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Business-to-Business (B2B) loyalty programs might not claim the largest footprint in the loyalty space, but their value cannot be ignored. As companies seek to build, strengthen, and keep relationships with business customers, it is critical to dedicate efforts to making sure that existing programs are supporting objectives and that new initiatives are planfully designed and implemented to avoid lackluster results.
As the landscape of customer loyalty, in general, has shifted over the past three years, B2B loyalty programs need to adapt to meet the expectations of members while navigating the current economic uncertainty. With an emphasis on nurturing emotional loyalty, rethinking assumptions around current programs, and forming strategic partnerships that benefit both sides, businesses can better align their programs to navigate the next set of challenges and opportunities that inevitably will come.
Loyalty360 spoke with supplier members and loyalty strategy experts about best practices on building meaningful B2B loyalty programs.
Chris Galloway – Executive Vice President of Strategy, Brandmovers
Cara Panosian, Digital Marketing Associate, Brandmovers
Jonathan Silver, CEO, Engage People Inc.
Bindu Gupta, Sr. Director - Customer Strategy, Research & Insights, ICF Next
Connie Sisco, Senior Connections Strategist - Strategy, Experience, Research, & Insights, ICF Next
Luke Olliff, Senior Director of Strategic Services, The Lacek Group
Motivating Emotional Loyalty — with Customers and Employees
With a range of B2B loyalty programs to consider, businesses must work to shape how it translates for their customers. Customer demographics, their preferences and wants, and what they value must be understood to implement a program that successfully engages the member while building emotional loyalty.
“B2B customer loyalty program benefits fall into a few basic categories: rewards, perks and privileges, professional development, and rebates/discounts,” explains Brandmovers’ Panosian. “They all have their own appeal depending on the circumstances surrounding the program audience. Generally speaking, however, the most effective benefits — the ones that engender loyalty and growth — create an emotional connection between the customer and the brand.”
Along with designing, developing, and rolling out a program, businesses need to understand timing messages to target customers at the right time. Referral perks can play a significant role in motivating customers to interact with the program.
“Referral perks or rewards are a proven benefit that works to motivate business customers as B2B buyers are heavily influenced by peer recommendations,” says ICF Next’s Connie Sisco. “But more important than what benefits to offer is knowing when to engage customers. With longer buying cycles and larger decision committees in the B2B space, utilizing the data captured through a B2B loyalty program can help shed light on customer segments for a brand and when in the customer lifecycle a relevant benefit should be offered.”
Employees can be rewarded through B2B customer loyalty programs, too. With shrinking budgets in a tough economic climate, benefits can be extended to employees to strengthen relationships and encourage enthusiasm, buy-in, and loyalty to the employer. Lacek’s Olliff notes that he sees value in building a structural component into the core rewards that make them sharable.
“This allows the business to share rewards earned through program engagement with employees or clients,” says Lacek’s Olliff. “In the current labor market, employee retention and recognition are a major concern, but many businesses have a limited budget for this. By creating a loyalty program reward that can be passed on from the business to the employee, the program is showing that they care about the business as a whole not just the part that interacts with the program.”
Building emotional loyalty is an ongoing process. Businesses understand the need to cultivate emotional loyalty with their customers, but they don’t always know how to successfully do it. One way is through corporate social responsibility (CSR) initiatives and demonstrating a commitment to sustainability efforts.
“B2B loyalty programs are great tools to engage and retain clients, however, these programs need to focus less on transactional elements and more on emotional elements by demonstrating trust, appreciation, reliability, investment, empathy, and shared values,” says Bindu Gupta, ICF Next. “For example, HP Planet Partners Rewards Program rewards businesses for returning used HP print cartridges to promote recycling. This is a great example of connecting emotionally through shared values where businesses can earn rewards while also contributing to the environment.”
Panosian highlights personalized experiences as a way to earn customer trust and receive their business in return. “Offer them experiences tailored to their interests and preferences. Recognize their individual priorities and show them you care about who they are. Make sure your program is fun! Include fun activities in your loyalty program that will get your customers excited and engaged. When you create a positive emotional experience, your customers are more likely to keep coming back.”
Silver also notes that B2B brands and loyalty programs can build emotional connections through enhanced product offerings. Tapping into customer feedback through questionnaires or research can point brands to what works best. Applying those findings to the program and modifying them as necessary can evolve the program.
“Successful B2B loyalty programs are always learning and making necessary adjustments to their loyalty programs to meet the current and future needs of their clients,” says Silver.
Business Mindsets Can Be a Challenge and Can Be Changed
Loyalty programs must evolve to succeed, and while many businesses know this, they don’t always act if they do not perceive a problem with the status quo. If it’s not a sharp pain point, programs can be left to languish — at worst — or meander with no thought to innovation or elevation at best.
“Three key mindsets are restricting the capability of today’s B2B incentive and loyalty programs: inertia, one-size-fits-all, and set it and forget it,” says Brandmovers’ Galloway. “Overcoming each of these limitations requires bravery and buy-in from senior management, and that isn’t easy to get. ‘If it ain’t broke, don’t fix it.’ Our clients tell us that everyone in the workforce has too much on their plate. To break these ingrained mindsets, business people need to understand what they stand to gain by making these complex changes.”
Galloway goes on to explain three areas in which businesses — and loyalty professionals — can implement change, beginning with recognizing the limitations of transactional programs. When the rewards are no longer enough, or a competitor makes a better offer, the benefit/loss calculation is easy for customers to understand. The next is to “stop racing to the bottom.” Increasing reward spend can reduce ROI. Once again, if the program is merely transactional, customers might eventually be lured away. Build a relationship with them by offering true value and giving them what they need to succeed.
“A ‘one-size-fits-all’ perspective of programs fits nobody,” asserts Galloway when driving home to the third area where businesses need to adjust their mindsets. “Programs should be tiering rules structures, recognize their best members’ behaviors beyond transactions, and use segmentation to identify where strategies and rules need to vary to best serve members.”
Engage People’s Silver offers insight into building out a program that combats the “one-size-fits-all” mentality. For him, rewards that are not individual in delivery but corporate in scope need to be designed to motivate clients and customers based on the relationship.
“Brands can utilize surveys and customer research to determine how best to motivate a B2B partner to either spend more with your business, get referrals, give you the insights you need to improve, help drive innovation, and ultimately increase revenues. Offering enhanced product offers can also help increase loyalty,” adds Silver.
The Changing B2B Loyalty Landscape
In the last two to three years, brand approaches to B2B customer loyalty have changed as the B2B loyalty landscape evolved. Loyalty professionals are transferring what they’ve learned from established customer loyalty programs and applying what has made them successful in B2B programs. Additionally, mid-market companies are joining the B2B space and making an impact.
“We have found more brands are offering B2B loyalty programs with brands like Home Depot (not a client) and home improvement stores offering tiered loyalty programs to contractors to retain spending and connection,” says Silver. “Understanding customers and what motivates them has become more sophisticated with learnings from B2C being applied to B2B relationships.”
Brandmovers sees an entirely new segment of customers moving toward B2B loyalty. Panosian explains, “Because the cost of entry has decreased due to modern technology, we are seeing more and more mid-market companies enter the B2B Loyalty program arena. Older programs are still operating and trying to innovate their experience, but these newer entrants are fueling a surge in demand.”
The Right Partnerships Can Elevate B2B Loyalty Programs
Strategic partnerships can be a key part of B2B loyalty programs, especially as part of “value add” or by providing extra program benefits. While B2B brands approach partnerships differently, Olliff recommends that partnerships should focus on providing value to the member that expands beyond the brand’s core offerings and keeps the brand top of mind.
“The brand should find partners that members already use, and through a thoughtful partnership, offset member benefit cost while increasing perceived program value,” says Olliff. “It is important for brands to understand their customers before adding partners. For some brands, it might be most beneficial to add one big partner, while for others, they should focus on adding many smaller partners.”
Forming the right partnerships can increase participation in B2B loyalty programs. For the partnership to work, both brands must benefit, with clear expectations and goals defined.
“B2B brands should identify what they want to achieve with the partnership and develop programs and benefits that incentivize the partner to help deliver against those objectives, i.e., customer referrals. Combining the skillsets and marketing initiatives of a partnership can help amplify your brand’s efforts and encourage customers to spend more with your business. Home Depot’s tiered program is an example,” adds Silver.
Where Brands Can Start
For brands looking to improve their B2B customer loyalty programs and strategies, prioritizing research — through studies, collecting customer feedback, etc., developing clear program goals, and creating strategic partnerships to build on benefits and rewards could deliver early wins. Continue to track any changes or initiatives to ensure the impact on the program is positive and moves the brand closer to meeting its objectives.
“Whether a brand is starting a new B2B customer loyalty program or looking to improve an existing program, the key to delivering a loyalty program that provides meaningful benefits to customers and drives engagement is understanding what will resonate best with them. This could take the form of a comprehensive quantitative research study or could be as simple as integrating small, bite-sized questions to solicit feedback directly from customers. Building a loyalty program based on the collected feedback will demonstrate to customers that the brand is listening and values their input,” emphasizes Sisco.
For Olliff, it’s all about understanding the goals of the program when starting or improving a B2B program. Ensuring the goals of the program and the brand’s goals are aligned will further strengthen efforts.
“Are you looking to drive incremental revenue, increase engagement, or capture data? Each of those creates different challenges and opportunities, so it is important to clearly define your goals before you start building,” says Olliff.
Silver brings it back to developing strategic partnerships and defining the types of partnerships in place. “What do you want to achieve? Assess where you are today in those relationships and then develop campaigns/programs and partnerships that can help deliver your objectives. Track performance and highlight the positive impact with your B2B partner then adjust as necessary. Always seek feedback and use the feedback to innovate and improve your current program. This will help create not only the desired results but also a long-term and happy client/partner.”
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