Reward and loyalty programs are the cornerstones of many businesses’ customer retention strategies. Loyalty schemes are a simple way of adding more value for customers, and if you use the right customer loyalty platform, they’re also cost-effective for businesses. Any business can implement a loyalty scheme, whether they primarily sell directly to consumers or to other businesses. However, many B2B businesses associate loyalty schemes with B2C commerce, overlooking the potential loyalty schemes can offer within their own company. Do B2B loyalty programs work? We think the answer is a resounding, ‘Yes!’, but it’s worth taking a look at why.

How do B2B loyalty schemes differ from B2C schemes?

The core concept of any loyalty scheme is the same, regardless of the type of business implementing it. Like the B2C loyalty schemes that most consumers are familiar with, B2B loyalty programs aim to improve customer retention. In other words, they incentivise the business’s customers to continue buying products and services from them by offering them rewards for doing so. However, that’s generally where the similarities between B2C and B2B customer rewards programs end.

One key difference between B2C and B2B loyalty schemes is that B2B schemes generally involve some kind of long-term or ongoing commitment; access to them is rarely free. B2C businesses, including most retailers, make their loyalty schemes free for anyone to join. Initially, this might sound like a drawback, but it actually enables (and incentivises) B2B companies to offer more valuable rewards to their clients than B2C companies. Access to B2B loyalty schemes is sometimes contingent upon the client business signing a specific agreement or placing recurring orders. Naturally, the specifics vary between industries and between businesses, and identifying the right approach is key to the scheme’s success.

B2C loyalty schemes are usually the ‘earn and burn’ type. Meaning customers earn a fixed number of loyalty points for every £1 they spend, which they can then use against future purchases. This approach works well for customers making frequent, low-value purchases, but B2B transactions are generally much larger. However, the idea that spending more money with a business should equate to more or better rewards from their loyalty scheme applies to B2C and B2B schemes. For B2B businesses, tiering the scheme is an effective tactic. By offering different tiers of rewards, you can reserve the biggest rewards for your most important clients and show them you value them.

How exactly do B2B businesses benefit from implementing a loyalty scheme?

We’ve touched on some of the potential benefits of B2B loyalty schemes already, but here are the most important:

– It’s cheaper to retain existing clients than acquire new ones. This fact is at the heart of any successful business’s decision making. The costs of even the most comprehensive loyalty schemes pale in comparison to the costs associated with high customer churn rates.
– Loyalty schemes provide insight into your clients and your business. Just about every loyalty scheme today is digitised in some way, and the data they generate is invaluable for many companies. With a B2B loyalty scheme, you can track and analyse how your clients spend their money with you and find new strategies for engaging with them effectively.
– A loyalty scheme gives you an advantage over your competitors. All other things being equal, a business offering a loyalty scheme will be worth more to potential customers than one that doesn’t. It also enables you to differentiate your business from your competitors, so customers don’t start thinking, “it makes no difference who I use.”
– You can tailor your rewards to suit your customer demographic. It’s essential that any loyalty scheme offers rewards that customers want. Having a scheme is one thing, but B2B businesses in particular need to ensure they offer rewards that will add value for their clients.

What makes a well-designed B2B loyalty program?

The best B2B rewards schemes are those that effectively target a business’s clients. Unlike B2C loyalty schemes, which generally offer the same terms and perks to everyone, B2B loyalty programs offer more scope for audience segmentation. By targeting sections of your client base and offering them the rewards they will find the most valuable, you will be maximising your value proposition.

To devise an effective loyalty program, you need to be clear with yourself about what you want to achieve with it. Identify specific goals and then work out how you can achieve them. Obviously, you want to retain your clients and improve their loyalty to your business, but these are vague and ongoing ambitions for any business. With more specific targets, you can craft a more effective loyalty scheme.

To feel the full benefits of a loyalty program, you also need to have a plan in place for the data you will generate. That data can provide deep insights into your business as a whole and individual clients. These insights will guide you as you refine your scheme to maximise its effectiveness. On that note, make sure there’s a feedback system your customers can use to tell you what they think of the scheme.

Do B2B loyalty programs work?

So, do B2B loyalty programs work? In short, yes, B2B loyalty programs enable businesses to improve overall customer retention while still leaving them free to focus on enhancing their value proposition for their most important clients. However, for a B2B loyalty scheme to work, it needs to be designed and implemented thoughtfully. Taking the same approach as B2C businesses won’t yield the results that most companies are looking for.

An easy way of guaranteeing you have a reliable, well-thought-out, and well-implemented rewards program is to use the PERX Rewards platform. With PERX, your clients and staff can benefit from our partnerships with numerous leading UK brands. And, of course, your business will benefit from PERX through more conversions and less staff and customer churn. To find out more about how the PERX customer loyalty platform works or arrange a personal demo contact us today.