The business relationship with customers in B2B is more complex than that of the consumer relationship with a brand, and it has the ability to be much stronger and more powerful. While both B2B and B2C may use loyalty programmes, they both need to be crafted differently. Business customers expects a lot more from their suppliers. They expect a deeper understanding of their requirements, their challenges and a value-add relationship that helps them to solve those issues. Get all this right and you have a customer for life.
In every form of customer marketing, it costs more to attract new customers than it does to retain an existing one, and this is where loyalty programmes can prove their value. A customer loyalty programmes can improve not only the customer relationship but can also drive revenues, growth and market share.
In a Harvard Business Review article on building loyalty in business relationships, they noted that almost every customer requires a customised version of the product, quantity or price and for this reason it is impossible to use the same marketwide selling tactics in B2B as it is in B2C. In the consumer relationship you are only trying to deal with the pain points of an individual whereas in the business relationship you are trying to solve the challenges of the business and align those to the needs and desires of the individuals who are purchasing from you. To further complicate the relationship, you can have multiple stakeholders in the chain, from procurement to purchasing to end users.
To ensure that your marketing efforts aren't wasted, it is vital to really understand what your customers need from you in the first place.
We are going to look at some of the different customers states that you might encounter in the B2B relationship and how you can identify these within your customers segments:
This sounds ridiculous but an antagonistic buyer might be someone who is forced to purchase from you because of purchasing rules set by head office or procurement instead of a supplier they would choose.
The transactional buyer is reactive; they contact you once they know that they have a problem and have decided how to solve it. All they need from you is a proposal for how you can deliver the proposed solution.
This buyer is already pre-disposed to use your services, so will contact you as soon as they have a problem that they know you can solve. They know what you can offer them, and they trust you to help them scope and deliver a solution.
The latter two customers states are where you can start to really harness the power of loyalty. In the business buyer relationship it is even more important to harness personalisation to improve the customer experience. Loyal customers don't just appear overnight, they require time, effort, thought and attention
Here are some tips to think about before starting a loyalty programme:
All of these can be targeted using a loyalty programme and with good campaign software, like that provided by LoyaltyStream, you can target multiple behaviours and actions at once. The key to creating the metrics behind these campaigns is to understand what value you would attribute to each action or behaviour. What is it worth to your business? Once you know that, you can start to create the rules around your programme.
With loyalty programmes we all know that it is about the carrot. In fact, is anyone using the stick approach anymore? We hope not! Getting to the trusted advisor state with your clients requires you to really know their business and their challenges. Knowing what keeps them awake at night, and designing solutions for them, will cement the relationship and create a strategic partnership which will guarantee you future value.
Part of knowing what drives your customers is knowing what motivates them. Will they be motivated by content, education, business benefits, 3rd party products, own brand products. You could offer your VIPs early access to new products or services. All of these valuable rewards and many more can be made available via tiered incentives encouraging the customers to adopt the behaviours that you have identified as most valuable.
To increase your loyalty programme membership you are going to have to appeal to more than just one customer, so you need to build flexibility and personalisation and unique value into your programme early on. You need to encourage customers to adopt the behaviours and the actions you want and, in order to do that, you need to offer more valuable rewards and incentives which you know they will want.
A well-defined loyalty programme can impact customer engagement, customer satisfaction, customer acquisition and customer retention. A customer loyalty programme can provide vast amounts of data and you need to identify which data will help you to target the most valuable customers and the customers with the most potential. Brand loyalty appears when a user feels that your values are aligned with theirs and that they can clearly see how you can help them.
Customer loyalty programmes are widely recognised as playing a vital role in customer retention and new customer acquisition in B2C, but they are not as widely adopted in B2B. This could be because of access to data, the difficulty in personalising the programme, or the fact that some businesses just don't think loyalty will work in B2B. If anything, it can have even greater value in B2B than it can in B2C. A customer loyalty programme that has been designed correctly will create more value from your existing customers and will enable those customers to start recommending you to their peers.
We have seen outstanding results in some of our B2B loyalty programmes:
To deliver the desired level of results, you need a customer loyalty programme that is part of your culture. In B2B, the relationship between your customers and your staff is often very strong and an element of that needs to be retained. However, instead of your staff being 'order takers', a B2B loyalty programme should free them up to become more consultative. They can use the data to recommend new products, understand more about the customer and their challenges, and identify solutions.
Integrating an internal incentive into your customer loyalty programme, which will also motivate and incentivise your staff at the same time as your customers, will have the double benefit of motivating your staff to promote the programme, thus driving the right behaviours from your customers as well as enabling your staff to have the same experience as your customers.
You might have all the skills in house to design your own programme, but few businesses do. Loyalty is a skill in itself, and you will need to consider everything from the strategy, to the software, to how you are going to fulfil rewards. Within the loyalty industry there are numerous solution providers with whom you could partner, including consultancies, software providers and reward agencies. Stream Loyalty have created a network of consultants who can create, advise and monitor loyalty strategies for you. Depending on the needs of the programme, we can then deploy our LoyaltyStream software to take care of the technology part of the loyalty programme. The rewards can be fulfilled via the platform, or new providers can be integrated into the software to ensure that you have the flexibility you need.
Choosing the right loyalty consultant - some questions to ask:
Choosing the right loyalty software provider - some questions to ask:
Choosing the right reward provider - some questions to ask:
There are some truths to generating success with customer loyalty that can’t be ignored:
The key metrics to get right in your loyalty programme are:
We all talk about personalisation, but few businesses get it right. Personalisation plays a vital role in B2B loyalty programmes because of the range of customers you have interacting with the programme. It is crucial that the programme is designed to allow you to segment the audience, target different people with different campaigns, and provide different reward options to different members.
Stream’s co-founder, Melanie, became the first British woman to become accredited with the CLMP from The Loyalty Academy. Passionate about all things loyalty, Melanie cuts through the technical jargon and gets to the real business issue. Melanie loves to develop engaging digital solutions that appear simple whilst creating long lasting partnerships that add value to all.
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