Business to business (B2B) companies are highly dependent on loyalty, perhaps even more so than your standard business to consumer firm. Because so many B2B purchases have lengthy purchase cycles that require significant sales effort, if customer loyalty were to fall by the wayside, tons of these companies would become completely unprofitable. That’s why B2B loyalty programs are quite often an effective way to incentivize contract renewals, differentiate your company, and prompt happy clients to speak positively about your business.
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B2B Loyalty: Reasons for Customers to Come Back
The simple logic of customer loyalty programs is that if you give the right incentives to your customers, whether they’re individual shoppers or other businesses, it will be helpful in cutting short the lengthy buying cycle of this industry. And loyalty programs work like magic in incentivizing your customer’s purchase or any other non-buying behavior, like sharing about your product on social media. Incentives are definitely a huge reason for them to become your regular if not frequent buyers. Through this, the lifetime value of a customer is enhanced and it gets reflected in your revenue numbers. After all, 46% of shoppers change the brands they buy to maximize loyalty benefits.
B2B Loyalty Marketing: Differentiation, Even Before the Purchase
Frankly speaking, there is very little you can do to differentiate your store, online or physical, based on the product segments. Even if you are a manufacturer, coming up with a completely new and magical product is a work of a lot of money and time. Thus, the other thing, in fact the only thing that can differentiate you from the fierce competitors is the way you treat your customers. And loyalty programs are a great tool to do that. Through your loyalty program, if you can give your customers more than a mere product by giving them a discount on their next purchase or exclusive access to your premium products and customer care services, it’s a clear cut differentiating factor. Your innovative ways to reward your customers can become your USP. Remember that it can be a powerful weapon to stay relevant in the market in which ecommerce giants like Amazon are also entering!
Think only the B2C services of your company will benefit from a loyalty program? Think again. Forrester analyst Emily Collins notes, “B2B companies stand to benefit from three core tenets valued by B2C marketers, which have nothing to do with discounting and everything to do with building a flexible, customer-obsessed loyalty strategy.” These three values are:
- A deep understanding of customer needs and motivations
- Consistent customer interactions across organizational silos
- An adaptive strategy that accounts for the changing customer and market landscape
B2B Loyalty, Upgraded with Referrals
Loyalty and referrals always go hand in hand. It’s quite understandable too. Unless and until the customer is loyal, he will not tell friends about your products. Secondly, with a loyalty program in your hand, you have all the basic infrastructure, like a robust dashboard with accounts, points, a reward system, and customer data. That is exactly what is needed to run a good and healthy referral program. The gathering of the above-mentioned resources needs a systematic investment of time and money. It’s wise enough to use the same resources for two activities.
Besides, referrals come from trusted business colleagues, peers, or friends. They are not forwarded by marketers. Thus, the trust level is almost unmatchable to any other paid campaigns. It’s not a coincidence that the vast majority (more than 80%) of Americans seek recommendations when making a purchase of any kind. A whopping 84% of B2B decision-makers start the buying process with a referral. What makes it even favorable is the minimum investment that such referral programs need. You are using your existing customers to get more customers from their circle. Despite this low barrier to starting a referral program, only 30% of B2B companies have a formalized one!
Check out our post about B2B advocate marketing with referrals and reviews to learn more about getting your satisfied customers to spread the word about your brand!
For more information about combining your loyalty program with advocate marketing tactics like referrals, check out our white paper, “Advocate Loyalty: A Four-Point Strategy!”