stick your head out of the door and see what companies you can see."

Councils setting up these schemes see it as a way of supporting the local business community. This in itself could be a way of stopping the character-stripping process many towns have gone through, as local independent shops have been replaced by national high-street chains.

P&MM head of employee benefits Richard Davies says: "Everyone is always whingeing about local shops closing. This is a way to help the independent traders build their traffic flows."

Not that the national chains are immune to a little local charm, according to Davies, those that are run on a franchise basis are much more likely to offer a local discount than a national discount. He cites the example of winning a 20pc discount at a branch of the national baguette sandwich chain Subway for a local client that was not repeated elsewhere.

There is a good business logic for local traders to get involved, as it can be seen as a targeted way to increase trade - they will get a better feel for how successful the scheme is than for a national deal.

And they will even be interested if your employer does not have many employees. Most providers negotiate on a collective basis to win the discounts.

Davies says: "If I phone up and say we have 15,000 employees in Bristol, there is a greater appetite than if I phone up and say we have 250 at one firm."

Opposition

Not all discount providers are so enthusiastic about local discounts. Peoplevalue is one provider that has decided against them for a number of reasons.

Managing director Michael Morgan says: "What people want from us is high-street brands, they want to see discounts on the Comets, Asdas and the Homebases of the world rather than 10pc off at the local hairdressers.

"From our experience, it is time consuming to establish the discounts within a specific geography as well. And secondly, how does the employee demonstrate that the discount is available to them unless they have some form of recognised card or something of that nature? If the employee goes in and asks for the discount and they are refused, they are going to feel foolish, and that is going to leave a really bad taste in the employee's mouth. That has a detrimental effect on the whole purpose of the scheme, which is try to build a bond between the employee and the employer."

The arguments against this are that problems over discounts being refused can be helped by assigning one person in the firm to liaise with all the local firms providing discounts.

Elsewhere, other providers are equally not convinced that local discounts are used that much, but they do add colour to a scheme.

Asperity's Elliott says: "We put the local discounts in a special place [in our online service]. They do not get as much usage, but they add colour to a scheme. It gives the employer something unique - the ability to be able to put local offers adds a client footprint. It shows to employees they have not just bought something off the shelf."

Community values

One area all providers agree on is the potential for online communities of employees to meet, chat and exchange unwanted goods on their websites. This could be a network of people in the local area or simply people who use the providers' services.

Where a local council has negotiated discounts out of a sense of duty to local businesses, it seems a shame to stop there. And Asperity reports that local providers have also got involved in sponsoring competitions for staff, and paying for advertising space on the discount website.

Meanwhile, Peoplevalue is talking of classified adverts and free exchange of unwanted goods between staff at all its clients nationwide.

Common local discounts

Clothing shops

Florists

Furniture shops

Garage services, tyres and exhaust specialists

Garden centres

Health and fitness clubs

Hotels

Jewellers

Restaurants

Sport shops

Takeaway food outlets