Events — 08 Nov 2022
B2B Incentive Programs
If you work in a purely B2B (business-to-business) organization or even a hybrid model, you’ll know how large and important a market it is. In fact, the B2B industry in the US alone is estimated to be worth some $6.7 trillion. That’s a lot of sales and ensuring your sales and conversions are significant is a crucial part of your success.
There are many differences between B2C and B2B models but there is one similarity that stands out a mile: customer retention. Having loyal customers who return to your business time and time again often lies at the heart of how well you perform.
While it is a common trait of both business models, is attaining it the same too? How do you keep customers loyal to your business? What methods, outside great products, and services, can you employ to encourage and improve customer loyalty? Do incentive programs play the same sort of roles as they can in B2C sales? We look at how to achieve and maintain high levels of customer retention.
As the name suggests, incentive programs are programs set up by businesses that offer incentives to customers who remain loyal to the brand or business and often can be what attracts a customer to a business in the first place. They tend to recognize those customers who not only remain loyal but also buy regularly and grant those customers higher level rewards.
The two versions of this type of program could be visualized as a Venn diagram. There are a number of similarities, both in business goals and in how they are structured, but there are also many differences between the two business models.
All those points make sense, no matter what your business model is. You have certain set goals that include either lowering your costs or increasing your revenue. There may also be similarities in how you structure and operate any incentive program. These similarities can include:
So, you can see where there are many similarities in how they are structured and how they operate, so why are there also so many differences?
Within the B2C market, you may have fluctuating spending levels, especially when it comes to seasonal patterns. In most cases, B2B spending will follow regular and set patterns. The perhaps ironic exception to those patterns is when you are a wholesaler supplying retailers that see seasonal fluctuation, thus meaning you will see peaks and troughs in those goods being bought.
B2B spending is, of course, higher than in the B2C market. You may have fewer purchases by customers, but those purchases are of higher value and, generally, higher profit margins too. As with consumer sales, the customers of B2B companies look for the best deal. 77% of all B2B customers research thoroughly before choosing who to buy from.
Given that spending may be significantly higher, it is understandable that customers are cautious when it comes to deciding on their B2B provider. So B2B providers need to put that little bit more effort in and that includes incentive programs that go beyond those offered in the B2C market. Note the following characteristics of B2B sellers:
If you are considering creating a B2B incentive program and are looking at B2C loyalty programs as models, stop! What you should do is build it from scratch, adding features that best suit your current and potential customers, as well as the B2B market you operate in. Work through a template one step at a time to build your initial model.
This is one of the main differences between B2C and B2B. B2C incentive programs are usually free to sign up for but B2B ones usually need customers to buy something first or to have signed a contract with an esign software. B2B incentive programs are also often tied to a subscription model such as found with many SaaS products.
Most B2C programs are points-based, and this model definitely suits a market where there may be frequent purchases, usually of low-value items. It does not translate well to B2B, however. You would be better considering a tiered system where customers can move up if their spending in a particular period exceeds a preset level. You can also consider different perks for then they pass those preset spending points.
It’s fairly easy to list rewards on a B2C loyalty scheme; discounts, free items, gift cards, cash back, and so on. But with B2B, you are dealing with very different demographics. That means you have to rethink your B2B rewards as you will usually be dealing with an organization rather than an individual consumer (though you may target the person making the purchasing decisions). That means offering a greater range of rewards that you can target as necessary.
Personalization is crucial whether you are B2C or B2B. Your customer wants to feel special, and when you consider the higher acquisition costs, and also the higher potential lifetime value, then it can be especially important in B2B. In the case of a B2B loyalty program, that can mean not being afraid to tailor what you offer to the customer.
For example, if you are selling SaaS products to a startup, you may want to incentivize the sale with intensive training on the product’s use. Collect pertinent customer data; you can ask them to fill out surveys, use conversation intelligence, from the inbound call handling service, or use the information you may have already stored on your CRM (customer relationship management) system.
When building an incentive program, you have two goals in mind. The first, of course, is to encourage customer loyalty and to see better retention rates. Your secondary goal is for your channel partners to be so happy with your products, customer service, and incentives, that they then refer you to other potential customers just as you may partner with other brands and agencies. Having good marketing strategies underpinning your programs can help achieve both.
While trust and transparency are important in B2C relationships too, they are perhaps more so when it comes to long term B2B relationships. Depending on your sales model, it may even be the case that any new relationship is built between two individuals (initially at least); your salesperson and the person in the target organization making a purchasing decision.
B2B relationships are two-way investments, both in terms of timeframe and money. Any relationship, and any participation in an incentive program, is going to have good communication and trust as its foundation. That communication has to let the customer clearly know what is involved in your incentive program; how they can qualify or sign up, what the various benefits are, and what they need to do to either maintain their place or progress to other tiers.
B2B sales are often more personal than B2C sales. Whereas you can easily use ai for sales in an ecommerce model, B2B sales more often employ a personal touch from your sales reps with more detailed communications.
Having a well-structured incentive program with attractive perks or sales incentives is one thing, but going one step beyond can make you stand out from your competitors. This can mean extra perks that are not part of your rewards program. These can include giveaways branded with your company name/logo which do not heavily impact your budget as you buy in bulk.
For your best customers, or when a customer makes a particularly large order, consider having little extras to say “thank you”. They could be your guests at a trade show or you can give them advance access to new planned features. If you have a new product in the pipeline, give them free trials to see if the product meets their needs.
You likely have great processes for onboarding new staff, but what about your new customers? Your sales team and support service may be similar to anything they have experienced before but what about that wonderful incentive program you have created? Having a clear and transparent process for what’s involved can be very attractive to new customers. It also helps to have tools that allow for the easy transfer of any relevant data.
There are various ways you can explain and focus on the different rewards and incentives that are available to them, and how being part of that program offers long term benefits as well as those short term perks. Create a simple email campaign that explains everything, have a live Q&A webinar that they can participate in and link them to an FAQ section that covers the most commonly asked questions about your program.
CSR (corporate social responsibility) is a major part of business today. Around 77% of customers are motivated to use companies that have some form of CSR commitment. Your CSR policies can demonstrate to customers that not only do you care about a particular subject but that this demonstrates an alignment with their own values.
Including some form of CSR donation as part of your incentive program will appeal to many customers, though it helps if you consult with them as to the destination of any donation. Choosing non-profits that fit with both your values and theirs can be a bonus. Of course, if your customer is a non-profit or charitable organization, then they can be the recipient of any aid.
You may have what you think is a hugely attractive incentive program, but if your competitors are offering more attractive incentives, then you may still lose out when it comes to market share. While some perks may be hidden, most companies will publish the details of their incentive program somewhere (usually on their website).
By monitoring what they offer, you can ensure that your program matches or surpasses it. While the primary focus of any customer will be on the products you provide, your pricing, and how good your customer service is, it may be the rewards and perks that clinches the all important deal when everything else is too close to call.
As with B2C, you are going to have some customers who have a significantly higher lifetime value (and average spend than others). These are the customers you not only want to retain but want to see referring other high spenders to your business. This is where ABM (account-based marketing) as part of your sales and incentive strategy can be of major benefit.
Not all customers are created equal, that’s a basic fact of business, and while you would offer the same great customer support and experience to all when it comes to incentives you should differentiate. In reality, that means higher tiers for those customers who spend the most and who impact your bottom line positively. Having these higher level tiers can also encourage customers in the tiers below to possibly increase their spending to reach that level.
Content remains king, no matter what sector you operate in. So, how can you create content that relates to your customers but also includes aspects of your incentive program? Writing content, such as blogs or case studies, about your customers using your products can be a win-win situation. You both get exposure, but you can also focus on what benefits they got from your incentive program too.
You can publish related content wherever it gives the best exposure. Blogs and case studies can go on your website (and you can link to them from your social media), and you can write guest blogs for your customer or create articles on platforms such as LinkedIn. It’s also worth asking your customer for testimonials that can be used on your site or on social media.
We’ve already highlighted good communication as being essential to establishing a new relationship but it is equally important to maintaining that relationship. Just because a business is buying from you regularly is no reason to neglect them; in fact, quite the opposite holds true. Just as you have to work on romantic relationships, so you should work hard to ensure that your business relationships remain strong and vibrant.
Check-in regularly with existing customers and members of your incentive program. Make sure they are happy with their incentives as well as any products and aftersales service. It also provides you with a great opportunity to get feedback on every aspect of your business from products to rewards. It also allows you to update them on new products or rewards or any changes to what you offer.
Internet traffic from mobile devices accounts for more than 50% of all traffic. If you offer any B2C services, then you are probably already optimized for mobile use. Some of your customers may see your incentive program as too complex or too difficult to track, so why not develop a mobile app that is simple to use and gives clear info on your program? It may even be worth seeing if you can integrate the app with other tools.
Many of the contacts in your customers’ businesses may spend significant time away from the office, so having a mobile app makes good sense when mobile devices will be their primary means of communication. Busy business people want the ease and convenience that come with tools such as a quick mobile phone dialler feature. And if you want more people to sign up for any incentive app, then offer them an incentive just for downloading the app.
B2B marketing can be far more complex than its B2C cousin. While you may share some common goals such as attracting new customers, improving your sales performance (through meeting set sales goals), and always providing a positive customer experience, you are dealing with higher value customers who often need more ‘persuasion’ in order to buy.
B2B customer loyalty programs need to be structured carefully to meet your needs as well as those of your customers. Having a referral program that offers tiered channel incentives means enablement to meet your goals. You also need to recognize the many different roles that B2B customers fill. They can be retailers, distributors, resellers, and so on.
Brand loyalty and brand awareness go hand in hand, at least if your brand constantly delivers when it comes to quality, pricing, and support. When you have business partners that know and trust you, then you will see better channel sales. B2B businesses need to offer incentives and loyalty rewards that are attractive to all their customers.
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