If there’s a golden rule in customer retention, it’s that everyone remembers a good experience. If a customer becomes part of something memorable, they’re more likely to return for another purchase, tell their friends about it, share their data, or engage with the brands in other ways. B2B companies aren’t exempt from this rule, but they still need to realize the full power of loyalty, as only 10% of B2B businesses focus primarily on retaining existing customers, according to Gartner. This untapped market presents a huge opportunity for those who plan to use state-of-the-art customer retention tools, like B2B loyalty programs. But what are they, exactly?
Key Takeaways — TL; DR
- B2B loyalty programs build trust in a high-profit but long-tail industry
- B2B loyalty programs differ from their B2C counterparts in many ways
- It’s recommended to use perks or tiers instead of points
- Common incentive types include experiential rewards and partner benefits
- We gathered four loyalty program examples for inspiration
Table of Contents
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What are B2B Loyalty Programs?
B2B loyalty programs (or B2B rewards programs) are customer retention solutions with specific features and loyalty logic designed to help businesses establish brand loyalty with the businesses they sell to. They differ greatly from their B2C counterparts in terms of both incentives and progression.
With the B2B eCommerce market alone predicted to reach $3 Trillion by 2027, it’s understandable that companies in this vertical aim to grow their market share and eCommerce business value. And one way to do so is to ensure existing clients or contacts stay loyal, satisfied, and engaged.
A consistently good member experience should never be overlooked in achieving repeat purchases. Combining this with more personalized experiences makes customers much more likely to repeat purchases with any brand. The technology that enables you to deliver the right offer at the right time to the right customer is crucial.
Characteristics & Challenges in the B2B Market
Another reason why it’s a smart move for B2B companies to introduce a loyalty program is that selling to clients yields more profit than selling to consumers. Therefore it’s imperative to retain your most valuable clients and ensure their loyalty. On the other hand, recruiting new customers in the B2B space is a more time-consuming process.
Other characteristics and challenges of the B2B market include:
- Fewer, but larger deals
- Demand is indirect and heavily fluctuates due to its dependency on consumer trends
- A longer, more formalized buying process
- A more concentrated focus on long-term relationships
- More complex buying decisions
Differences Between B2C Loyalty Programs and B2B Loyalty Programs
When designing your B2B loyalty program, be aware that traditional B2C rewards programs aren’t a good template to follow. Instead, build the system from the ground up with features that match the B2B market sentiment. Here’s a list of differences you should be aware of:
Membership
B2C loyalty programs are predominantly free to join, and members often receive instant rewards for enrolling. B2B loyalty programs, however, require clients to sign a contract or make a purchase. Also, B2B reward systems are more suited to the subscription-based model, but only if they offer substantial benefits in exchange.
Loyalty program type
Point collection and redemption (or in other words, earn & burn) is less effective for a B2B reward system, as this structure was designed with frequent, lower-value purchases in mind. Because deals in this market are often subscription or commitment-based, tiers and perks are a far better fit.
B2B loyalty programs are an effective way to reward clients for their ongoing loyalty. When structured properly, a good program will incentivize desired behaviors, but the rewards should always be aligned to the customers’ needs. Tier-based loyalty programs work well particularly when a business is rewarding repeat spend as well as increased buying volumes
Rewards
With regards to incentives, while B2C reward systems use discounts, double points campaigns, and early access, B2B loyalty programs often focus on rewards that provide business enhancement for the client, or special experiences. This can include business consultancy, movie experiences or even prize draws.
Offers
Because B2B companies face a longer, more thorough decision-making process, they can’t rely on FOMO, such as limited-time holiday offers, to entice people to join. Instead, they should emphasize the long-term benefits that customers receive as members.
Data Collection
B2C companies use loyalty programs as an incentive to simultaneously enroll customers and get their contact information. B2B companies usually already have client contact info, however, instead they can use incentivized surveys to gain valuable feedback from their customer base.
Personalization
For B2C companies, personalization generally involves more relevant email communication and offer management that varies for each segment. With a typically smaller and more valuable (and more demanding) customer base, B2B companies find themselves in a situation where some of their rewards, e.g. training sessions, need to be custom-tailored to each client.
Other KPIs
Next-gen loyalty programs are able to drive brand love through a number of KPIs, not just transactions. B2C companies use it to bring back old products, share product pages on social media, and engage with their app. B2B companies instead can incentivize brand advocacy for partners, educate them to increase upsell or demonstrate corporate responsibility.
B2B loyalty is even more important in the current business world as budgets are constrained, potentially resulting in reduced revenue. Having a loyalty program gives an organization a tool that not only provides valuable customer data but also creates more opportunities to keep in contact with clients and nurture the relationship between transactions. A B2B loyalty program can be the competitive differentiator that is not price-driven.
The Best B2B Loyalty Program Features to Help Your Company Stand Out
With the overarching framework and characteristics discussed, it’s time to dive deep into the specific features that make B2B loyalty programs what they really are.
Perks
If a loyalty program falls into the ‘perks program’ category, it means that it has no points system, no tiers, or anything else that incentivizes progression. Instead, members are privy to all benefits the moment they enroll. B2Bs can take the perks approach to build a VIP club for their clients. Companies can still engage members through surveys or prize draws, but if they cease being a partner or don’t make a purchase within a specified timeframe, they will lose membership access.
Tiers
Tiered progression in a loyalty program usually depends on spend or points. However, there’s a third, less often-used category: invitations. For B2B companies, this means that instead of letting customers progress on their own, they are directly placed into a tier depending on the deal’s volume. Naturally, higher tier levels offer better rewards, and clients have the option to downgrade or upgrade during the next order.
Co-operative rewards
Educating and training partners and suppliers can be an effective loyalty incentive. After all, it’s in your interest to help them perform better so you can advance the business relationship. Furthermore, if you help a smaller, less experienced client by sharing marketing, sales, or other knowledge, they’ll attribute their success partly to you.
Experiential rewards
Experiential rewards can be anything from member events to free movie passes for a client’s employees. These rewards don’t necessarily have to be expensive. They just need to be innovative enough to thrill your customers. And when your client’s employees are happy, your client is happy, too.
Partner rewards
Branded merchandise, gift packages, and other items are also recommended rewards for B2B loyalty programs. The reason is simple: client companies can receive these rewards as a ‘free bonus’ along with their order, then distribute the products among their staff to raise morale. It’s a win-win for all. And if you already have strong partnership relationships, these rewards can be acquired for a very low fee.
Referral program
Word-of-mouth marketing is just as important (if not more important) in B2B as it is in B2C. You should reward customers who share your name and recommend the loyalty program to others. And since membership requires direct business, one referred client potentially means additional revenue.
Gamified surveys
There are a number of ways to subtly add customer profiling to your reward system. For example, some rewards can remain hidden until the customer fills out a brief survey. Or clients can receive additional entries into a prize draw for providing additional information. Either way, gamified profiling is a valuable tool to collect feedback and gather additional data for your personalization strategy.
Coalition loyalty
Coalition loyalty programs and B2B loyalty programs aren’t the same, but there can be a connection between the two. Companies that operate a coalition loyalty program can divide it into two sections. The visible half is geared towards rewarding customers, while the hidden half is for the tenants. This way the rewards system encourages tenants to perform better and be more active.
4 Inspiring Loyalty Programs for B2B Loyalty Programs
1. IBM VIP Rewards
The International Business Machines Corporation’s loyalty program is probably the largest high-profile B2B loyalty program out there. The program serves two main goals: to show appreciation by rewarding customers for the activities they already do; and to encourage members to expand their knowledge about IBM’s services.
- As a form of gamification, IBM’s VIP program is challenge-based, meaning customers have to perform predefined actions to earn points
- Points can be redeemed for gift cards or private sessions with IBM experts
- The program also features a leaderboard based on the number of points earned with challenges to foster a bit of competition
Why it works:
- Badges and challenges are ideal to shape behavior and keep people close to the brand
- Private sessions with experts are the quintessential reward for B2B loyalty programs
- Leaderboards based on member’s performance is still a rarity in loyalty programs
2. Celebrity Rewards – Celebrity Cruises
A travel industry loyalty program, Celebrity Rewards is geared towards travel agencies in an effort to incentivize selling trips with Celebrity Cruises. The program is rather straightforward, utilizing direct cash incentives to motivate agencies.
- Every cruise sold translates into 500 points for the booking agent
- After hitting the 2,500-point milestone, points can be exchanged for cash using a Celebrity Rewards Mastercard
- The program works on a per-agent basis, meaning each participating booking agent has their own individual point balance
Why it works:
- In the travel B2B industry, earn & burn logic is a viable loyalty logic
- Rewarding individual agents instead of the agency itself encourages healthy competition
- For agencies and B2B partners, direct cash benefits have the biggest motivational factor
3. Leap Program – Lenovo
The Leap Program, which stands for ‘Lenovo Expert Achievers Program’, combines the premise of IBM’s and Celebrity Cruises’ loyalty programs. Leap features a dual system dubbed ‘Learn & Earn’ and ‘Sell & Earn’.
- Partners earn points for selling Lenovo products and participating in education sessions
- Points can be exchanged for cash rewards.
- Points are accumulated on the Leap Account and can be transferred to gift cards or a prepaid Mastercard
Why it works:
- B2B loyalty programs work well to motivate third-party staff to sell more products
- Rewarding participation in educational sessions ensures high performance for the staff
- Gift cards from various partners makes the reward experience more diverse
4. Mailchimp & Co Membership Program
Email marketing and newsletter provider Mailchimp has an insider program for freelance marketing experts and agencies. The system is simple: marketing professionals partner with a company to manage their client’s business through Mailchimp, and receive exclusive perks and expertise in exchange.
- Members are eligible for insider training, tools to manage multiple clients, and invitations to members-only events
- Successful, long-standing members are invited to partner with Mailchimp
- Partners also receive access to 24/7 priority customer support and early access to upcoming new features
Why it works:
- Rewards that make members better in their job is a win-win for everyone
- Mailchimp’s loyalty program helps to identify potential partners
- Priority customers support is a great B2B loyalty program reward
Get Ready to Expand Your Horizons
B2B loyalty programs are exceptional customer retention and partner engagement tools that can benefit your brand in multiple ways when done right. If you’re interested in the capabilities that Antavo offers as a pure-play loyalty provider, be sure to include us in your loyalty program RFP.
In the meantime, get inspired with our most popular ebook about budget planning for loyalty programs.
