Loyalty programs in B2C brands are adding a lot of value for brands, manufacturers, and retailers. B2B, however, is just now starting to take off. B2B manufacturers and distributors view loyalty differently than B2C. However, it is clear that loyal customers drive perpetual growth and boost brand affinity. According to Pareto’s principle, 80% of your sales come from 20% of your customers. Research reports state that a 5% hike in customer loyalty can increase gross margins between 25%-100%. 64% of brands, manufacturers, distributors and retailers confessed that their loyalty program is the best way to authentically connect and engage with customers. Hence loyalty programs are imperative in the B2B market to increase retention and reduce customer churn. A loyalty program should be easy to access and engage, relevant to your industry trends, and appealing to your target audience. Research from Forrester states that B2B companies can benefit a lot from customer loyalty programs and have a lot to learn from B2C companies.
Here are some benefits of B2B loyalty programs:
- Retaining existing customers is more cost-effective than acquiring new ones
- Loyal customers keep returning to do business with you, increasing their lifetime value
- It’s great for data tracking and analyzing. You can gain insights into customer information for future research
- It gives you a competitive advantage and becomes a differentiating factor for your business
- Loyal customers turn into brand advocates who drive additional referrals
- Rebates can be offered as an incentive to your customers based on their engagement
- Rewards can be customized for training, warranty registrations, and research
- Identify and segment your key customers and their buying potential and habits
- Define your business goals and then tailor your loyalty program accordingly
- Monitor customer interactions across all touch points
- Segment your target base to personalize the program for each segment effectively
- Create a customer feedback system
- Identify the relevant incentives and triggers that can be employed to meet the business objectives
- Have a mechanism to score and rank your most valuable customers
- Understand each customer’s business model to create personalized and high perceived value rewards
In most cases, B2B companies have a much smaller customer base as compared to B2C and that unfolds opportunities to foster personal relationships with customers. Going the extra mile in serving your loyal customers greatly impacts their purchasing behavior.
So, here are some best practices for a lucrative B2B loyalty program:
- Plan a whiteglove onboarding program – It’s rather true that the first impression is the last impression. That’s what frames your customers’ brand perception and sets the tone for your entire relationship. An excellent onboarding program makes customers feel valued and unique. Make sure your customers are well guided, supported and nurtured through various tactics and touchpoints like video training or tutorials, live chat, phone support webinars and personalized follow up emails.
- Offer hyper personalization – While Starbucks has 15 million customers, just as successful B2B company Celestica has only 10. Which means that a personalized approach is a great way to increase customer retention. Once you have valuable insights into their purchasing habits, spends, wants and needs, create a seamless loyalty program that matches their preferences. Since B2B companies court relatively smaller customer bases, personalizing their experience heightens your brand value. Invite your best customers on corporate trips or conferences to special locales.
- Ideal customer experience – Understand your ideal customer profile (ICP) to optimize the customer experience. Ensure your loyalty program is super convenient and can be easily accessed. It should also be optimized for clarity and consumption. It should be a no brainer, exciting and engaging with relevant and meaningful reward options. Enhancing the customer experience and improving brand value leads to customer retention.
- Analyze customer feedback and data – Data helps you identify patterns. Have surveys and customer feedback mechanisms to understand what they want and what motivates their purchasing decisions and how you can serve them better. Use customer feedback tools like Qualtrics, Medallia, Foresee and the like.
Business loyalty program strategies inspired by B2C
- Accessing a loyalty program through a mobile app is a convenient and easy method to engage customers. Digital experience for the on-the-go generation is commonplace with B2C companies. Through mobile apps, B2B organizations can offer real time program alerts, instant push notifications and a variety of customer benefits. Besides, they can collect a wealth of customer data.
- Shared values matter. Show your customers not just what you stand for but also what you stand up for. Brands that are authentic in their corporate social responsibility have higher retention rates. If your business is a force for good, customers relate to and connect with you on a personal level. The Body Shop’s loyalty program called the Love Your Body Club gives members the choice to donate their loyalty rewards toward a charity.
- More than talking to customers, it’s more important than ever to let customers talk to each other through user generated content. Since the inception of social media, this strategy has gained momentum. User generated content tools like ratings and reviews and questions & answers are an integral part of loyalty programs. Ratings and reviews give an insight into a customer’s actual experience with your brand. 46% of shoppers who are members of loyalty programs confessed that points are integral to their buying decisions. They would love the opportunity to earn more points by submitting their reviews or product photos. Beauty retailer 100%Pure offers an extensive loyalty program that includes points for UGC like reviews.