Creating successful B2B loyalty programs

There’s a key truism in customer retention: “a good customer experience is never forgotten.” If your customers have a memorable experience, they are more likely to return, tell their friends or engage with your brand. Seeing the clear benefits, 84% of B2B companies now embrace this customer experience model. Adopting this model enables businesses to improve and maintain their relationships with partners, suppliers and buyers. This blog explains what B2B rewards entail, and outlines methods to structure an effective B2B loyalty program.

What does a B2B loyalty program involve?

A B2B (i.e. business to business) loyalty program is a customer retention strategy. Like B2C rewards programs, they contain specifically-designed features to cultivate brand loyalty. B2B rewards programs differ greatly from their B2C counterparts, however, regarding incentives and progression.

And, with the B2B ecommerce market predicted to top $1.8 (USD) trillion by 2023, companies are understandably growing their market share. The most effective method is ensuring existing customers remain engaged, loyal and satisfied.

Differences between B2B and B2C loyalty programs

B2B and B2C loyalty programs share similar objectives to maximise revenue. They are both designed to retain customers and encourage repeat purchases. However, B2B loyalty programs require customised, customer-centric strategies to succeed. When implemented correctly, here are some key benefits of B2B loyalty programs:

1. Improved profit margins

Many businesses make the mistake of paying astronomical customer acquisition costs. Instead, creating a robust customer loyalty program is an ideal way to increase company profits.

For instance, members can earn points for each purchase, which translates into rewards. These may be gift cards or discounts, which offset the price of the desired product, without cheapening it. The most effective B2B loyalty programs are entirely customer-focused. These provide real value, whilst showing customers you value their business.

2. Increased customer satisfaction

When done correctly, B2B loyalty programs can replace the traditional cycle of heavy discounting and promotions. Unlike these tactics, loyalty programs reduce customer discounts by expanding customer benefits in tangible and intangible ways. This can be achieved by offering perks, such as helping customers optimise their product mix – by selling more of the popular products, for instance – to drive high revenue.

Such gestures improve your relationship. This makes contact with customers easier, while increasing customer advocacy, retention and satisfaction. In addition, you’ll see increased revenue and profitability.

3. Improved digital engagement

The B2C sector has exemplified the value of digital engagement. Along with attracting and retaining customers, it generates the “engagement flywheel”. This concept utilises continual customer insights to inspire ideas for products and services. The process deepens your relationship with customers, which ensures your company’s continual growth.

The B2B sector is yet to realise the full benefits of utilising digital engagement. However, well-structured loyalty programs can launch your company’s digital engagement efforts. By tailoring digital techniques and channels to suit your customer base, you can accelerate the engagement flywheel.

Steps to create an effective B2B program

Creating successful B2B loyalty programs isn’t as simple as replicating a B2C program. However, you can benefit from decades of success in the B2C space. To create a winning B2B loyalty program, adapt B2C techniques to your business.

1. Understand your business buyers

The foundation of any successful rewards program is well thought-out segmentation strategy. To start this process, you must identify and understand your various customer segments. However, this is more complex than identifying B2C segments, for several reasons. Firstly, B2B buyers are a largely under-analysed group. Secondly, transactions are performed via customer-company auspices, making it difficult to identify individual buyers. And, the customer population is fragmented.

That said, there are useful ways to segment B2B customers, such as:

• Size – Large companies may have different priorities and purchasing habits than smaller ones.
• Customer types – Those strategic to business growth, frequent customers and smaller customers (who merely “transact” with your business).
• Behaviour – Customers who are sensitive to either price, delivery or quality.
• Needs – What your customer groups consider most important (i.e. esteem, power or security, etc.).

2. Encourage optimal customer behaviour

It’s important to focus on current, desired behaviours, and behaviours that support your overall business goals. Such behaviours may include customers purchasing a wide range of products/services, referring new businesses to you or ensuring customers write reviews.

Consider which customer behaviours are priorities and create incentives to encourage them (i.e. by offering discount codes, early access to new products, etc.). And, understand your targeted behaviours may vary on location, store type and size and buyer role. What motivates the business’ vice president may not mean anything to the head of procurement.

3. Simple program design

The best B2B loyalty programs are intuitive for the sales team (to easily promote enrolment) and the customer (so they will use it). Start with a simple reward concept (i.e. points for each purchase, etc.) This way, you can effectively test which features deliver results, and gradually expand your loyalty program.

Ensure the app you design for the program and its instructions are user-friendly. Most importantly, the basic structure of the program (i.e. point accumulation, benefits, tiers, etc.) is easy to understand.

4. Embrace a digital mindset

To accelerate the customer engagement flywheel, B2B loyalty programs require the same digital mindset used in B2C programs. Tools such as the True Rewards digital gifting dashboards enable you to provide customers and salespeople with a clear view of customer engagement. With this data, you can optimise your business and increase profits. This is particularly attractive to SMEs; especially those without a digital strategy.

You can offer the loyalty program through various digital channels, to suit your customers’ varying needs. With this data, you can tailor loyalty incentives to customers’ interests, preferences and purchasing habits.

As the economy recovers from COVID, B2B loyalty programs will skyrocket. And, as your relationship with fellow businesses strengthens, switching costs will grow. Are you ready to start your own B2B loyalty program? For personalised advice, contact us to discuss physical gift cards, digital gift cards, and B2B loyalty strategies.