Should B2B Use Customer Loyalty Programs? – Part I
If you open up your wallet right now, it’s possible that several little keychain-sized cards fall out and scatter on the floor. Maybe some punch cards too. These cards are the result of years of business success from customer loyalty programs. Each card you have represents a business that is actively trying to coax you into patronizing them one more time.
Many B2C companies use customer loyalty programs, and it’s easy to see why. Loyalty programs help companies retain customers, through both incentives and a naturally-developed affinity for the brand. Customer loyalty programs also incentivize customers to come back with higher frequency because each interaction moves that person closer to another discount or reward for being a loyal buyer.
B2B businesses, on the other hand, have their own unique challenges regarding brand loyalty. B2B sales cycles are often much longer, which results in more people becoming involved with making the purchase. It’s simply easier to capture the attention of a single buyer in a short B2C transaction, as opposed to a fleet of B2B decision-makers. Many B2B companies also deal with several distributors and networks, which makes it even more difficult to personalize each person’s experience with your customer loyalty program.
So is it even worth it to try? Should B2B companies use customer loyalty programs?
Yes! According to new research from Forrester, B2B companies have a lot to gain with customer loyalty programs… and a lot to learn from B2C companies. Customer loyalty programs are not only good for offering $1 off coupons.
B2B buyers are also not cold and calculating robots. They are just as susceptible to developing loyalty and affinities for a given brand. In other words, B2B buyers also want a great customer experience!
Here are some quick benefits associated with B2B customer loyalty programs:
- It’s easier and less costly to retain customers than it is to acquire new ones.
- Loyal customers increase their lifetime value to your company by returning again and again.
- When someone signs up for a customer loyalty program, you gain insight into the information they submit as well as information gleaned from their behaviors and buying habits. This helps you personalize further deals as well.
- Customer loyalty programs help create brand advocates that spread word-of-mouth and recommendations for your business (provided you deliver that excellent customer experience.)
- While many B2B companies simply dismiss customer loyalty programs as a quaint B2C concept, creation of such a program gives you a differentiator among your competitors.
- Loyal customers are usually your most valuable ones. If you offer members of your program a chance to sign up for newsletters or emails, this gives you an extra opportunity to stay in communication with your high-value customers.
Those are all great reasons why you and your B2B company benefit from customer loyalty programs. But main questions remain: Why do customers sign up? What’s in it for them? How do you develop a customer loyalty program? Stay tuned to Part II of this blog series for the answers.