How do you build a loyal customer base in the B2B market? Why do people have a certain affinity for particular brands? Put simply, customers value how you make them feel. Their experience with your products and services has to be positive, or they'll go elsewhere next time. That's why more than 90% of B2C companies have some form of loyalty programme.
Sadly 60% of B2B customers reported they had never had an experience with a brand that made them feel special. This needs to change and fast! Fortunately, at Ovation Incentives, we have over 20 years of experience in the B2B loyalty and rewards industry. We can help guide you through your journey of introducing and running an effective B2B loyalty campaign.
In this article, we'll discuss the differences between B2C and B2B loyalty programmes. You'll discover how loyalty programmes can help you retain your customers and help you develop ideas for your B2B customer retention strategy.
What is a B2B loyalty programme?
A B2B loyalty programme is a customer retention solution and marketing strategy that encourages its customers to keep shopping from your business. They often have specific features and loyalty logic to establish stronger relationships with the companies they sell to.
Some analysts predict the B2B eCommerce market will reach $1.8 Trillion by 2023. Therefore, it's no mystery why companies are looking to increase their market share. But to grow sustainably, you'll first need to ensure your existing customer base stays loyal by delivering a positive experience. After all, it's easier and more cost-effective to retain your current customers than to acquire new ones.
Types of B2B loyalty programmes
Members of a perks-based loyalty programme can access all the benefits from the moment they enrol. One downside of this approach is that it doesn't incentivise progression through gamification, tiers or points-based systems. B2B companies can use the perks approach to build a VIP club for their clients. They can also engage their members through surveys or prize draws, but if the partnership ends or they don't purchase anything within a specified timeframe, they'll lose their membership access.
A tiered loyalty programme usually depends on how much the member spends or how many points they earn. Instead of letting customers progress independently, they get directly placed into a tier depending on the deal's volume. The higher the tier level, the better the rewards members can receive, although clients will have the option to downgrade or upgrade.
Offering education and training to your partners and suppliers can be mutually beneficial. Co-operative rewards can help them to perform better and help advance your business relationship. With smaller and less experienced clients, sharing knowledge in marketing, sales, productivity hacks, and other helpful tips can encourage growth, and they'll acknowledge you as part of their success story.
Branded merchandise, gift packages, and other items can also work well for B2B loyalty programmes. Client companies can receive these rewards as a 'free bonus' along with their order and can easily be distributed amongst the team to raise staff morale. This can be cost-effective if you already have a strong relationship with your partners.
Experiential rewards can include member events to free movie passes for a client's employees. Experiences are most effective when personalised to the individuals' interests. Rewards don't need to be expensive but should be innovative enough to thrill your customers. After all, making your client's employees happy is vital to pleasing your client.
Word-of-mouth marketing is essential in B2B and can be one of the most effective ways to gain members. You should reward those customers who help spread the word and recommend the loyalty programme to others. As membership requires direct business, one referred client potentially means additional revenue.
A coalition loyalty programme is when two or more businesses share resources to improve customer retention. These resources could include allowing companies to collect user data to gain insight. Coalitions aren't always the same as B2B loyalty programmes, despite two (or more) companies involved. The visible side of a coalition loyalty programme focuses on rewarding customers, whilst the hidden half is for the 'tenants' to whom the programme has been extended. This rewards system encourages the 'tenants' to perform better and be more active.
Adding an element of gamification to surveys can be a simple yet powerful way to boost completion rates. Gamification satisfies fundamental human desires — our need to complete tasks. You can add subtle elements like a 'percentage complete' tracker and allow them to unlock different levels of rewards, keeping the best ones locked until they've completed the survey. Clients could also receive additional entries into a prize draw for providing additional information.
B2B Loyalty Examples
Mailchimp & Co Membership Programme
Email marketing and automation company Mailchimp has a co-membership programme for freelance marketing experts and agencies. Their simple system allows marketing professionals to partner with a company to manage their client's business through Mailchimp. In exchange, they receive exclusive perks and expertise.
Some of the benefits include:
- Helping members find more clients and earn rewards.
- Exclusive tips and training to gain expertise.
- Tools to manage multiple clients.
- Insider perks, including events and new features, before anyone else.
- Invitations for successful, long-standing members to partner with Mailchimp.
- Partners also receive access to 24/7 priority customer support and early access to upcoming new features.
Lenovo & Leap Programme
Computer manufacturer Lenovo's LEAP programme is an acronym for the 'Lenovo Expert Achievers Programme.' This channel loyalty programme is a dual system dubbed 'Learn & Earn' and 'Sell & Earn.'
How does this work?
- Partners earn points for selling Lenovo products and participating in education sessions.
- Members can exchange points for cash rewards.
- Points are accumulated on the Leap Account and redeemed for gift cards or a prepaid Mastercard.
IBM VIP Rewards
IBM's VIP rewards programme is probably the largest and most high-profile B2B loyalty programme.
IBM's programmes two main goals are to:
- Show appreciation by rewarding customers for the activities they already do.
- Encourage its members to learn more about IBM's services.
IBM's VIP programme uses gamification in a challenge-based format, meaning customers have to perform predefined actions to earn points. Customers can redeem points for gift cards or private sessions with IBM experts. The programme also features a leaderboard based on the number of points earned with challenges to foster healthy competition.
Difference between B2C and B2B loyalty programmes
Despite B2B and B2C loyalty programmes having the same goal of retaining customers and ensuring their loyalty, some differences exist. Therefore, you should build your B2B loyalty programme from the ground up to match the market sentiment. Some of the key differences include:
B2C loyalty programmes are mostly free to join, and members often receive instant enrollment rewards, whereas B2B loyalty programmes require clients to make a purchase or sign a contract. B2B reward systems are also more suited to the subscription-based model when they offer considerable benefits.
Loyalty programme type
Points collection and redemption systems (aka. earn & burn) are less effective for a B2B reward system as these systems are designed for frequent, low-value purchases. As B2B members' efforts are often more significant than B2C members, the value and frequency of their rewards should reflect their efforts.
For incentives, B2C reward systems utilise discounts, double points and early access to new products or features. Meanwhile, B2B loyalty programmes focus on memorable experiences or rewards that add value to the client's business. These may include business consultations, movie experiences, spa days, or prize draws. Gift cards are an ideal solution here as they can offer members a wide variety of choices and ensure there is something that matches their interests.
As B2B companies face a more prolonged and thorough decision-making process, they can't rely on FOMO (fear of missing out) offers to entice new members to join. Instead, B2B companies should emphasise the long-term benefits customers receive as members.
Personalisation for B2C companies commonly involves more relevant email communication and offers that vary for each segment. B2B companies usually have a smaller yet more demanding customer base. To meet customer satisfaction, B2B companies may need to show more flexibility in providing custom rewards tailored to the needs of each client.
B2C companies use loyalty programmes to incentivise customers and get their contact information simultaneously. In contrast, B2B companies will likely already have their client contact details. Instead, B2B companies can use incentivised surveys to gain valuable feedback from their customer base.
How do you build B2B customer loyalty?
Identify and encourage optimal customer behaviours
Focus not only on current, desirable behaviours but also on new ones you want to evoke. These behaviours should support your overall business goals. Such behaviours might include:
- Customers purchase a broader range of products from you.
- Creating more shelf space for those products.
- Referring new business to you or getting consumers to write product reviews.
Think about which behaviours are priorities, and structure your incentives accordingly. Be mindful that what works for one location or role may vary for another.
Design your programme to be simple
The best loyalty programs are intuitive for the sales team and the customer, but knowing which features will deliver results is challenging. Be prepared to test and iterate them. You'll also need to ensure the instructions on how the programme works and the website or app you design for your programme are user-friendly.
Lead with digital
B2B loyalty programs require the same digital-first mindset as B2C programmes to engage customers. Data visualisation helps customers optimise their business and allows both sides to grow more profitably. A data-led approach can also offer insight to help tailor your loyalty offerings to customer preferences, purchasing habits, and interests.
Create the best possible customer experience
The best programs create passionate fans and loyal brand advocates who are responsive to feedback and insights. These programmes create opportunities for customers to have memorable, positive experiences and demonstrate that you care deeply about your customers and meet their needs.
There's no better time for a loyalty programme
B2B companies are starting to wake up to the benefits of loyalty programmes that their B2C counterparts have reaped for years. There's never been a better time to invest in one to help retain your customers and create a loyal following.
To discover how we can help you with a B2B loyalty programme, get in touch or book a free demo of our B2B loyalty platform.