Don’t exhaust your marketing efforts on gaining new customers solely. Focus on making your existing customers more satisfied through a loyalty program. You have a 60%-70% chance of selling to an existing customer. Whereas for a new customer your chances range between 5%-20%.
B2B customer loyalty is essential to maintain repeat customers and expand your customer base. But how do you create a B2B loyalty program that works?
Let’s get into that!
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The Difference Between B2C and B2B Loyalty Programs:
Although the aim of a B2B and B2C loyalty program can be the same, many factors set these two reward programs apart.
Many of these factors include:
The participants. B2B loyalty programs are usually more restrictive regarding who they allow to participate in their loyalty program. This includes customers who are not eligible to receive the reward or take part at all, such as government agencies. customers.B2C loyalty programs rarely have these restrictions and are open to all
Primary focus. B2C loyalty programs focus on the needs and pain points of individuals to develop loyalty. These companies also need to show individuals they share the same values. However, B2B companies direct their loyalty programs to solve the pain points of organizations and their decision-makers. This makes B2B loyalty programs more complex, as that customer information is difficult to gather.
Personalization. Because B2C companies have a larger consumer base, they don’t have to personalize their loyalty program tactics as much as B2B companies do. For example, think about the millions of customers Starbucks has compared to the few a B2B company would have. The B2B business would have a smaller consumer base that requires more personalization to deliver the best customer experience.
Purchasing decisions. B2B customers make rational purchasing decisions based on how products can elevate their businesses. On the other hand, B2C customers make emotional purchasing decisions based on desire, prestige, and style.
Summary: The Difference Between B2C and B2B Loyalty Programs:
The participants: B2B loyalty programs are usually more restrictive regarding who they allow participating in their loyalty program. B2C loyalty programs rarely have these restrictions and are open to all.
The primary focus: B2C loyalty programs focus on the needs and pain points of individuals to develop loyalty. B2B companies direct their loyalty programs to solve the pain points of organizations and their decision-makers.
Personalization approaches: B2C companies have a larger consumer base, so they don’t have to personalize their loyalty program tactics as much as B2B companies do.
Purchasing decisions: B2B customers make rational purchasing decisions based on how products can elevate their businesses. B2C customers make emotional purchasing decisions based on desire.
B2B Loyalty Programs: Challenges and Opportunities
As we’ve discussed, there are staggering differences between B2C and B2B loyalty programs. But even though those differences exist, both businesses share challenges and opportunities for their loyalty programs.
Let’s examine what those challenges and opportunities are.
B2B Loyalty Program Challenges
1.Documenting All The Details
When a business neglects to document the smallest to the biggest details, this can cause confusion and inconsistency within the loyalty program. When I say “details”, I’m referring to minor aspects of the loyalty program that businesses need to document to keep all their team members on the same page.
A few of the details you should document include are:
How do you define inactive accounts?
What happens to a member’s points if their account is inactive?
For figures like “$7.33” would you round up or down?
How do you handle expiration dates?
How do you handle reward expiration dates?
Companies should document all the details that cover the terms and conditions, the method of operation, relevant legal information, and other important information to the business.
Both B2C and B2B businesses should create material for team members on how to approach customers and any friction with the loyalty program. To stay consistent, businesses need to update these details regularly.
“43% of customers are more likely to spend more money at businesses they’re loyal to”
2.Control Over Customer Experience
According to Blue Corona, 80% of B2B buying decisions are based on the buyer’s customer experience. Only 20% of buyers go on the price or product/service.
This emphasizes how essential customer experience is but both B2C and B2B businesses have limited control over it in loyalty programs.
Sales representatives don’t have the time or opportunity to share valuable knowledge about the product/service and what makes them novel and beneficial to the buyer.
Companies should incorporate more feedback from their sales and marketing teams to improve the customer experience they deliver.
Additionally, brands need to use in-depth tools and refined sales techniques to provide their buyers with an informative, engaging, and consistent customer experience.
3.Managing Loyalty Program Data
Many businesses forget how crucial managing accurate data on their loyalty programs is. Brands fail to integrate reliable software to collect data at different points of the loyalty program.
Some businesses don’t know how to separate different data pools and what data is vital to track. This is an issue as businesses might not have accurate, detailed information and results to work with.
11% of businesses don’t calculate their Return on Investment (ROI) from loyalty programs. A further 17% of businesses calculate their ROI but don’t use the correct metrics.
Businesses must put an effective system in place to track the essential data of their loyalty programs. Companies need to integrate the required software to accurately collect data on customer satisfaction, ROI, and overall progress. But while doing this, companies must try to keep their method of data collection as organic as possible.
B2B Loyalty Program Opportunities
Every business would like to optimize its lead generation, and customer loyalty programs make this possible.
Companies can design their referral program, so consumers must exchange their contact details before accessing the incentive.
For example, “Subscribe to our newsletter and get $5 off your first purchase.” Businesses can use loyalty programs to leverage contacts for their lead generation strategy.
So, even if a customer hasn’t bought anything yet, brands can still market to them.
Brands must get the full picture of who their customers are. This helps them tailor their products and marketing techniques to appeal to their customers.
A customer loyalty program can help businesses find out more about their audience. Companies can do this by making a form part of their loyalty program.
Businesses can use the information captured through the form to deliver personalized user experiences and marketing campaigns that solve the pain points of thier clients. And provide them with what they need.
Gaining new customers is much more expensive than retaining old ones. And loyalty programs can help brands retain their existing customers.
Lenovo’s aim was for 500 firms to join, and over 700 joined.
The loyalty program participants sold 7x more products than the year before.
Lenovo’s target was $170 million, and they breezed over their target by 40%.
“80% of B2B buying decisions are based on a buyer’s direct or indirect customer experience,”
Desperate to stand out from their competitors, Celebrity Cruises designed a highly effective loyalty program.
Most of this companies sales stem from travel agents. So, Celebrity Cruises decided to incentivize the best agents for their loyalty.
This is what Celebrity Cruises did:
Agents can claim their booking sales and view their points in a user-friendly portal.
Agents can receive higher points from upselling to customers.
Celebrity Moments. This was a campaign that ran for three months. Agents could earn £500 in points by besting the leaderboard of booking points.
Celebrity Cruises offered valuable incentives that users could access easily.
Gamification was used to make the loyalty program more engaging.
Over 12 000 agents joined the loyalty program.
The loyalty program increased their revenue by 13%.
TRW is one of the best companies in the automotive aftermarket who also designed one of the best B2B loyalty programs (Automotive Diamonds).
Because of the high volume of competitors in TRW’s industry, the problem businesses were facing is that they could not directly communicate with their aftermarket. TRW created a loyalty program to solve these challenges.
This is what TRW did:
They connected workshops throughout Europe using a loyalty program.
Workshops sign-up and earn points for purchasing members’ products.
Workshops can redeem their points for a reward of their choice.
Created easy communication and evaluation amongst different workshops.
TWR used the data stored in different workshops to customize the loyalty program to their needs.
Allowing workshops to choose their rewards makes the loyalty program more engaging and the incentive more valuable.
The 7 Best Practices for B2B Loyalty Programs
Create a buyer persona. To provide your customers with a fantastic customer experience that is tailored to them, you need to create a buyer persona.
Measure the crucial metrics: Wondering what these metrics are? Your Repeat Customer Rate (RCR) measures how many repeat customers you have. Your CLV measures how much a customer spends on your business. And your Net Promoter Score (NPS) is how likely customers are to refer you.
Be loyal to your customers: Don’t treat your customers unfairly. Or make it difficult to solve their problems. Make doing business with your company seamless and reliable for your clients.
Tailor your content to existing customers: Remember earlier we spoke about how valuable existing customers are? Therefore tailor your marketing and sales content to keep and captivate your current consumers.
Don’t sound too “salesy”: You want to give clients a reason to do business with your B2B brand. Sound sincere and not like you’re trying to sell loyalty to them. Approach your clients like they are a friend and use relatable content to connect to them. Your clients need to get the impression that you want to help better thier business.
Be clear about your objectives: “Loyal” is a broad statement. What defines loyalty to you? Customers buying your products frequently? Customers referring more customers? Choose one way you would like your loyalty program to determine what your customers do. This will make measuring and increasing customer loyalty easier.
Make getting help easy: Would you want to be loyal to a brand that is difficult to contact? Be sure to add your company’s contact information in a visible area so clients can effortlessly reach out to you.
The 10 Best B2B Loyalty Program Rewards That Work
Tiered Incentives: Create tiered awards as TWR did. Tiered rewards will motivate your loyalty program participants to gain more points for more premium rewards.
Referral rewards: Incentivize your clients for referring new clients to your business. The more referrals a client brings in, the better the reward.
Educational content: Like Lenovo, offer courses, guides, or any form of educational content. Educational content will help your clients while giving them a reason to be loyal to your B2B company.
Co-marketing campaigns: Partner up with your clients and create activities and programs for your target audiences. This is a great way to leverage more clients while increasing your reputation.
Discounts for large orders: Reward your clients for bulk orders by offering them a discount on their next bulk order. Ensure the discount is only valid within a specific timeframe to add urgency around ordering from your business again.
Freebies: If you have a surplus of stock, you can give away freebies to your most high-value clients. This will be sure to keep them coming back!
Exclusive services: If clients have to pay more for any of your services such as delivery, offer those services for free.
Points per $ spent: This is a traditional incentive but still works like a charm. Offer a certain amount of points per x amount of dollars spent. For example, 10 points, per $1000 spent. Be sure to make it realistic for your clients to gain enough points to redeem a reward.
Anniversary incentives: If a client has been with you for x amount of time, surprise them by incentivizing them. Before you know it, word will spread, and everyone will flock to your company!
VIP experiences: Offer access to exclusive industry-related events, talks, and shows to give your customers a reason to be loyal to your business.
Frequently Asked Questions
Why Must B2B businesses have loyalty programs?
Loyalty programs provide B2B businesses with various opportunities including competitive advantage, saving money, and increasing their customer lifetime value. However, there are challenges for B2B loyalty programs. Read our article to find out what these challenges are and how to solve them.
What Are Effective B2B Loyalty Rewards?
Rewards that customers love for B2B loyalty programs included tiered rewards, discounts, VIP experiences, and much more! Read this article for the three best B2B loyalty programs and the best practices. We also include solutions to challenges B2B businesses face for loyalty programs.
What are examples of the best B2B loyalty programs?
Brands that have the best B2B loyalty programs are TRW, Lenovo, and Celebrity Cruises. To find out what these brands did and what the results of their loyalty programs were read this full article. You will also find out the best practices for B2B loyalty programs and the best rewards ideas.