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. In fact, 84% of B2B organizations now embrace the customer experience model. With the tides of competition rising, organizations will eventually turn towards B2B loyalty programs with best-in-class technologies to both maintain and improve their relationships with buyers, partners, and suppliers.
What is a B2B Loyalty Program?
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 $1.8 Trillion by 2023, it’s understandable that companies in this vertical aim to grow their market share. 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.
Program Lead of Strategic Client Programs at KPMG Australia
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
B2B loyalty is even more important in a COVID-affected 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.
President and Co-Founder of Loyalty & Co.
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:
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
Program Lead of Strategic Client Programs of KPMG Australia
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.
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.
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.
Learn more about how loyalty programs can help you with personalization and better targeting in our webinar with Exponea.
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.
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.
Adding a loyalty program for our organization allowed us to help partners grow their businesses. We’ve been creative in helping them with branded assets, marketing, and software services through redeeming points. This support has brought a closer relationship with our top customers.
Loyalty Program Manager at Telarus
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.
If a loyalty program falls into the ‘perks program’ category, it means that it has no points system, no tiers, nor anything else that incentivizes progression. Instead, members are privy to all benefits the moment they enroll. B2Bs can take the perks approach to building 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.
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.
For a more in-depth look at tiered programs, and why they’re so effective, watch this episode of Antavo’s loyalty-themed podcast, the Customer Loyalty Minutes.
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.
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.
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.
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.
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.
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.
5 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
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
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
4. Telarus Partner Loyalty Program
US-based telecommunications sales agency Telarus uses its B2B loyalty program to connect with commercial networks, cloud, and cybersecurity providers. The rewards program caters to partner retailers, motivating them to sell Telarus services.
- Rather than relying on an automated process, Telarus issues loyalty points directly on a per-case basis, depending on the partner and the deal size
- The Telarus rewards catalog, powered by Antavo, includes partner-centric benefits, such as marketing consultancy and sales training, special experiences, and gifts, which add a spark of extra value to their services
5. 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
Get Ready to Expand Your Horizons
B2B loyalty programs are exceptional customer retention and partner engagement tools that can benefit your brand 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 the processes and finer details involved in the design and launch of a loyalty program.