Creating memorable online experiences is the golden rule for customer retention. Engaging new and existing customers with interactive programs provides the best chances of repeat purchases. This concept applies to B2B organizations just like other businesses.
B2B customer loyalty programs are a must-have for any online retail business that hopes to make its customers happy, which is why customer experience is the top priority for businesses in the next five years.
While B2C loyalty programs are all around us, there is increasing competition among B2B organizations to have the best relationships with clients, vendors, suppliers, and partners. The question that arises after a business has successfully incorporated best-in-class technologies is how to build a B2B loyalty program.
Before jumping into the types and features of successful B2B loyalty programs, let’s understand the concept behind them.
SMEs and enterprises hoping to make big bucks in today’s market need B2B loyalty programs as a key tool to boost revenue by connecting with customers. These programs are gaining recognition at a fast pace due to their guarantee of making customers happy regardless of the type of business relationship.
That being said, it is not only tough but near-impossible to build and scale B2B loyalty programs without utilizing cutting-edge AI technology. One of the major areas that needs to be monitored and controlled is customer churn, which becomes a concern in the B2B environment otherwise.
The US B2B eCommerce industry is expected to reach a market value of $1.8 Trillion by 2023. Although B2B companies have a smaller customer base as compared to B2C service providers, their transaction amounts are generally much bigger. B2B deals include bulk purchases or long-term subscriptions in the case of services.
In order to encourage customers to make repeat purchases, more and more companies are actively looking to incorporate the best B2B loyalty programs. Research shows that there is a 2% increase in customer retention has a similar effect to a 10% reduction in overall cost.
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What is a B2B Loyalty Program?
B2B loyalty programs are designed to engage and retain customers, particularly dealers, retailers, distributors, and third-party vendors in B2B organizations. These rewards programs include tactics to help build brand loyalty by offering something extra to long-time business customers.
Unlike B2C loyalty programs, those adopted by B2B organizations vary depending on how they are structured and the types of incentives they provide. B2B customer loyalty programs help tech businesses like Saas providers by growing their customer base and encouraging existing customers to keep coming back for future purchases.
Rewards programs in the B2B environment also offer limited entries depending on the business criteria.
Instead of identifying and delivering what each individual customer needs, B2B loyalty programs help decision-makers minimize their concerns. As a result, these programs contribute to improving relationships with business partners and other parties involved.
Every B2B eCommerce business has to play smartly and make sure that existing customers are not only satisfied but convinced to stick with them. The common aim is to grow in terms of eCommerce business value, which, in today’s highly competitive market, is no easy task.
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What Makes the B2B Market Unique and Challenging?
The B2B market stands apart from other types of business areas as it generates maximum profit from clients rather than sales to customers. Retaining valuable clients is naturally more challenging than establishing customer loyalty in a B2C organization.
Instead of investing time and money in client acquisition, businesses strive to consistently satisfy and engage with existing clients. In general, B2B companies do not onboard clients as frequently or easily as B2C retailers.
One of the main characteristics of the B2B market is that there are bigger, less frequent deals with clients. Similarly, the demand for products and services can go up and down depending on the specific clients a B2B organization has on board.
Moreover, the purchasing of services and products in B2B is not as simple as making a payment and receiving delivery. It usually involves a longer, more comprehensive process.
Long-term client relationships are a must-have in B2B, as these come with the promise of a consistent ROI. That being said, clients of such businesses also have to undergo a complex decision-making process after considering various aspects of the particular deal.
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Types of B2B Loyalty Programs
Now that we have developed a basic understanding, let’s take a brief look at some of the popular types of B2B loyalty programs for different business models.
Designed for businesses that like to offer a variety of rewards to their loyal clients, these programs provide the opportunity to earn and redeem points for different incentives.
In this type of B2B loyalty program, clients earn rewards for each purchase they make. The higher the amount they spend, the more rewards they receive.
Tiered rewards programs
Similarly, tier-based rewards also encourage B2B customers to increase their spending by categorizing rewards into different levels. Higher-spending customers are placed in higher tiers, and receive better rewards in terms of value.
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Differences Between B2C Loyalty Programs and B2B Loyalty Programs
Putting together a B2B loyalty program that works is a tricky process. Some companies misunderstand the difference between B2C and B2B loyalty programs.
It is imperative for B2B companies to avoid mixing up these two types of programs, and consider the target audience before designing a rewards program from scratch.
B2B Loyalty Programs
B2C Loyalty Programs
Business clients are required to make a purchase or sign a contract before joining
Usually free to join, and members receive rewards upon registration.
Earn and burn loyalty points
Rewards are usually in the form of exclusive invites or business growth solutions
Discounts, early access to new products, and opportunities to earn double points
Customized rewards for each client in the form of training, growth-oriented sessions
Personalized emails and rewards based on customers’ preferences
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Features of B2B Loyalty Programs to make your brand stand out
B2B loyalty programs come with special characteristics that are designed to set your organization apart from the competition. Here’s what makes these programs really effective:
As one of the features unique to B2B loyalty programs, co-operative incentives provide a great way to reward loyal business partners, third parties, and suppliers.
These rewards not only help strengthen business relationships but also contribute to improving overall performance.
For instance, assisting a business partner that is relatively new to the market with expertise allows them to grow at a faster pace.
This category of rewards offers a way to reward customers regardless of their spending or points earned. Offering VIP memberships to loyal clients allows B2B companies to boost engagement.
They can also include surveys and draws to give away exciting prizes.
VIP membership rewards usually do not include tiers or points, and all members are eligible for benefits upon registration into the program.
Just like B2C programs, B2B loyalty rewards also come in the form of merchandise and collectibles with the brand’s logo on them.
These rewards are offered to client companies for free along with the delivery of an order.
Even though these kinds of rewards are quite simple, they can help improve productivity by raising the morale of employees who receive them. For businesses with great partnerships, getting branded merchandise is no big deal.
Another type of reward that is taken directly from B2C companies - experiential rewards can come in the form of anything like access to exclusive events or free tickets to a movie.
The goal is to make the employees of your business client happy with exciting incentives. These rewards are not always costly but should always have an innovative touch.
Referrals are a big thing in both B2B and B2C. Customers who provide positive feedback, share your products and services within their circle, or simply recommend your B2B loyalty program to someone always deserve rewards.
Referrals always have a positive effect on revenue, which is why B2B companies are seen rewarding these customers with exclusive incentives.
This is a program indirectly connected to B2B environments and designed to create a win-win situation for both the business and its clients.
By dividing rewards into two categories, businesses can offer incentives to their customers while also looking after tenants. All this results in improved productivity and hence, more profits.
These surveys are a smart way for B2B organizations to get detailed insights into customers’ journeys. As part of a rewards program, gamified surveys require loyal clients to fill out additional information before they receive the incentives meant for them.
Clients can also enter a prize draw if they agree on providing some extra information. This feature of B2B loyalty programs is particularly helpful in creating personalized user experiences.
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How to build a successful B2B loyalty program?
Achieving success with B2B loyalty programs mainly depends on the following aspects:
How user-friendly the program is
How much data the company has about its clients
Analysis of past sales
Here is a sequential guide to how your business can set up a successful B2B loyalty program:
1. Define goals
Considering the category of customers you are willing to target, the first step involves defining the right audience for your B2B loyalty programs.
2. Analyze sales data for each category
The best B2B loyalty programs are defined by taking measurable, data-driven steps to extract maximum value. Utilize next-generation customer retention solutions for online retailers to leverage client data and achieve a higher ROI.
3. Customize rewards for each category
Just like in B2C companies, the preferences and business relationships with each client are different. Considering the specific requirement of each business partner, you can capitalize on multiple sales channels by offering customized rewards.
4. Ensure that the program is user-friendly
Regardless of the type of rewards you are offering, avoid taking your corporate clients through long and tiring steps just to register in the loyalty program. Its best to tailor the loyalty program for members to make them feel that your company really cares about them.
How your loyalty program members earn and redeem their points is crucial, and in this case, the simplest of the lot always wins.
5. Analyze initial results for further improvement
Last but not least, make sure your business is always ‘moving with the times’. As customer expectations increase, your B2B loyalty program should also evolve with the necessary upgrades.
Focusing on profits, your business can utilize AI-based tools to prioritize the areas that can generate the highest revenue.
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5 Best Examples of B2B Loyalty Programs
1. IBM VIP Rewards
Being one of the biggest and most widely-known programs in the market, IBM’s loyalty program is aimed at appreciating customers and keeping them engaged by offering gamified rewards.
The VIP program offers access to exclusive services through predefined challenges.
Customers who successfully perform the required steps earn loyalty points that can be redeemed for interactive sessions with IBM professionals and gift cards.
IBM’s B2B loyalty program also creates a sense of competition among loyal members by maintaining a points-based leaderboard.
2. Celebrity Cruises Rewards Program
Celebrity Rewards is another great B2B loyalty program that targets the travel industry. The Celebrity Cruises program offers direct cash incentives on trip sales. Travel agencies are encouraged through the following incentives:
A travel agency receives 500 points for every cruise trip they sell
If an agent has 2,500 points, they can exchange the points for cash with a Celebrity Rewards Mastercard
In case of multiple travel agents, each agent gets their individual points.
Members can take part in Lenovo’s educational sessions to earn points
Loyalty points can also be earned by selling Lenovo products
Points can be redeemed for cash rewards or gift cards through individual Leap accounts
4. Telarus Partner Loyalty Program
Similarly, Telarus encourages its corporate partners to sell their services through a smartly designed B2B loyalty program. The rewards program effectively brings together cybersecurity companies, cloud networks, and commercial entities to improve sales.
Loyalty points are earned depending on the value of the deal and the business partner.
The program offers partner-specific rewards in the form of sales training, VIP experiences, gits, and marketing services.
5. Mailchimp Membership Program
Popular email marketing service provider Mailchimp offers an intuitive rewards program for marketers and digital agencies. The straightforward program offers exclusive rewards in the form of event invites and expertise from Mailchimp upon partnering with the company.
Loyal members are exclusively invited to partner with Mailchimp
Partners are also offered early access to upcoming products along with 24/7 customer support
Keep an eye on Customer Lifetime Value (CLV), Repeat Purchase Rate (RPR), and other KPIs to know whether your program needs upgrading.
Stay true to your customers
Ensure that each client is offered rewards based on their activities to improve your business revenue and that no client is left out.
Avoid the ‘salesy’ approach
Without sounding too ‘salesy’, convince your clients with genuine reasons to take matters forward with your company. Create a presence and leave an impression that stays with your clients for a long time.
Offer easy help and support
Lastly, make sure that your business is not difficult to contact. Provide authentic information to your clients and employ dedicated team members that are always there to help.
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Run B2B and B2C Loyalty Programs with XStak's Loyalty Software
To unlock the untapped potential of B2B and B2C loyalty programs, businesses require an efficient all-in-one solution that provides real-time insights into customer journeys. XStak’s Omniretain empowers B2B and B2C organizations with next-gen technology.
Leveraging AI, XStak’s loyalty management software efficiently segments customers and corporate clients to help businesses offer customized rewards. As a result, your business can utilize this otherwise hidden information to grow exponentially and scale globally.
Applying the concepts of B2C loyalty programs in B2B environments always results in long-term benefits. Online retailers heavily rely on B2B loyalty programs to retain loyal clients and ensure a consistent ROI. These exclusive programs create memorable experiences for clients and encourage them to develop long-term business ventures.
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How can a B2B business benefit from loyalty programs?
Loyalty programs offer ways to encourage customers to stay for future purchases, which in turn improves revenues and profit margins. By satisfying loyal customers, businesses can improve retention rates and cut down on acquisition costs.
B2B customer loyalty programs are about more than just ensuring repeat purchases. These engagement tools deliver exceptional results when it comes to retaining loyal customers. That being said, getting your B2B loyalty program right is the tricky bit - so your business must take into account every aspect, big or small, discussed in this blog.
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