Retaining customers is an important facet of B2B business. So much so, that increasing client retention rates by 5 percent can increase profits by up to 25 percent. But how do you increase retention rates? Implementing a customer loyalty program solves this problem while simultaneously building brand awareness.
Great customer loyalty programs capitalize on both emotional and financial rewards. In fact, while statistics show customers are more likely to join a loyalty program based on the financial gain, they remain in the program due to emotional factors.
Capitalizing on both emotional and financial rewards in a loyalty program can reduce churn, or the turnover in customers. Building a great customer loyalty program with rewards that people value will benefit B2B revenue.
What to include in a B2B customer loyalty program
A customer’s driving motivation behind joining a customer loyalty program is receiving relevant, valuable information and preferential treatment. While the perception of value varies from customer to customer, most people value being part of an exclusive group with special benefits.
One aspect of B2B that can be difficult is the smaller number of clients in comparison to B2C markets. However, having fewer clients can be a benefit when it comes to building a desirable customer loyalty program. Without the need for complex algorithms to build loyalty programs for different customer segments, B2B enterprises can more easily personalize loyalty programs to match individual clients.
Customer loyalty programs present the perfect avenue for companies to show how much their clients are valued. Personalization, such as individual emails and benefits specific to the client, go a long way to foster loyalty. Offering a discount for a frequently purchased product or service is one way to show your client you understand their business and can adapt to their needs.
Also, it is important to understand your client’s preferred mode of communication—whether this be through desktop email, mobile apps, or online services. As smart phones continue to dominate the industry, especially with the ever-growing number of millennials in the workforce, mobile communication options are becoming non-negotiable. Reaching your clients where they choose to spend their time will only grow loyalty.
Building a tier system based on a customer’s CLV is an important aspect of any customer loyalty program. CLV, or Customer Lifetime Value, is the total amount of revenue you can expect to gain from the client over the course of your professional relationship. Customers who have the most potential for increasing revenue should receive access to higher level rewards, such as travel programs or deeper discounts. This provides your business with revenue security, while giving your top customers the sense of special treatment that they desire. Clients with lower CLV might receive lower level rewards such as smaller discounts and personalized communication.
Ideal loyalty program rewards
Discounts and rebates are common inclusions in many customer loyalty programs and convey customer appreciation from a financial perspective. However, other rewards can be added to the tried and true rewards in order to evoke the emotional aspect of customer loyalty.
One reward option that connects clients personally while rewarding their loyalty is memorable incentive travel programs. Incentive travel programs can strengthen bonds between customers and build community through shared, once in a lifetime experiences provided by the host company. With the added human element of customers and providers meeting face to face, this further strengthens the professional B2B relationship. When it comes down to it, spending a long weekend on a tropical island stands out in a customer’s mind when considering contract renewals.
In another form of customer rewards, online software combining rewards with product training can benefit both you and the client. Customers get the benefit of customized rewards for completing the training, and you receive the benefit of more credible, knowledgeable sales representatives passing along relevant information to consumers.
Ultimately, B2B industries are limited in differentiation from competitors due to industry standards. A great customer loyalty program can separate your business from your competitors, driving loyalty with your customers and reinforcing good business relations.