B2B companies can learn a lot about customer retention from the B2C market. Although B2B companies purchase decision differs significantly from B2C purchase decisions, research suggests that applying B2C loyalty practices can generate leads, increase customer retention and enhance understanding.
Challenges for B2B marketers.
Businesses strive to minimise cost and maximise profits, this, coupled with the consequences of the global recession and the increase in customer connectivity via the internet, has led to new challenges for B2B suppliers. Business customers are more demanding, dictating the terms of business which in some countries is driving local suppliers out of business.
More than ever, suppliers are now being forced to demonstrate how they add value. Product and services are increasingly viewed as commodities with little differentiation. Other challenges like the increase in remote processes for example businesses buying remotely leading to less opportunity to build a relationship with the client. Business customers are starting to utilise ‘Big Data’ which are helping purchasing departments to make purchasing decisions and often at the expense of long-term suppliers.
These trends have established a real need for B2B companies consider loyalty techniques to address customer engagement, retention and loyalty that used to be established through a sales representative.
Results for B2B loyalty leaders.
Just like B2C customers, B2B customers want great customer experience which in turn develops customer loyalty and retention with a brand. There are many benefits to implementing a B2B loyalty program some include, gaining insight into your customers’ needs and expectations through data obtained from a loyalty program.
Loyalty programs help create brand advocates that spread your name online and through word of mouth to their partners and associates. As well as that, loyalty programs can act as a differentiator from your closest competitors. Loyal customers are very important to both B2B and B2C companies, loyalty customers, in general, are the most valuable customers, typically repeat spenders and lead generators through word of mouth.
Loyalty programs offer businesses the opportunity to enhance engagement with clients and build a relationship with clients. Using loyalty programs to offer clients the opportunity to sign up for newsletters, emails or tutorials and webinars gives businesses an extra excuse to engage with customers. This communication, depending on your business offering, might encourage customers to use your product or service more, invest extra time and effort with you, and write testimonials and case studies. These all contribute to gaining trust.
While several B2B corporations dismiss client loyalty programs as strictly a B2C idea, implementation of loyalty programs can lead to growth within a business. According to Bain & Company, “B2B loyalty leaders tend to grow four to eight percentage points above their market’s annual growth.”
While other studies show businesses that implement a B2B Loyalty program, sales of the featured products nearly doubled during the incentive program and ROI averaged 10% even after accounting for variations.
In short, although B2B purchasing decisions tend to take longer time and are a more formal process, therefore, they differ from B2C purchasing processes. They still have one thing in common they are dealing with humans. Implementing a loyalty program can give businesses the opportunity to connect with clients and build relationships with them, gain valuable insights and retain customers.