FAQs

The Most Frequently Asked Questions on Google

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.

The Importance of Loyalty

Loyalty programmes tie into a customers emotional reasoning. By creating a programme that makes a customer feel valued, that they get something for “free” or even tailored to them makes them make more emotional purchases rather than using logic e.g. searching around for the cheapest item available. Loyalty programmes are usually low cost but high yield. Acquiring a new customer can be up to 25% more expensive that retaining an existing customer. Having a stable loyal customer base is more profitable long term.

Any good loyalty programme should be a win for the customer as well as the business. A customer might switch their behaviours for a short time to get a specific reward but if the programme doesn't fulfill their needs long term, then the behaviour change won't stick. Ultimately your businesses service or product has to match the customers needs and then the experience they have with the brand has to match their values. If you can create an experience that the customer is happy to refer and talk about you have created something they feel part of. They have an emotional connection, and it is that emotional connection that a loyalty programme is designed to create.

We are firm believers that loyalty starts within, and you cant preach loyalty to your customers, if you aren't practicing it with your staff. To that end we would always recommend using your loyalty platform to run a programme designed for your staff. Using a similar programme on the same platform means your staff will be better able to communicate to your customers and are more likely to live and breathe your brand.

Loyalty Programmes

We believe there are 9 types of loyalty programme models:

  • Simple points system
  • Tiered loyalty programme
  • Milestones
  • Charge an upfront fee
  • Partnership based
  • Community engagement
  • Subscription
  • Gamification
  • No programme at all

There are many different types of loyalty programmes and although there are a few that are strictly one type only, the most notable programmes often utilise a number of the above types in order to reach the maximum audience and drive the most engagement.

Loyalty programmes are run by businesses in order to incentivise customers to do repeat business with their brand as well as motivating customers to switch from their competitors to them. Brands do this by offering rewards, discounts and personalised marketing through their loyalty programmes. A brand offering a loyalty programme that distinguishes them from their competitors can make them a more attractive company for customers to do business with. If a customer feels that they get something extra with every transaction, they are more likely to keep repeating the action in order to get a reward/ benefit. Remember, the purpose of these programmes is to drive revenue, engagement, loyalty and brand awareness. In layman's terms: a brand wants a customer to buy solely with them so they will reward the customer for continuing to do business with the brand and they will also reward the customer for switching from the brands competitor to them. Simple really. Loyalty programmes can span for years or be short in duration. An example of a successful short campaign would be McDonald’s monopoly game. When they published their sales uplift for the promotion period in 2019, they saw their sales increased by 3.3%. A key point to note as well is that loyalty programmes should provide a clear return on investment. Although there will be a large up front cost to develop the programme, you will see the benefit with the sales uplift.

Points based programmes are still the most well know model as they are so deeply ingrained in our idea of loyalty programmes. Points are also soft benefits – a point can be worth a determined amount of actual monetary currency so from a business cash flow perspective, there is minimal financial risk. Base rate points programmes enable a brand to run promotions to encourage sales, engagement, data collection and so forth. E.g. if you wanted to ensure that your longest serving customers details were correct, you could run a promotion that meant you rewarded points for everyone that checks their profile and updates their contact preferences. This would enable you to market to those customers more effectively, therefore tailoring the programme and increasing sales. The Starbucks loyalty programme is one of the most successful programme to date, as it has almost 20 million users. In fact, because of the amount of “cash” that sits on their customers accounts, 1.5 billion dollars, they have more available money than some banks. They also anticipate that 10% of that money will be forgotten about by customers that may no longer wish to use their account.

Loyalty Agencies

A loyalty agency, like any other agency, is a business whose mission is to assist companies with loyalty. Loyalty is a fast growing industry and there are different types of agencies, from small providers focussed on one aspect of loyalty right up to larger agencies who can offer everything from consultancy to enterprise platforms to analysis. Loyalty agencies will typically have a team of account managers, project managers, developers (although this could be outsourced), business analysts, graphic designers and customer service staff. Choosing the right agency to work with depends on your requirements and we would always recommend speaking to a few different agencies to make sure you are working with the right one.

A loyalty program is designed to change customer behaviours. A well-designed programme should drive customer growth, motivate customer retention and inspire customer acquisition. Personalising the programme to the audience will build their emotional connection with the business. Traditionally, loyalty programmes include a mixture of hard benefits (rewards and discounts) and soft benefits (service benefits, VIP rewards) that reward the customer for their purchases. The program will usually be closely integrated with the brand identity and culture as well so that the program is consistent with the wider customer experience.

Customer loyalty is the result of multiple positive experiences with the brand that build up trust over time. It’s about building a relationship with the customer so that they are connected, valued and understood by the business.

Loyalty continues to bring positive outcomes for brands and the impact on advocacy, retention, and spend remains strong. The 2020 study by Bond found that 72% of customers are more likely to recommend a brand with a good loyalty programme, 78% of customers are more likely to keep doing business with a brand with a good loyalty programme and 64% of customers modify their spend to maximise point earnings.

The vast majority of British people are members of loyalty programmes and are fans of them too:

  • 75% are current members of programmes
  • 73% think loyalty programmes are a great way for brands and businesses to reward customers
  • 52% think all brands should offer a loyalty programme

We believe there are 9 types of loyalty programme models:

  • Simple points system
  • Tiered loyalty programme
  • Milestones
  • Charge an upfront fee
  • Partnership based
  • Community engagement
  • Subscription
  • Gamification
  • No programme at all

There are many different types of loyalty programmes and although there are a few that are strictly one type only, the most notable programmes often utilise a number of the above types in order to reach the maximum audience and drive the most engagement.

You don't need to use a loyalty agency to run a loyalty programme, however an agency should be able to bring experience of different markets, campaigns and audiences that will help you shape the right solution for your business. An agency should also have to hand all of the skills required to implement a well designed programme from graphic designers to developers to business analysts to customer service staff. Having said this you could easily work with an agency on only part of your programme. Any agency worth working with should be able to prove its ROI.

Why is Loyalty Important in B2B?

Absolutely, loyalty programmes can have a huge impact in B2B. remember that your B2B customer is a consumer when they leave the office so they are already used to transacting with companies that offer them loyalty. The complexities are greater in the audience relationship and personalisation requirements but the rewards can be huge. In a recent programme, we delivered a 23% increase in revenues, 80% increase in referrals and 43% increase in brand stretch. Imagine what that could do to your business trajectory.

The 4 types of programme models are:

  • Points based model
  • Subscription model
  • Paid for model
  • Advocacy model

Within these 4 models though you can create multiple combinations of programmes. Each model can be layered into one programme. Different models can be provided to different members and/or campaigns. Dont let your software or technology limit you to only one programme model. Start by thinking about your audience and what they might want and then devise a programme to suit their needs.

Creating a loyalty programme in a B2B business is more complex than in B2C as the relationship you have with your customer is often much more personal. The audience needs to be considered from more angles as the relationship is likely to be one to many rather than one to one which is what we see more regularly in B2C. In a B2B loyalty programme you need to be even more focussed and personalised on the needs of each member. If you only have one person from each business as a loyalty programme member, should that be the person who pays the invoices, the person who decided which suppliers they use or the person who completes the transactions. The rewards each person will be motivated by will be different as well so you need to really understand the audience and personalise every aspect of the programme to engage them. The mechanics by which you reward each member can be the same but each might have different outcomes.

Loyalty Marketing Strategies

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.

B2B Customer Loyalty FAQ's?

The B2B customer is still a consumer in their personal life so a lot of the same engagement techniques and approaches can be used. There is often a strong relationship in place between customers and account managers and keeping the personal experience within a digital environment is key to continuous engagement. Because of this we encourage companies to consider running an employee loyalty programme alongside the one for their customers. This has the added benefit that employees understand how the programme works, can communicate the benefits to customers and are part of the customer loyalty conversation from the start.

We really enjoy the challenges of working in the B2B space. Businesses and their relationships with customers are often much more complex. There is usually a multi-tier account relationship, and sometimes the budget holder may not be the person interacting with the business day to day. There are often issues with data and getting a single view of the customer especially where companies have grown through acquisition. Often we find we are taking our clients on a digital transformation journey rather than just a customer loyalty journey.

Creating a loyalty programme in a B2B business is more complex than in B2C as the relationship you have with your customer is often much more personal. The audience needs to be considered from more angles as the relationship is likely to be one to many rather than one to one which is what we see more regularly in B2C. In a B2B loyalty programme you need to be even more focussed and personalised on the needs of each member. If you only have one person from each business as a loyalty programme member, should that be the person who pays the invoices, the person who decided which suppliers they use or the person who completes the transactions. The rewards each person will be motivated by will be different as well so you need to really understand the audience and personalise every aspect of the programme to engage them. The mechanics by which you reward each member can be the same but each might have different outcomes.

Absolutely, loyalty programmes can have a huge impact in B2B. remember that your B2B customer is a consumer when they leave the office so they are already used to transacting with companies that offer them loyalty. The complexities are greater in the audience relationship and personalisation requirements but the rewards can be huge. In a recent programme, we delivered a 23% increase in revenues, 80% increase in referrals and 43% increase in brand stretch. Imagine what that could do to your business trajectory.

Any good loyalty programme should be a win for the customer as well as the business. A customer might switch their behaviours for a short time to get a specific reward but if the programme doesn't fulfill their needs long term, then the behaviour change won't stick. Ultimately your businesses service or product has to match the customers needs and then the experience they have with the brand has to match their values. If you can create an experience that the customer is happy to refer and talk about you have created something they feel part of. They have an emotional connection, and it is that emotional connection that a loyalty programme is designed to create.

We are firm believers that loyalty starts within, and you cant preach loyalty to your customers, if you aren't practicing it with your staff. To that end we would always recommend using your loyalty platform to run a programme designed for your staff. Using a similar programme on the same platform means your staff will be better able to communicate to your customers and are more likely to live and breathe your brand. In B2B the relationship the customer has with the sales teams is even more important than it is in B2C so it is vital to get this part right.


LoyaltyStream Key Features

  • 21 loyalty campaign types to suit every business
  • Options to deploy gamification campaigns such as Spin-To-Win and Prize Draws as well as Badges
  • Ability to track and reward all behaviours from transactions to actions
  • In-depth visual analytics and insights on Campaigns, Members, actions and transactions
  • Customisable CRM and segmentation options to suit your Member profile
  • Scalable modular SaaS platform that can grow with your business

 

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