It’s no secret that we spend most of our time getting excited about exploring B2B loyalty programs — it’s been our bread and butter since 1996, so it makes sense that B2B loyalty is what we live and breathe. We love diving deep into the pain points facing businesses and designing strategic solutions that help elevate our client’s brands above their competitors.
However, our expertise can sometimes mean we take the basics for granted, and those foundational pieces are only occasionally straightforward. Many of you are likely members of a B2C loyalty program, but the differences between B2B and B2C are night and day.
This is a good thing – it gives us an excuse to break down B2B loyalty programs for some vital content for our readers! In this piece, we’ll explain what B2B loyalty programs are, the characteristics and challenges in the B2B market, the differences between B2B and B2C, and more!
Let’s start with the basics – what exactly are B2B loyalty programs?
B2B loyalty programs (sometimes known as B2B rewards programs) are solutions employed by a B2B business to help brands solve pain points they may currently be facing or anticipate facing. The B2B market differentiates itself from its B2C counterpart by being far more emotional, relying on relationships with customers and additional value provided to reach the top of the pack.
This means that your program needs to understand your customer base and what they need from your brand and find unique ways to provide it to them to stand apart from competitors.
Generally, the five pain points that a B2B business would be looking to solve are:
These aren’t the sole reasons for creating a program, but the issues facing a brand will likely fall within these five categories. This is a good thing – when partnering with our clients, we build an understanding of their brand and their issues and help create a unique solution that their customers will engage with while sharing authentic values and communications to capture their hearts and minds.
As mentioned above, a significant factor separating B2B and B2C is that sales are far more emotionally based due to interpersonal relationships between customers, the sales team, and support. This leads to your brand being pitched rather than using more distant advertising to capture minds.
The B2B market is also much smaller than the B2C market and offers more profit yield than selling directly to consumers. This also means that building relationships with potential customers is more time-consuming, and the sales funnel for B2B has more steps and takes longer to close the deal.
With a smaller pool and emotionally charged sales, finding ways to retain and engage the valuable clients you have and capture their ongoing loyalty is essential for continued success.
Most of us are members of a B2C loyalty program. Woolworths’ Everyday Rewards, Flybuys, and Village Rewards are some examples of programs that you may have joined, but these operate very differently from the B2B market.
Firstly, membership in B2B programs can take longer – as with the sales decisions, these programs can require a contract or purchases. With the decisions taking longer, this also means that the value offered to your clients needs to be enough to sway them to your side.
Because purchases can be less frequent in the B2B market, points and redemption strategies may be flawed for some programs, and point values will need to be amended with this fact in mind. Your rewards also need to have enough power to keep all types of purchasers around – having a wide variety of bonuses and incentives cost at different levels will ensure that all customers can draw value from the program, regardless of engagement.
In B2C programs, rewards can afford to be comprehensive due to the expectation that your members will spend a little and you’ll have a lot of members to cover your program’s budget. This differs from B2B markets, where your customers will have less variety and, thus, will be less budget-able to be rewarded. This can be solved by using the customer data you can gather and the existing relationships with customers, which can provide bespoke tailoring of your reward selection to ensure relevant, engaging products are available for the audience who would want them.
Although B2C programs are becoming more tailored to specific customers, this has only sometimes been the case regarding communication strategies. I’m sure we’ve all received a generic email from a program we’re a part of that we glance over and disregard – this isn’t a luxury that can be afforded to B2B programs. With a smaller audience with existing ties to your brand, communications must ensure they speak directly to the recipient.
We can offer this through our Engagement Loyalty Model (ELM). Using the data that your brand has and that your program is built to gather, we can analyse your customer base, break the entire cohort down into smaller segments, and then communicate with them based on their engagement, purchase history and habits to make them feel like they’re being spoken to one-on-one.
This level of personalisation is required to set your brand apart from competitors and put you on the winner’s podium when it comes time to purchase. In exchange, you’ll have loyal customers who showcase and advocate for your brand – something more powerful than a B2C program could ever hope for!
