B2B loyalty or reward programs are marketing solutions that help organizations establish stronger relationships with the businesses that buy from them. While commonplace in the B2C world, B2B organizations can capitalize on the benefits of loyalty programs as well.
The best-kept secret in a B2C marketers toolkit can be just as valuable for organizations that sell to other businesses.
Why Having a B2B Loyalty Program Matters
With the ample competition that exists in most B2B marketplaces, B2B companies may struggle to stand out from the competition and grow their market share. Regardless of whom they sell to, all businesses want to ensure their buyers stay engaged, satisfied, and keep coming back. Many B2B businesses don’t realize how easy and profitable a loyalty program can be. Moreover, customer loyalty is an important factor that all organizations must consider, and loyalty programs can be the B2B marketer’s secret weapon!
Unique Challenges in B2B Marketplaces
The B2B buying process has changed. Ten years ago, buyers would spend most of their time considering their options through the guidance of potential vendors. Today, B2B buyers have all the vendor information they need at their fingertips and can compare their options independently. Consequently, B2B sellers have less access and fewer opportunities to influence customer decisions.
With less person-to-person connection, it can be more difficult for a business to build trust with their leads and prospects. In the past, a B2B business may have relied more heavily on its sales staff, but with the rise of digital marketing, much of the human element is lost. It takes much more time, and persuasive web content, to build the trust a dedicated and knowledgeable sales professional can typically build with a single meeting.
Research by Gartner found that when B2B buyers are considering a purchase, they spend only 17% of that time meeting with potential suppliers. This means that 83%1 of their time is spent doing their own independent research. When you factor in comparing multiple suppliers, the total time spent with each sales rep may only be 5% or 6%1.
A lack of diversity in many B2B marketplaces means it is harder to stand out from the competition. Competition is higher than ever and with less time to build relationships with prospects, added incentives can really help. Not all organizations want to compete on price. Some will choose to add value in other ways to ensure their profits stay high while attracting the business they desire. A B2B loyalty program can be an incredibly effective competitive differentiator that is not price-driven.
Other characteristics and challenges of the B2B market include:
- There are fewer deals, but typically at higher price points.
- Higher prices lead to careful consideration and longer, more formal buying cycles.
- Indirect demand for B2B products and services change based on consumer trends.
- There is a greater focus on building long-term relationships.
Building B2B loyalty is even more important right now as many budgets are reduced, and marketing dollars are watched more closely. A loyalty program gives B2B businesses more opportunities to connect with clients and nurture the relationship.
B2B Loyalty Programs by the Numbers
These shocking customer loyalty statistics prove the need for enhancing B2B loyalty.
- The overall profitability of a business may rise by 25-125% when the turnover rate is cut down by 5%.
- 43% of customers are willing to spend more when they feel loyal to a company.
- 89% of customers say that they will be loyal to a brand if it shares their values.
- When you don’t engage your clients, 54% will consider leaving you.
- The chances of selling to a new customer are between 5% and 20%, but that rises to 60% or 70% for existing customers.
- 75% of consumers prefer a brand that has a loyalty program.
- 93% of your customers will likely buy again if their previous experience was good.
How B2B and B2C Customers Differ
Business buyers have different needs than a typical household consumer. It is both more challenging and it takes longer to convert a B2B prospect into a client. Relationships in the B2B market are typically longer-term and for that reason are subject to greater consideration.
Typically, when considering a purchase of a consumer good, we make decisions quickly. However, in a business setting, the stakes are higher — showcasing proof and the highest value are essential to secure a deal. The decision-making process when considering a laundry detergent is drastically different from choosing a reputable supplier for your business!
How to Make Your B2B Loyalty Program Successful
Incentives should be awarded based on the transaction amount.
When clients spend more, they should get greater rewards. By using a tiered system, a B2B reward program can help secure larger deals and longer contracts. Loyal clients typically spend more. So, when you add purchase incentives, you can push cart sales even higher.
Reward longer-term clients for their continued loyalty.
Continuing to do business with you for many years is an excellent reason to thank a client. That client has other options, so showing them how much you value them is key. Winning a client’s attention and their first purchase will always be more difficult than keeping them satisfied. Reward programs are one easy way to boost client satisfaction long term!
Use rewards to secure deals.
Organizations can use a B2B reward program to help win big accounts and even keep accounts from leaving to go to a competitor! When all other factors are equal, a reward program can be the competitive edge a business needs to protect its market share.
Offer referral incentives to gain new business.
Offering rewards for client referrals is an easy way to get something back for your reward program investment. It’s natural for consumers to refer friends and family to products and services they love. Customer incentives are the icing on the cake and help turn loyal B2B customers into valuable advocates!
Offer rewards that are clearly understood and valued.
Loyalty currencies can vary drastically, and some offers might not make sense to your buyers. When implementing a customer reward program, choose one that offers rewards that your clients know and value. Rewards should delight your consumers and make them remember you and become advocates for your business.
Incentivize more profitable business practices.
Many B2B businesses will save a significant amount of money when their clients shift to paperless invoicing and eft bill payments or pay their invoices early or on time! With a B2B loyalty program, organizations can offer incentives to their clients that will help them save more money in the long term!
Keep clients engaged with your business.
An engaged client is one that looks forward to opening your emails and hearing about your promotions! Client engagement is a constant challenge for many B2B organizations. With a loyalty program, clients look forward to learning what rewards and incentives are available to them from day-to-day.
Keep employees engaged.
Keeping employees connected and engaged is a struggle for many businesses. Having an employee reward program can help organizations attract and retain employees, ensure appropriate safety measures and performance standards are met. An incentive program for employees is also an excellent way to improve team culture, motivate sales teams to hit targets, and encourage employees to complete training programs.
B2B Client Retention is Critically Important
Globalization has created mega corporations that span the globe. With increasing competition and larger geographic marketplaces, client retention is a common struggle for many businesses. In the B2B market, retention is even more critical to success.
With longer sales cycles, it typically takes longer to secure a B2B deal. This means that most organizations’ sales efforts and marketing dollars go towards attracting new clients. It stands to reason that keeping that client happy for many years will yield the best return on marketing investment.
The stakes are higher in a B2B marketplace. Losing a deal may seriously hurt your income projections. Losing a couple of key clients can drastically slash your annual revenue. If you lose an important client, it can negatively affect team morale. It may also take years to get another client up to that same level of profitability.
Why Maximizing Customer Lifetime Value (CLV) Matters
Customer lifetime value is the total amount of money a customer spends during the time they buy from you. Organizations that can effectively extend the lifetime of their clients are more profitable. There are several reasons for this.
It costs five times more to attract and convert a new client than it does to keep an existing one. Attracting the attention of a potential new buyer and gaining their awareness is very expensive. Typically, most marketing dollars go towards attracting the attention of new clients. Yet, even after attracting a buyer’s attention, you still have to convince them that your offer is the right fit.
However, reward programs help you keep clients longer. Plus, loyal customers spend more during each transaction which also leads to increased profit margins. A 20-year client relationship is going to be much more profitable than 20 one-off purchases! For these reasons, it really makes sense to maximize your CLV.
Some B2B businesses have won big accounts or kept accounts from leaving to go to a competitor thanks to the extra value they provide with their rewards program!
What is the B2B Loyalty Program Business Model with AIR MILES INCENTIVES?
At AIR MILES INCENTIVES, we make it possible for small to medium-sized businesses to take part in Canada’s most recognized coalition reward program. We have a wide variety of B2B clients that gain meaningful results from our loyalty-building strategies.
Our B2B AIR MILES Partners have seen these incredible results:
Client Rewards Program
- AIR MILES® Collectors increase their purchases by 66%.
- 30% revenue increase from the growth of customer base and average revenue per user.
- 3,250 clients made the change to electronic invoicing resulting in direct cost savings.
- Total revenue from AIR MILES customers increased by 86%.
- Return on investment of 908%.
Employee Rewards Program
- AIR MILES Program supported the recruitment of 30 additional team members Reduced employee turnover, and 97% retention rate.
- Annual savings in recruitment, training, and operational costs totaling $2.5MM.
- $130K in cost savings resulting from a 22.6% decrease in lost-time injuries.
B2B Loyalty Program Examples.
The AIR MILES® Reward Program has been the top coalition reward program in Canada for over 25 years, and it gets results.
Studies show that 75% of consumers will choose a business that offers Miles over one that doesn’t and 2/3 of consumers will change how they shop and how much they spend to maximize Miles.
Here are some examples of AIR MILES offers that encourage B2B customer loyalty:
- Increase transaction amounts – Spend $150 and get 50 Bonus Miles. Spend $250 and get 200 Bonus Miles.
- Reactivate dormant clients – We miss you! Place a new order by Feb 10 and get 3x Bonus Miles.
- Protect profit margins on accounts receivables – Pay within 30 days and get 25 Bonus Miles.
- Incentivize long-term contacts or renewals – Renew today and get 1,000 Bonus Miles.
- Offer Miles for referrals to grow your client base – Refer a new client and get 100 Bonus Miles.
- Add urgency to prospects – Book a meeting before March 31 and get 50 Bonus Miles.
If these examples have gained your interest, request a free no-obligation assessment today. Our team of loyalty experts would be happy to help you design your own results-focused B2B reward program.
How To Start A B2B Loyalty Program
Getting Started With the AIR MILES Reward Program is Easy!
Together, we discuss your goals and challenges and build a customized program that will impact your prospective clients and keep them coming back for more Miles!
1. We work with you to launch your program and train your staff so they know the importance of the program, how to issue Miles, and how to answer the questions your clients may have!
2. We set you up with all the tools you need to confidently promote and manage your program successfully. From our proprietary issuance platform, window and vehicle decals, to swag and even help with your digital creative — we’ve got you covered!
3. Your account manager and client services team is only a call or an email away. We’ve got your back with all the questions you and your staff might have.
It’s time to start rewarding your business clients now and start gaining the benefits!
To learn more, check out “How to Become an AIR MILES Partner.”