A quick look in the slots where bank cards should sit in my wallet is revealing. Firstly, I could do with a receipt purge and secondly, customer reward programs are ubiquitous in the B2C world. From cafes to shops to gyms. There are few consumers immune to a juicy perk for remaining loyal to a particular brand. Rewarding loyalty enhances the customer experience, aids client retention, and builds brand engagement. Rewards programs in the business-to-business arena are gaining popularity. In this article, we will look at why loyalty programs work and how you can measure their success.
Loyalty programs work because they help customers feel valued and appreciated. It’s not just about giving the consumer the warm and fuzzies. Tapping into these emotions leads to increased retention, referrals, and revenue. Loyalty schemes help businesses stand out from their competition. They can also incentivise desired customer behaviour.
Granted, in the B2B space, customers are a less studied group than their B2C counterparts. And considerably more difficult to define. Often, B2B companies will be targeting a team of buyers, rather than an individual. But, that team is still made up of people guided by the same emotions as those targeted in B2C marketing strategies. Developing relationships with B2B customers can be extremely beneficial.
The short answer is yes, B2B companies should reward customer loyalty. Why?
Acquiring a new client can cost five times as much as keeping one. It is worth strategising to keep the customers you have happy and loyal to your brand. The best loyalty programs can also be considered customer retention programs.
According to Lumio, at least 80% of B2B buyers are not only looking for but expect a buying experience like that of a B2C customer. That’s a high number of clients who want to feel valued and appreciated on their B2B customer journey.
The ramifications of a customer loyalty program for B2B businesses are huge. Arguably, they are just as important as they are for consumer-facing businesses.
What does customer loyalty look like in the B2B world? Because loyalty may manifest itself in different ways, it’s challenging, but possible, to quantify. You can use the following three metrics to measure customer loyalty:
How many of your consumers return to buy from you? This indicator measures how long clients stay with your company after making their initial sales. You can track RCR with your customer relationship management system. Use RCR as a benchmark for measuring the performance of your loyalty programs and initiatives. You can measure this monthly to see what percentage of consumers are returning to you as your loyalty efforts progress.
This metric calculates the profit generated by each of your customers during their relationship with you. Calculate the CLV for each of your clients’ using data on annual revenue, buy frequency, and sale trends. Identify your highest-value consumers and find out what is keeping them connected to your brand. This may unlock what is preventing loyalty among your lower-value customers.
NPS reveals how likely your customers are to suggest your product or service to a friend or colleague. Your customers becoming ‘mini-marketers’ on your behalf is one of the most obvious ways to assess customer loyalty.
Any one of those three indicators will offer you useful information about how loyal and engaged your customers are. If you consider these markers altogether, they can provide a full picture of how successful your loyalty program is.
IBM’s Loyalty program is one of the most well-known B2B loyalty programs available. The scheme has two main goals.
1)To show appreciation by rewarding customers for their current activities
2) To encourage members to learn more about IBM’s services.
To do this, IMB’s program includes:
Efforts to improve client experience demonstrates to customers that you care. As a result, these customers will become loyal and buy from you again and again. Make a connection with your present clients. A loyal customer will continue to engage with your brand and tell their friends and family about it. Customer loyalty and word-of-mouth marketing go hand in hand.