All the Airlines have it. Who does not want to be a Lufthansa Hon or an Emirates Skywards Platinum member? And all the hotels have it. World of Hyatt Card owners and Hilton Honor beneficiaries appreciate the free Bonus nights and the Suite Upgrades they frequently get. All the retailers have it. They formed some of the biggest multipartner programs, like Payback in Germany, offering a mixture of reward and cash-back Options.
B2B Loyalty schemes are far less known and a lot more difficult to push to success. iq! analyzed some Best Practice examples and summarizes the success factors in the B2B Loyalty market.
The travel industry profits from the avaliable ressources they may allocate at zero additional cost. Loyalty offers are more challenging for manufacturers who cannot play with free capacities that easily. B2B Loyalty programs are even more challenging. Each customer consists of various target persons. Legal issues play a role. The definition of relevant rewards is much more complicated.
B2B Loyalty Options
B2B Loyalty program options
Source: iq! Managementberatung
Companies operating in the B2B market have various options to better attend to their customers. Like many B2C Loyalty programs, reward schemes are possible. Clients accumulate points in exchange of their purchases. These points may be redeemed against rewards. In the best of cases, these rewards are related to business customers are operating in. An example of a very target-group oriented Reward system is Unilever’s Chef Rewards Program. Destined to specialists in the kitchen, the reward portfolio includes solely products that are helpful to this professional guild.
In contrary to the Rewards Program, the benefits are purely monetary within a Cash-back scheme In the Staples Rewards Program, sales volume of clients is translated into earnings applicable to future purchases.
Benefits & Services
Some programs focus primarily on rewards that have a service character. L’Oreal’s Level Loyalty Rewards scheme dedicated to professional hairstylists contains a rewards catalogue with Business-relevant products, but puts a special focus on educational offers and shop decoration services.
One way to push sales efforts via a loyalty initiative is a contest or throphy. It is especially suitable for B2B companies with large networks of external Dealerships or Franchise Systems. A high monetary or emotional value of the rewards for the “winner teams” can set a very convincing incentive.
B2B Loyalty requirements
In a B2B environment there are some crucial factors of success for loyalty efforts:
- Loyalty works best for SME: the larger the clients the company serves, the more difficult loyalty gets (because of complex purchase processes with a multitude of participants, etc.)
- Define your target persons: even in very small corperations, loyalty marketeers should address certain target employees very specificly or design rewards dedicated to the entire organization
- Pick up your target group: it would be rather difficult to fill the reward assortment with classical B2C products like a coffee maker, a hair dryer or a yoga mat. The program will work only if rewards are meticulously adapted to the Business of the target group
- Invest in attractive rewards: understanding the (unfullfilled) needs of the target group gives companies the chance to create a really convincing and desirable reward portfolio
- Read the data and learn: tracking the behaviour of the program participants will help in enhancing the offers and the processes
- Think about suitable Partners: the earn side (collecting points) and the burn side (available budget for rewards) gets more interesting for customers when more Partners are participating in the program
- Evolve: customers get bored soon. So better keep them entertained and add or change contents and offers of the program on a regular basis
Loyalty schemes in a B2B Environment have slightly different rules than their B2c counterparts. The core mechanic and the offer portfolio have to be tightly matched to the selected target persons in the customer organization. Selecting a B2B System style (rewards, cash-back or other) is based on available budget, industry, longitude of planned efforts, etc.. Corporate purchase decisions are not so easily influenced by a loyalty system. That increases the pressure of introducing really appealing incentives.