FAQs

It is difficult to identify a single individual or company as the inventor of loyalty programmes, as the concept of rewarding customers for their loyalty has been around for centuries. However, some credit Sperry & Hutchinson, a US trading stamp company, with developing the first modern loyalty program in the late 1800s. The company distributed stamps to customers which they could then redeem for various products, including household goods and appliances.

Other early loyalty programs included frequent flyer programs, which were first introduced by American Airlines in 1981, and hotel loyalty programs, which were first introduced by Hilton Hotels in the late 1980s. These programs have since evolved and are now common in many industries. Today, loyalty programs are offered by a wide range of businesses, including retailers, airlines, hotels, credit card companies, and more.

Loyalty is important in a business because it can lead to increased sales and revenue. Loyal customers are more likely to return to a business and make repeat purchases, which can help to drive sales and revenue. Loyal customers are also more likely to recommend a business to others, which can help to attract new customers and increase revenue.

Loyal customers are also less likely to switch to a competitor, which can save a business the cost of acquiring new customers. This can help to reduce marketing and advertising costs and increase profitability.

In addition, loyal customers are often more forgiving of mistakes or issues that may arise, which can help to maintain a positive reputation and reduce the negative impact of any problems.

Overall, loyalty is important in a business because it can lead to long-term success and growth.

Several factors can contribute to customer loyalty:

1. Quality products or services: Customers are more likely to be loyal if they are satisfied with the products or services they receive.
2. Good customer service: Customers appreciate friendly, helpful, and efficient service and are more likely to be loyal to companies that provide it.
3. Consistency: Customers value consistency and appreciate it when a company consistently provides high-quality products or services.
4. Fair prices: Customers are more likely to be loyal if they feel that they are getting good value for their money.
5. Special offers and loyalty rewards: Customers appreciate special offers and loyalty rewards, such as discounts or points programmes, and are more likely to be loyal to companies that provide them.
6. Personalization: Customised experiences and personalised interactions can help build loyalty.
7. Strong brand: A strong brand can also contribute to customer loyalty. Customers are more likely to be loyal to companies that have a good reputation and whom they trust.

Customer loyalty can be defined as generating advocacy, retention and value with your customers. Loyal customers are vocal advocates of your brand, they know the value your business provides and they actively choose to stay with you, despite potentially cheaper competitors. With more complex customer relationships in B2B, it can take longer to drive the right behaviour changes to generate customer loyalty than it can in B2C.

Yes, it is possible to generate customer loyalty. There are several strategies that businesses can use to try to build loyalty among their customers:

1. Offer high-quality products or services: Customers are more likely to be loyal if they are satisfied with the products or services they receive.
2. Provide excellent customer service: Customers appreciate friendly, helpful, and efficient service and are more likely to be loyal to companies that provide it.
3. Be consistent: Customers value consistency and appreciate it when a company consistently provides high-quality products or services.
4. Offer fair prices: Customers are more likely to be loyal if they feel that they are getting good value for their money.
5. Provide special offers and loyalty rewards: Customers appreciate special offers and loyalty rewards, such as discounts or points programmes, and are more likely to be loyal to companies that provide them.
6. Personalise the customer experience: Customised experiences and personalised interactions can help build loyalty.
7. Have a strong brand: A strong brand can also contribute to customer loyalty. Customers are more likely to be loyal to companies that have a good reputation and that they trust.

By implementing these strategies, businesses can work to build customer loyalty and foster long-term relationships with their customers.

Loyalty programmes can be effective in building customer loyalty if they are well-designed and properly executed. In general, loyalty programmes work by rewarding customers for their purchases or other types of engagement with a brand. These rewards can come in the form of points, discounts, free items, or other perks that are valuable to the customer. By consistently rewarding customers for their loyalty, businesses can build a sense of community and encourage customers to continue doing business with them.

However, loyalty programmes can also be ineffective if they are not designed and managed well. For example, a loyalty programme may fail to provide sufficient value to customers, or it may be too complicated or confusing for customers to understand. In these cases, the loyalty programme may not be able to effectively build customer loyalty.

Overall, loyalty programmes can be an effective way to build customer loyalty if they are well-designed and properly executed, but they are only one part of a larger customer loyalty strategy. Businesses should also focus on providing excellent products or services, excellent customer service, and a positive customer experience, to build long-term customer loyalty.

Before starting your loyalty programme it makes sense to research what else there is in the market, and what your customers are interacting with, either in their personal consumer lives or in their businesses. The first step is to look at what your competitors are doing, but be careful not to just make a carbon copy of someone else’s loyalty offering. Your solution needs to be personalised to your brand, your customers and your goals. Loyalty is only going to work if it is adopted throughout the business, so it is crucial that you bring different teams into the research period to ensure that you know what your customers want and need and what your team need to help the programme launch. There are different partners that you could work with to help you find the right strategy and the right technology or just provide a consultation to set you on the right track.

There are several types of customer loyalty:

1. Behavioural loyalty: This refers to when a customer consistently chooses to do business with a particular company, regardless of the presence of competitors or alternative options.
2. Attitudinal loyalty: This refers to when a customer has a positive attitude towards a company and is likely to recommend it to others.
3. Rational loyalty: This refers to when a customer continues to do business with a company because it is the most logical or convenient choice.
4. Emotional loyalty: This refers to when a customer has a strong emotional connection to a company and is highly unlikely to switch to a competitor.
5. Value-based loyalty: This refers to when a customer is loyal to a company because they feel they are getting good value for their money.
6. Habit-based loyalty: This refers to when a customer is loyal to a company out of habit or convenience, rather than any specific emotional or rational connection.

In our opinion, there are 3 types of customer loyalty in B2B, with the fourth being a mix of all 3. Trying to build your customers’ loyalty across all three elements should be your aim. The 3 loyalty types are:

Transactional loyalty – a transactionally loyal customer will keep spending with you and will grow their spend but probably won’t interact with the brand in many other ways.

Relationship loyalty - this is where a customer continues to purchase with you because of the relationship. The concern here is whether the customer’s loyalty is within an individual in your business, a team or the brand itself.

Emotional loyalty – a customer can be emotionally tied to your brand and never transact with you. They align their values with the values of your brand, they refer you to their peers, share your social content and generally act as an ambassador.

The ideal is to get a mix of all of these, but the most important thing to start with is to understand where each customer sits within the mix.

The main characteristics of B2B loyalty are as follows:

1. Relationship-based: B2B loyalty is often built on long-term relationships between businesses. Customers may be more likely to continue doing business with a company that they have a strong relationship with and whom they trust.
2. Value-driven: B2B customers are often more concerned with the value that a company provides, rather than the price of its products or services. Companies that can demonstrate the value they provide to their customers are more likely to build loyal relationships.
3. Customisation: Many B2B customers require customised products or services to meet their specific needs. Companies that can offer customisation are more likely to build loyal relationships with their customers.
4. Collaborative: B2B loyalty is often built through a collaborative process in which both the customer and the company work together to achieve their shared goals.
5. Data-driven: B2B loyalty programmes often rely on data to understand customer behaviour and preferences, and to tailor their loyalty efforts accordingly.
6. Multi-channel: B2B loyalty programmes may use a variety of channels, such as email, social media, and events, to communicate with - and engage - their customers.

Loyalty programmes in B2B often follow trends from B2C, rather than the other way around. With our experience of working in B2B, the relationship between the business and the customer is much more complex. There are normally more stakeholders and each contact can have different responsibilities, objectives, needs and experience. For loyalty programmes to truly make a difference, you need to be able to identify who you are communicating with, what their needs are and what behaviours you want to change. Referrals can be much harder to get right in B2B than they can in B2C, depending on the business sector. To truly make loyalty succeed in B2B you need to get all of your customer-facing staff bought into your programme and get them invested in the outcomes. Making them part of the programme will yield significant benefits.

A customer loyalty strategy is a plan that a company develops to encourage customers to continue doing business with them. The goal of a customer loyalty strategy is to build long-term relationships with customers and increase the likelihood that they will make repeat purchases. A customer loyalty strategy may include a loyalty programme, which rewards customers for their loyalty, as well as other tactics such as personalised communication, excellent customer service, and a focus on meeting the needs of the customer.

Some common elements of a customer loyalty strategy include:

1. Identifying target customers: A customer loyalty strategy should focus on attracting and retaining the most valuable customers.
2. Setting loyalty goals: A company should have clear goals in mind for its loyalty programme, such as increasing customer retention or driving more sales.
3. Developing a loyalty programme: A loyalty programme is a key component of a customer loyalty strategy. It should be designed to reward customers for their loyalty in a way that is meaningful to them.
4. Personalisation: Customers appreciate being treated as individuals, rather than just a number. A customer loyalty strategy should include personalised communication and tailored experiences.
5. Excellent customer service: Providing excellent customer service is essential for building customer loyalty. This includes responding promptly to customer inquiries and addressing any problems or concerns promptly.
6. Continuous improvement: A customer loyalty strategy should be a work in progress, with the company continually looking for ways to improve the customer experience and increase loyalty.

Developing a loyalty program involves several steps:

1. Define the programme's goals and objectives: Consider what you want to achieve with the programme, such as increasing customer retention, driving sales, or collecting data on customer behaviour.
2. Identify your target audience: Understand the demographics, preferences, and behaviours of the customers you want to target with the programme.
3. Choose a programme structure: Decide how you will reward customers, whether it's through points, rewards, or a tiered system.
4. Decide on the rewards: Identify the rewards that will be offered to customers, such as discounts, free products, or exclusive access to events.
5. Promote the programme: Advertise the programme to your target audience, making sure they understand how it works and the benefits of participating.
6. Measure and evaluate the programme: Track the programme's performance, analyse the data and make adjustments as necessary.
7. Continuously communicate with the customers: Keep customers engaged and informed about the programme and its benefits, and gather feedback to improve the programme.
8. Be consistent: Keep the programme running continuously, and be consistent with the rewards and rules.

Loyalty programmes can increase sales by rewarding customers for their repeat business. This can create a sense of loyalty among customers and encourage them to continue trading with the business. Additionally, loyalty programs can help to generate positive word-of-mouth advertising, as satisfied customers may tell their friends and family about the programme and the rewards that they have received. Loyalty programmes can also provide businesses with valuable data and insights about their customers, which can be used to create more personalized marketing campaigns and improve the overall customer experience

A customer loyalty index is a measure of the likelihood that a customer will continue to make purchases from a company in the future. It is typically calculated by surveying a sample of customers and asking them how likely they are to recommend the company to a friend or continue to make purchases from the company in the future. The resulting score is then used to gauge the overall loyalty of the customer base. Companies may use customer loyalty indices to identify areas for improvement in their products or services and to develop strategies to increase customer loyalty.

There are several strategies that businesses can use to engage B2B customers using loyalty programmes:

1. Offer rewards that are valuable to B2B customers: This could include discounts on future purchases, priority access to new products or services, or free training or consulting services.
2. Make it easy for B2B customers to participate in the loyalty programme: This could involve providing an online portal for tracking rewards, or integrating the loyalty programme into the customer's existing account or billing system.
3. Communicate regularly with B2B customers about the loyalty programme: Keep them informed about their progress in the programme, new rewards that are available, and any changes or updates to the programme.
4. Provide personalised experiences for B2B customers: Use the data collected through the loyalty programme to create personalized experiences for B2B customers, such as tailored product or service recommendations or customized communication.
5. Foster a sense of community among B2B customers: Use the loyalty programme as a way to bring B2B customers together and create a sense of community. This could involve hosting events or webinars, or creating online forums or discussion groups.

Before implementing a loyalty programme you need to ensure you have defined the programme, its objectives and what the ROI is. We prefer to think of any programme as a strategy first. The strategy should be at the heart of the business and be able to be understood and communicated by everyone in the business. It isn't just a bunch of rewards that customers can earn, it goes much deeper than that. Work out what behaviours you want from your customers, what you are willing to reward them with and then work out how you are going to achieve it.

One great example of loyalty marketing is O2’s Priority programme. O2’s programme is largely focussed on offers and experiences, included discounted restaurant and entertainment offerings, access to tickets before they have even been released and priority entry to O2 venues.

The programme has over 2.5 million users and is the only UK loyalty programme app with a 5* rating in the Apple App Store.

Loyalty marketing is important as it allows you to gather data on your customers which you can use to analyse and deliver a more personalised experience. You can also use loyalty marketing to retain your customers, it is a well-known fact that it is 5 times cheaper to retain a customer than to acquire a new one. Loyalty marketing is also important as it gives you an edge in your competitors. Additionally, loyalty marketing also builds brand credibility.

Consumer loyalty is the act of consumers who continue to buy the same brands of goods rather than competing brands due to their relationship with the brand. This can be achieved through developing a deep understanding of your customers buying behaviours and their interests. Once you understand what makes your customers tick you will be able to develop a loyalty strategy fit your business.

Customer Loyalty strategies can come in various shapes and forms, three key strategies that Stream Loyalty Use are the Keep, Grow and Win campaigns.

Keep campaigns target your ‘best’ customers ensure that your key customers are being looked after and that they are referring and recommending you wherever possible.

Grow campaigns target those accounts or clients that you want to grow by encouraging them to increase their spend.

Win campaigns encourage new customers to register with you gamifying the process so that customers earn more rewards the more they do with you.