B2B Loyalty Programs: Top 5 Successful Strategies for Businesses

What pops up in your mind when a customer loyalty program is mentioned? Points, cards, promos, exclusives, discounts or tiers?

In fact, it is quite true that there is no one-size-fits-all loyalty program. Within the space of B2B, where the cost of contracts is significantly bigger than that of B2C, the impact of retaining customers is even more pronounced. To make it more apparent and easy to understand, this article will start with what B2B exactly means and ends with how to build effective and successful B2B loyalty programs.

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What are B2B loyalty program ?

In simpler te­rms, B2B loyalty programs are custom solutions designed to ke­ep business clients hooke­d. They’re a bit differe­nt from the B2C version and offer unique­ perks and growth schemes. Did you know the­ B2B online market could hit a whopping $1.8 trillion by 2023? Firms in this area are­ keen on growing their slice­ of the market. The se­cret sauce? Building strong ties, happine­ss, and involvement with their curre­nt network. Happy clients buy again, it’s as simple as that. If a brand de­livers top-notch service and adds a sprinkle­ of personal touch, customers will kee­p coming back for more. And here’s whe­re technology steps in. It he­lps send the right deals to the­ right people, right when the­y need it. Talk about perfe­ct timing!

Why are loyalty programs important?

Kee­ping customers loyal is key for B2B companies. It builds ongoing re­lationships with clients, creating lots of future possibilitie­s. B2B clients are not like re­gular customers. They can bring more de­als. Some might be really spe­cial. Loyal customers also suggest your business to othe­rs. This leads to:

• More people­ knowing your brand

• Getting more clients

• More­ chances for extra selling

Giving custome­rs what they want is important. But, for a B2B, having a loyalty program can be a game change­r. They make customers look forward to doing more­ business with you.

Fundamental Differences Between B2B and B2C Loyalty Programs

B2B Loyalty Programs require more personalization

A significant difference between B2B and B2C companies significant difference between B2B and B2C companies is the size of their customer bases.

With a smaller customer base, B2B customer loyalty programs should personalize their participant experience and depend on the client’ needs for their business. Personalization is an act of tailoring your advertising activities, offers, and communication efforts to fit the needs of each B2B customer. It involves smarter planning and better understanding to deliver faster and expected experiences to customers.

Meanwhile, B2C loyalty programs are very effective in engaging, rewarding and retaining customers as well as growing a large customer base. B2C loyalty programs are made for their general customers - not specialized or personalized to each one.

B2B Loyalty Programs require additional communication

Businesses nowadays are a diverse and busy bunch; therefore, they prefer communication options that fit their on-the-go lifestyles. To catch up with this, B2B loyalty program creators need to build a quick and seamless communication way, by sending notices or updates through different medium channels to reach their customers. It is also considered as an approach to personalization.

VIP Rewards are essential in B2B companies

Rewarding your VIP customers with incentive programs can help you build stronger bonds with them through a shared and unique experience. Those programs show them how much you appreciate their business so that they can maintain their VIP status for continual access to your business.

Although there are existing glaring differences, both B2C and B2B business models are ready to go the extra mile to foster tighter relationships with their customers and win over their loyalty. You can refer to this blog to see differences between B2B and B2C clearly

5 effective B2B Loyalty Programs

Providing transaction-based discounts

This type of loyalty program echoes the B2C approach; however, it perfectly fits in the B2B environment. After completing an order, customers are offered an exclusive single or permanent discount that can be applied to the current or future purchase. Discounts don’t only help your customers, but also help your business. From increased sales to an improved reputation for your brand, discounts may be one necessary factor to boost your business success.

Below are key advantages of employing those discounts for your business:

• Attract new repeat customers: As people prefer buying everything on sale, discounts serve as a ploy to attract more people to your business. Just show them attractive discounts that your business offers to make sure they can not resist the temptation to buy from your company.

• Increase sales: Offering a lower price or a reduced price for multiple purchases will increase the likelihood that customers will want to purchase more to take advantage of the deal from the company.

• Lower business costs: Discounting items enables you to lower operational business costs and get better economic resources, production equipment, and inventory management.

• Boost reputation: A trade discount is an excellent way to improve customer’s perception of your business. From that, other potential businesses can maintain stable relationships with your company for continuing deals.

For example, a textile clothes distributor selling to apparel shops offers a 10% discount that applies to every order made within a specified timeframe.

Using tier incentives

Tiered systems can be understood as a way that allows engendering customer loyalty from the very start and prompt customers to purchase more. You can start with primary rewards to encourage customers to sign up as a member, and offer more valuable and attractive programs to the repeat clients as they increase their purchasing volumes.

Tiered incentive program strategies are endless, allowing you to customize your offerings based on your specific sales goals. A tiered program rewards top vendors more richly than low vendors, increasing overall motivation while matching compensation more closely with their contribution.

A furniture manufacturer provides rewards to its distributors in the form of earned points based on their sales performance. The more points they get, the more benefits, better pricing, and other incentives they are offered. By earning more points, buyers can level up from one tier to the next. The next tiers will be an amazing and valuable land for them.

Running referral programs

“Business owners tell me every day that the way they generate most new business is through referral marketing,” John Jantsch writes on ducttapemarketing, a website dedicated to helping small businesses with their marketing strategies. Referral programs work because they are reliable. When you are told about a business by your trusted friend, you tend to transfer the trust to that brand, even if you have never heard about it before.

Referral programs are commonly created in a way that you have more bonuses when you invite more friends. This makes participating in such programs a win-win for everyone. Referral programs bring in big bucks, not only that, they don’t just bring in new customers, they bring in good customers.

A group of researchers from The Harvard Business Review studied 10,000 accounts at a large German bank for a period of three years. The bank offered a simple referral program - they would reward anyone who referred a friend with €25. The finding shows that customers obtained through referral programs were both more loyal and valuable than other customers. In fact, on average, about 18% more likely than others to stay with the bank.

Moreover, they generate 16% more in profits (amounting to €40 each); thus, the bank earns a return of 60% from their initial €25. The study shows that referral programs have the power to take your business to the next level, working as an engine to bring new customers directly to your door.

A service provider offering different business tools and applications gives additional capacity for new referrals as well as an extended package to the newly-referred customers.

Arranging member events

B2B event arrangements are an offline channel where real-life experiences are promoted to facilitate in-person interactions that result in targeted business goals, such as customer retention, event revenue, business relationships, and brand awareness. In this regard, taking advantage of face-to-face communication, enterprises are able to build long-term and sustainable relationships with their partners and suppliers.

A well-prepared member event can benefit your company a lot, and bring back unexpected benefits:

• Enhance business relationship: Being invited to such member events, attendees might have the feeling that they get appreciation and special treatment, which results in confidence and strong bond with your business.

• Promote products and services: This is a unique and valuable opportunity to advertise, train and educate customers about your new products and services, increasing the possibility of generating leads and sales.

• Create comparative advantages: Organizing member events is an excellent way to make your company outstanding compared to other competitors, especially when your customers remember and perceive your brand in the longer term.

An HR supplier firm launches its conference as a means of educating, delighting, and coaching its customers. The event gives members access to keynotes, interactive presentations, professional coaching, and networking opportunities.

Stimulating co-marketing and support activities

Running co-marketing and support campaigns with your partners is an effective customer acquisition tactic. As the saying goes, ‘two heads are better than one,’ many companies find that the value, expertise, and resources of two companies can create something more significant than the sum of its parts.

Some co-marketing benefits can be listed here:

• Being more cost-effective by pooling resources together like budget or talents.

• Sharing customers of similar people who are qualified as potential ones.

• Delighting customers with outstanding services, free stuff, and co-branded products.

• Providing continuous support and training courses to each other.

• Creating and fostering a positive long-term relationship.

A wine company partners with major food and beverage distributors to provide wine on tap to the world’s top hotels and restaurants.

How to build a successful B2B loyalty program?

Establish Objectives

The initial phase entails outlining the objectives for your B2B loyalty programs, focusing on identifying the appropriate target audience within your customer categories.

Identify your objective

Effective B2B loyalty programs are characterized by strategic, data-driven decisions. Employ advanced customer retention solutions for online retailers to analyze client data comprehensively, ensuring optimal ROI.

Tailor Rewards for Each Category

Similar to B2C enterprises, recognizing the distinct preferences and business relationships of individual clients is crucial. By addressing the specific needs of each business partner, you can optimize various sales channels through the provision of personalized rewards.

Prioritize User-Friendly Design

Regardless of the rewards offered, streamline the registration process for corporate clients to avoid extensive and cumbersome steps. It’s essential to tailor the loyalty program to create a seamless experience, demonstrating genuine care for your company’s clients.

The simplicity of how members earn and redeem points is critical, and simplicity consistently proves to be the most effective approach in this context.

Evaluate Initial Outcomes for Continuous Enhancement

Lastly, ensure that your business stays current with evolving trends. As customer expectations rise, your B2B loyalty program should adapt with necessary updates. To enhance profitability, leverage AI-based tools to identify and prioritize areas with the potential for the highest revenue generation.

How can your B2B business benefit from loyalty programs?

Increase overall sales by promoting repeat business

Encouraging repeat business is crucial for boosting top-line sales, as returning customers typically spend more and are more willing to explore new products compared to new customers. B2B businesses aiming for sustained revenue growth should focus on cultivating a customer base that trusts and remains loyal to their brand.

Enhance Customer Lifetime Value (LTV)

The concept of Customer Lifetime Value is significant, as larger values generally translate to increased revenue. While both acquiring new customers and retaining existing ones involve costs, acquiring new customers is five times more expensive. Utilizing B2B loyalty programs provides a strategic avenue to elevate your customer lifetime value.

Broaden your influence on decision-makers and shape their buying and selling behaviors

Understanding the five-step consumer decision-making process enhances your ability to effectively market products or services. By comprehending how consumers make decisions, you can enhance your outreach to decision-makers and influence their purchasing and selling behaviors.

Minimize Costs in B2B Loyalty Programs {#minimize-costs-in-b2b-loyalty-programs)

​Shift your strategy from relying solely on discounts to adopting a balanced approach that combines financial incentives and outstanding client experiences. This adjustment helps cut down on the expected overall expenses associated with B2B loyalty programs.

Enhance your comprehension of client needs and preferences

The foundation of any successful business, whether catering directly to consumers or other businesses, lies in a profound understanding of client needs. Armed with this knowledge, you can persuasively convey to both existing and potential customers that engaging with your business aligns with their best interests.

B2B Loyalty program best practices

Bring memorable experiences {#bring-memorable-experiences)

Immerse your corporate clients in seamless and easily redeemable rewards, ensuring engaging and intuitive experiences.

Track loyalty program performance metrics

Monitor key performance indicators (KPIs) such as Customer Lifetime Value (CLV) and Repeat Purchase Rate (RPR) to gauge the effectiveness of your program and determine if enhancements are needed.

Be honest with your customers

Customize rewards based on individual client activities to boost business revenue, ensuring inclusivity and recognition for every client.

Avoid an overly promotional approach

Articulate genuine reasons, steering clear of an overly sales-oriented tone, to persuade clients to move forward with your company. Establish a presence that leaves a lasting positive impression on clients.

Provide accessible assistance and support

Ensure your business is easily reachable, offering accurate information to clients and maintaining a dedicated team ready to provide assistance whenever needed.

B2B Loyalty Program examples

IBM

IBM’s VIP Rewards program is a prime­ sample of a successful B2B loyalty initiative. It showcase­s how such programs can be exciting case studie­s. IBM captivates its customers with diverse­ challenges. These­ enable customers to gathe­r reward points. These challe­nges cover a broad spectrum, from be­ing part of IBM’s community through forum contributions to customer-driven tasks like e­xploring IBM technology.

IBM’s loyalty program has a lot of fans. Why? They can trade the­ir earned points for appealing ince­ntives. These include­ special meetings with IBM profe­ssionals.

Lenovo

With innovation at its he­art, Lenovo came up with the Le­novo Expert Achievers Program or LEAP. This unique­ loyalty drive has many facets. It includes a ‘Le­arn & Earn’ feature, where­ partners are given points for taking part in online­ learning. In addition, the ‘Earn & Sell’ aspe­ct keeps an eye­ on partners’ work. It gives points based on how much the­y sell. These points can be­ exchanged for cash, kee­ping partners motivated to earn more­. Partners teamed up with Le­novo saw a big change - they started se­lling seven times more­ to their customers after joining LEAP, e­specially when compared to the­ previous year’s sales.

SeikoVision

SeikoVision had trouble­ with its business rewards offer. The­y saw nine out of ten visitors leave­ quickly. Bree Smith had an idea. Se­parate business visitors. Show them why the­ rewards program is good, not just the products. Did it work? Yes! Fe­wer visitors left, leads gre­w by 943%, and they even won a big marke­ting award in 2016-17. The big lessons? Treat your busine­ss and regular visitors differently. Also, use­ things like easy-to-understand picture­s to make a big impact.

Before you go

No matter what the business model is, establishing and rewarding relationships with the customer base has an immense economic value since retaining existing clients offers higher ROI (Return on Investment) than acquiring new ones.

However, it is widely known that engaging with a collection of people is much more challenging than a single user. Therefore, building customer loyalty programs in B2B requires more in-detail personalization and a holistic view of your customers to deeply perceive their needs and expectations.

This helps you draw a clear picture of who your customers actually are, which motivations you are trying to generate, and what values you expect to get from them. Remember those key points, and your B2B loyalty should be on the right track!