In the modern business world, customer loyalty is difficult to achieve and even more challenging to maintain. Over half of Americans have reported switching companies in the last year alone despite also reporting that they belong to a brand or retailer loyalty program. For B2B companies, customer loyalty is critical to success simply because these companies operate based on more lengthy production cycles. B2B companies must also perform more extensive outreach and sales efforts compared to their B2C counterparts. For this reason, B2B loyalty programs that also feature a referral marketing platform have become a key way to remain competitive in today’s market.
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B2B Loyalty: Reasons for Customers to Return
Everyone likes presents and rewards. The modern consumer is much more likely to patron a business that offers some sort of loyalty rewards program whether in the form of gifts or discounts, and 63% of consumers will choose a brand with a loyalty program over one that does not offer rewards. In fact, as many as 46% of consumers reported changing brands in order to maximize loyalty benefits. Businesses may not be human beings, but they are certainly run by individuals who are looking to get the best deals for their company. Your business customers are much more likely to become long-term customers and spend more when you offer rewards for purchases. Statistics show that even a 5% increase in customer retention rate can result in a 25 to 95% increase in profits.
Differentiation, Even Before the Purchase
No niche is without competition. In order to stand out to consumers, your company must offer something that others do not. Unfortunately, there are very few ways to differentiate your store, online or physical, from competitors. Creating or acquiring new and rare products is time-consuming, challenging, and may, in the end, produce a poor ROI. On the other hand, working to demonstrate customer service, appreciation, and respect through loyalty programs is a more effective way to retain customers.
During a recent survey conducted by Epsilon, 80% of consumers want a personalized experience from a company. Customers that find a personalized experience appealing are ten times more likely to become valuable customers who average fifteen transactions per year. Establishing a loyalty program allows you to give discounts, exclusive access to products and even upgraded customer care, which is a great way for your company to distinguish itself and provide a personal experience that can then turn potential customers into loyal buyers.
While much of consumer research is targeted at individual buyers, the same logic still holds for B2B loyalty programs. According to Forrester Analyst Emily Collins, B2B companies can benefit from the same three basic tenets that are valued by B2C marketers:
- Consistent consumer interaction
- Understanding of consumer needs and motivations
- Ability to adapt to the ever-changing consumer market landscape
B2B Loyalty Upgraded with Referrals
Loyal customers that are satisfied with a brand or product are much more likely to refer a friend to your company. This is as true for B2B interactions as it is for their B2C counterparts. Modern market experts have advocated for expanding the traditional rewards schema by adding points for referrals. Companies with the basic dashboards and point systems already on hand will have no trouble expanding their rewards system.
Referral programs that offer customers a few extra loyalty perks are appealing to consumers, but they can also be extremely valuable for your company. While it is difficult to gauge the monetary value of a customer referral, the influence of consumer recommendation has grown dramatically in the last decade.
Modern consumers are often apathetic to advertisements. A 2017 McCann survey found that nearly half of Americans don’t trust advertisers and are more willing to trust a friend or colleague, or even company reviews. Approximately 85% of B2B decision makers start the buying process after a referral from a friend or colleague. While excellent products and strong customer service will elicit referrals, consumers are much more likely to make the effort of mentioning your business to a friend or colleague if they are also receiving some sort of benefit.
Referrals are also unique because they can transcend the limits of traditional advertising. While there are certainly times and places where ads are not welcome, most people will not turn down a conversation with a friend or colleague. Furthermore, referrals give B2B marketers access to a broader pool in the professional field.
Easy to Measure
Traditionally, consumer loyalty is notoriously difficult to measure with both B2C and B2B models. Experts like Curtis N Bingham argue that instead of measuring loyalty, companies should be focused on interaction, which is a much more reliable metric that is often already embedded in modern customer loyalty programs.