B2B Loyalty Marketing: Three Core Principles of Successful Loyalty Programs
B2B loyalty marketing is an essential part of the marketing strategy of every B2B enterprise. Businesses and brands have traditionally focused most customer loyalty marketing efforts in the B2C business space. However, loyalty marketing and an effective customer loyalty solution are equally important for B2B enterprises, if not more so.
The sheer size and ubiquity of consumer loyalty programs contribute mightily to this reality. With US consumers having more than 3.8 billion loyalty program relationships, there’s a lot of interest in maximizing performance from both the business and consumer sides. Today, many leading companies are successfully applying B2C techniques into their B2B loyalty marketing strategies.
As we’ll see, this isn’t counterintuitive. There are three Core Principles that Brierley knows are essential for every successful loyalty program. These principles apply to both B2C and B2B loyalty solutions, and perhaps even more important for B2B programs.
Three Core Principles of Successful Loyalty Programs
Brierley believes every loyalty program should include certain principles to be effective and return a positive ROI. The three Core Principles of successful loyalty programs are:
- Offer a simple, compelling value proposition.
- Enable enhanced customer experiences.
- emotional loyalty and engagement.
Ensuring your B2B loyalty solution includes these principles is essential for the success of your program and your business’s relationship with its customers or clients.
Principle 1: Offer a Simple, Compelling Value Proposition
Leonardo da Vinci said, “Simplicity is the ultimate sophistication.” Although your business’s customers may not be expecting the Mona Lisa of loyalty programs, they are more likely to engage in your program if you heed Leonardo’s wise counsel and keep it simple.
Simplify Your Program Promise
Your value proposition must be easy for business customers to quickly understand and for sales associates to convey. The importance of simplicity is typically greater in B2B settings. In working with numerous B2B clients, we find customers are typically balancing multiple differing incentives and programs and sales initiatives from multiple divisions within the same company.
As you design your program (or enhance it), strive to consolidate other initiatives and incentives to provide a single, clear, valuable, and easy to digest value proposition.
Analyze your existing customer base to identify optimal segments based on relative frequency, sales, and profit contribution. In most cases, you’ll find the Pareto principle more than applies: 20% or less of your customers are driving an outsized share of performance.
Consider tiering benefits and incentives to reward your customers based on their relative contribution to your success. For example, certain benefits could be “unlocked” upon reaching certain tiers. Examples of tiered benefits could include:
- VIP trips to sporting events
- customer summits
- exclusive brand merchandise
As with B2C programs, your tiered program can also incorporate “tier multipliers” where, for example, a Gold member might earn 50% more points than a Silver member.
Balance High-Value Benefits with Costs
Customers have to perceive that your program delivers significant value to them over your competitors’ programs. In many cases, that could mean discounts, but discounts alone don’t guarantee success.
You should provide benefits that your customers perceive as valuable but don’t break the bank. Examples of low cost/high-perceived-value perks that Brierley has employed in successful B2B program designs include:
- expedited processing
- access to senior leaders and designers
- providing input into product/service design are all
We recommend modeling your program design to project its potential effect on incremental sales and profit under multiple growth scenarios. This will best balance the richness of rewards and incentives with the incremental cost so you can maximize your loyalty program’s ROI.
Principle 2: Enable Enhanced Customer Experiences
Personalize with Purpose
Strong B2B loyalty programs recognize that all customer relationships are personal, and thus personalizing the loyalty program for your customers without violating their privacy should be a priority. Businesses should strive to tailor incentives and communications to their customers or clients on their terms, based on their unique business situation.
For example, Brierley worked with a major homebuilding supplier who had a customer base ranging from small, one-man general contractors to large, national home builders. We designed a program that rewarded their members regardless of size, but it provided richer incentives based on overall share of materials purchased.
Remove Barriers & Increase Convenience
Identify your customers top pain points with your organization. If you don’t know, field a quick customer survey, or call a diverse sample of customers to hear it for yourself. Removing any barriers, blockers, or bugs is important to making your loyalty program as convenient as possible.
Based on that input, incorporate options into your program that address their concerns. For example, in designing a program for the home-building supply client, customers cited confusion about the many competing and often contradicting incentives, offers, and rebates from the company. In response, we proposed a streamlined umbrella program offering greater value to the customer and higher ROI to the client, while terminating less popular and poorly performing incentive programs.
Principle 3: Cultivate Emotional Loyalty & Engagement
Maria V. Snyder wrote, “The heart is a strange beast and not ruled by logic.” Although it may not be obvious, it could be argued that Ms. Snyder’s observation is more applicable to B2B loyalty marketing than to B2C marketing.
Although business owners and marketers often profess devotion to the bottom line, ROI, and other more easily observed metrics, everyone is human. Decision makers, whether in a B2B or B2C setting, are evolutionally wired to rely on gut instincts, including being driven by trust and long-standing relationships.
This applies just as well to your customers, one of the reasons it is so important to cultivate the customer or client relationship to build emotional loyalty.
What are ways we can drive emotional connections in B2B loyalty marketing and build better relationships with your clients?
Add Elements that Forge Deeper Ties
As with B2C programs, adding benefits and engagement elements that reciprocate advocacy make your program more fun and deepen your connections to customers.
For example, in working with a major medical device provider, we added member-exclusive contests, surprise & delights, and games that capitalized on doctors’ innate competitiveness.
Introduce Exclusive Experiences
Schmoozing and entertainment have long been integral parts of sales and customer retention in B2B marketing. Consider complimenting these efforts with a more structured approach that opens these opportunities up to a larger share of deserving customers.
For example, consider offering unique, highly valuable “money can’t buy” reward options. Examples of exclusive rewards offers could include:
- access to sold-out concerts
- tickets to sporting events
- unique brand experiences
For example, Hertz’s rewards program provided an option for its members to redeem miles for tickets to the Porsche Driving School. In many cases, partner companies may provide funding/access as a way to expand reach to your valuable customer base and incent trial.
B2B Loyalty Program Opportunities
The opportunities and challenges in driving B2B customer loyalty are quite similar to B2C loyalty marketing. In many cases, they are actually magnified.
By following Brierley’s Three Core Principles of Successful Loyalty Programs, you will be well-positioned with a competitive program that delivers highly personalized yet emotionally compelling value to your customers.
Advice from B2B Loyalty Experts
For expert advice and consultation regarding your B2B customer/client loyalty strategy, Brierley is available and ready to help! To learn more about how Brierley’s customer loyalty strategists can help your brand create and/or optimize a relationship-focused loyalty solution, contact us today.