Providing products or services to other businesses can be very rewarding and exciting. On the other hand, for less prepared and experienced owners, it can cause many dilemmas. A Gallup analysis of more than 100,000 respondents found that B2B companies tend to focus more on price and product than the end-users who will benefit from their offerings. This attitude puts B2B companies at risk of losing up to two-thirds of their customer base.
The same study also found that 71% of B2B customers aren't emotionally or mentally attached to the companies they do business with and are willing to switch suppliers at the drop of a hat. Well, no one said that building relationships would be an easy task. So if you run a company, of any size or type, you need something to stand out and retain your hard-won contracts.
Explore this one-stop guide to B2B loyalty and learn how to launch your own B2B loyalty program in order to become more approachable and grow your market share. Finally, discover the must-have elements of a dedicated B2B loyalty mobile app that will grow your brand’s bonds with its users.
What is a B2B loyalty program?
To make this guide comprehensive, let's start with the basics and define a B2B loyalty program. A B2B loyalty program is a business-dedicated solution consisting of a set of features and logical infrastructure that are usually focused on four main areas:
- customer loyalty
- customer retention
- customer acquisition
- churn prevention
B2B loyalty programs are created to grab the attention of targeted companies with attractive incentives and then increase brand advocacy and brand loyalty.
What are some challenges in B2B sales?
To better illustrate the challenges of B2B sales to you, I'll use the most typical B2B relationship — that between a manufacturer and a reseller. Now that I've rounded it out, let us move on.
Building lasting and direct partnerships between companies can be complex because they aren't alone in a competitive marketplace. All players are subject to the same market mechanisms that challenge them and affect sales.
On top of that, selling products or services in any industry is an elaborate process that involves additional parties. For example, in a manufacturer-reseller relationship, there can be wholesalers in the middle of the transaction chain that impede sales targets.
Before you kick off your loyalty program for B2B customers and make your first sale, you need to conduct market research to find out how everything works. I've outlined a high-level breakdown of the three key challenges in B2B so that you can get a general idea.
1. Precise and long-term planning
Process planning is a broad field that includes production, supply chain management and logistics, inventory management, team management, you name it. If this is your bread-and-butter, then you know how much time and effort it takes to achieve the end goal of selling goods and making profit.
Even the most successful business owners don't always know how to manage the planning in order to release exactly the amount of products required to satisfy demand and optimize costs that way. This is tricky, but a loyalty program can make it much easier to manage supply and keep fluctuations more predictable. Above all, a loyalty program gives you insight into those devoted customers who regularly buy from you, as well as the chance to plan better and drive more sales.
Imagine you're a nail manufacturer and you find out that a reseller wants to buy 1,000 units from you. First, they select a nail model they're interested in and proceed to checkout. Then, the reseller uses your B2B loyalty app to enter their unique customer code and log the transaction to earn extra points. If they record this activity in your loyalty program each time, you'll quickly notice that this reseller visits you every month for the same purpose — to buy 1,000 nails.
With a loyalty application, you can analyze existing clients' behavior in terms of quality, quantity, frequency, and location of purchases. This rock-solid and valuable customer data forms the basis for:
- estimating overall production and maintenance
- tracking current or future purchases
- monitoring purchasing volumes
- delivering products/services to designated branches
- predicting sales and distribution markets
- tracking customers' buying processes
Data makes all of your moves legitimate and takes the guesswork out of running your business. In addition, returning clients are perfect material for long-term contracts, which are the backbone of the B2B market. Also, if your loyalty program offers attractive rewards and is heading in the right direction, you'll be able to attract new customers through referrals from established partners.
2. Longer and complex buying cycles
The B2B buying cycle is all about nurturing, building trust, and creating long-term relationships. And that takes time. One study found that ~75% of B2B sales to new customers take at least four months to close. The sales process usually includes tense negotiations with multiple decision-makers and stakeholders. That is why you don't want to come across as pushy, especially in mature and competitive markets. Instead, patiently groom business relationships and give your customers all the time they need to study your offer.
Even if a customer has a "pending" status in your sales funnel for the next few months, you must always be ready. Once you've closed a deal, it's time to give it your all to meet expectations.
Map the journey with your expert team to better understand the behaviors, needs, and pain points of B2B customers. Address five main stages: Awareness, Consideration, Conversion, Loyalty, and Advocacy. Fully focus on refining them into your business model.
3. Keeping a watchful eye on the competition
The truth is that your competitors are following your every move. I don't say this to intimidate you or create doubt, but to remind you to always be mindful of your position in the marketplace.
So, the first major challenge in a competitive environment is the ability to adjust product/service prices at any time. There's no telling that this is such a predictable change that your competitors can make in order to become more desirable. With this in mind, do you think customers will always choose a less expensive option if the quality of your products are the same? Not necessarily, but only if you have a reasonable B2B loyalty program in place.
In the case of a price battle, a loyalty program gives you an extra edge that isn't directly apparent with your competitors. A loyalty system affects the churn rate because it offers customers added value with every transaction. The non-financial benefits of a B2B loyalty system can successfully support customer retention and your sales performance.
Another challenge is the rise of new competitors with promising products and effective services. Despite this, loyalty solutions can be habit-forming and effectively protect you from losing customers.
Valuable loyalty program rewards encourage customers to stick with you. They know that if they use your offer then they can receive, say, 2,000 points that are redeemable for exclusive access to services or digital gift cards. Your competitors can't promise them such rewards at first, right? In addition, a loyalty program gives you the time to revise your line-up. You can make it more marketable and, in turn, reduce fluctuations in your loyal customer base.
Bear in mind that there are many more challenges related to B2B sales. As a business owner, you may also face issues such as:
- No direct contact with resellers as they can rely on wholesalers - you may have no control over what they choose and buy from you, provided that they actually go for your brand of course.
- Risk of losing resellers to other product/service providers.
- Limited influence on products promoted by wholesalers, so your products won't be the first choice.
- No influence on the size of your resellers' shopping cart.
- No influence over how often and where resellers purchase.
- No ability to inform resellers directly about news - you can't keep them in the loop about promotional videos, manuals, brochures, folders, certificates, dedicated training, or special deals.
Hopefully, some of these challenges seem familiar and you already have strategies in place on how to avoid them.
What are some challenges when building a B2B loyalty program?
Building loyalty is always about the relationship between entities. Your future B2B partners need to know that you're trustworthy. So, not only should your offer be eye-catching, but the way you act should also reflect your professional approach. The list of challenges when building a loyalty program for B2B customers is quite extensive, so I'll outline the most common ones that you can start considering as you read on.
1. Manage prices wisely
Your product or service offerings to B2B customers need to be marketable and shouldn't deviate too much from the prices offered by your competitors. Once you've decided on a loyalty program, all your product or service prices should already be set. This is especially important, since companies often have a strange urge to compensate for implementing a loyalty system. It also happens that business owners bump up prices because their loyalty program guarantees participants extra rewards. These are simply dangerous and unfair plays.
Let's face it, a loyalty platform is a cost to your business but an expense that will pay for itself quickly. After all, its goal is to motivate customers to keep buying and stay loyal to your brand. So, don't dump the cost of creating and maintaining a loyalty system on your customers. It's a long-term investment, the costs of which must be entirely incurred on your side.
Instead of thinking about payback, focus on how to make your B2B partners happy. Show that your offer is the best it can be, become irreplaceable, and deliver a fabulous experience at every touchpoint.
2. Don't rest on your laurels
Imagine you're a manufacturer of rubber aprons for the chemical industry, and you think they couldn't be better — you've done the research and initial testing on a small sample, and you're very proud of your product. You decide to show the aprons to the public who, instead of appreciating your work, reject them.
Frustrated, you launch a special campaign in your loyalty program offering three times as many points for purchasing your groundbreaking products. But still, nothing changes, and your B2B partners aren't interested in your offer.
A loyalty platform isn't a panacea for unsuccessful products or services. Its purpose is to provide a competitive advantage and add value to every purchase. So, when things don't go your way, don't focus on promising extra points and fabulous rewards. Instead, improve your solution based on data and customer feedback so that the market will eventually embrace it.
3. Make responsible growth decisions
Let's say that you're a business owner and you want to start a loyalty program. How do you calculate its cost? If you're going to build a loyalty program from scratch, the price could be overwhelming. You can also opt for an end-to-end loyalty platform based on ready-made components, such as Open loyalty. This is a super convenient solution because all you have to do is define your needs and goals, then an Open loyalty expert will prepare a dedicated quote for you.
Next, you need to hire someone to monitor the campaigns and manage the loyalty system. Suppose you've already found such an experienced professional and they're ready to act.
Now it's time for incentives. The cost of prizes isn't a fixed cost to the company, but a variable one. In short, the more you sell, the more money you have to spend on maintenance of the loyalty program and its rewards, which are included in the company's variable costs.
So, how many rewards do you plan to offer, and how much will they cost? You'll never be able to calculate this while your loyalty program is running. This is mainly because it's impossible to predict how many customers will join the program and collect points that are redeemed for rewards. Yep, you got it right — throughout the lifespan of the loyalty system, you won't be able to estimate how many rewards you'll need. And that's a risk you're taking.
4. Build your know-how
Another challenge when implementing a loyalty program is having a lack of know-how. Often, it's a shortage of qualified specialists or the lack of a structured database that you can use, such as a database of current B2B partners or prospects interested in your offer.
But let's focus on people, since they're responsible for the overall success of a B2B loyalty system. Involve a loyalty manager early on in the conception phase of your loyalty program. Let them proactively participate in the creation process so they'll be better educated and make fewer mistakes.
However, if your loyalty platform isn't working as it should despite your best efforts, you can always enlist the help of an Open Loyalty expert. They can step in, diagnose your program, suggest changes to its structure, and provide onboarding for your revamped loyalty program.
How to implement a B2B loyalty program?
There are various types of loyalty programs for B2B customers that address industry-specific needs. Once you know yours, you can jump into action and plan your B2B loyalty app with all of its features.
Without further ado, let's go over the types of B2B loyalty programs. Then, move seamlessly into loyalty program best practices and app elements that will help you skyrocket your sales.
The types of B2B customer loyalty programs
When deciding on a loyalty system, first consider how you operate daily, who you work with, and what to expect in the long run. Ultimately, I believe you'll choose one of the four most common B2B customer loyalty programs.
This is a standard referral program often used in banking, for example. The idea behind the program is that participants recommend your products or services to their partners, customers, or other subcontractors. In exchange for referring another individual of a certain income, size, or need, the participant receives benefits from your rewards system.
A program mainly used by listed companies to improve their retention of investors. In short, if an investor buys shares of a particular company, they are guaranteed unique benefits related to the company they're investing in.
It's a program based on bringing two or more independent and non-competitive companies together in partnerships to increase their influence in the marketplace. They begin to share a customer base, points collected by program participants, and often the entire logistics of a loyalty system.
Partner Rewards Program
This program links companies together to provide a one-stop shopping experience for end-users. For example, if you're a ceramic tile manufacturer and your partner is a tile adhesive manufacturer, you can promote and redirect one another's customers with exclusive offers or discounts. The bottom line is that your solutions should be complementary. This way, customers will meet their goals more efficiently and affordably while you and your partner will generate revenue. Another type is simply redemption partners for larger loyalty schemes.
Since you now know the types of B2B loyalty models, it's time to discuss their application and the essential elements for making your loyalty system work like a charm.
Best practices for creating a sales-driving B2B loyalty app
Google revealed that 53% of shopping app users prefer to use an app to retrieve their account and loyalty card information rather than a mobile site. In other words, loyalty apps are on the rise in popularity. Business-to-business (B2B) apps are relatively analogous to business-to-consumer (B2C) ones. Still, they have some characteristics that you need to consider if you want to build customer loyalty in B2B and fuel sales.
Simple reward system
You're creating your loyalty program for busy bees, so bear that in mind when setting up the rules. No one wants to spend hours reading complicated rules and figuring out your app. Keep it simple or your participants will walk away.
First, confirm that only verified businesses can create an account in your customer loyalty platform and earn points. Also, allow one or more authorized employees to collect rewards on behalf of the company.
Apply a simple and tiered rewards system. Make sure that earning the first points is effortless, and that rewards are within reach. This will keep participants eager for more.
Adapt your loyalty application to the environment people live in, full of communication noise and business. Go for a simple and user-friendly interface and straightforward communication that the average person can understand.
When creating the app, imagine a hardworking person who may be permanently or temporarily disabled. If necessary, simplify the application by making the loyalty system less enticing. Sometimes this is the right thing to do — don't be afraid to make tough business decisions.
Attractive incentive offer
Provide compelling rewards that are worth engaging and which boost customer satisfaction. Steadily fine-tune your incentive offer to your customer's industry, psychographics, or demographics. For B2B participants, rewards can include:
- product or service discounts
- store credits and cash rewards
- discounts and special deals
- product upgrades
- exclusive or early access
- personal support and onboarding
- digital gift cards
- company swag and promotional products
- free ebooks or books
- conference invitations
- workshops with industry experts
Also, you can use a game engine to make your program as immersive as possible. For example, you can focus on the percentage increment of purchases per month rather than the total number of sales.
To explain this better, suppose you sell bottled orange juice. You can implement a gamification mechanism whereby the reseller must buy an additional crate of juice on each new visit to earn points. Then it's your job to verify the monthly percentage increment, create a ranking, and fairly reward all participants. Obviously, companies that make large juice purchases the first time around will have a harder time earning points. But it all depends on the customer profiles you're targeting.
To sum up, your loyalty system must be engaging and fair to everyone. Make sure that participating companies don't have access to others’ personal information but they can keep track of one another's rankings or point totals, and this way compete for better scores and rewards.
Automated activity-based rewards
To keep your B2B loyalty program participants highly active, be sure to reward them in real time. Automated bonuses for even the slightest activity encourage customers to engage more. Recognize existing participants in short intervals. For example, give them access to periodic rewards or the opportunity to earn extra points for taking surveys or sharing contact information.
Separate transaction confirmations
There are several important legal issues associated with loyalty platforms. First and foremost, B2B loyalty programs involve the free transfer of a particular value to other companies. They must prove that this additional purchase element, such as points or rewards, is included in the product margin.
Reflect on how to incorporate additional "loyalty value" into the overall value of the product. In a loyalty program for B2B customers, transactions typically end with:
- proof of purchase (receipt or invoice)
- confirmation of earning loyalty points
Make sure that both of these transactions are documented separately. This will make it much easier for companies to settle accounts with the accounting department. Additionally, you can create a dedicated section in your B2B application where employees can download two independent documents or forward them to a designated email address.
Helpful educational and informational resources
The educational component is critical, as it allows resellers to improve their competencies and learn about your offerings. In your B2B application, you should include elements, such as:
- product/service feedback surveys
- referral mechanisms
- gamification-based rankings that reward the most active users
Use the app to educate program participants and tie them to your brand. Add smart side features to share knowledge and guide people around your products/services. Promote smart training sessions, for example on using your products, that provide extra loyalty points. This way, you can easily reduce your competitors' chances of taking over your existing customers. Well, they've already invested the time and energy to get to know you better and they've done it all conveniently in one place — your app.
When setting up a loyalty program or B2B promotional campaign, be sure to maintain a high level of security. Contact your cybersecurity experts and legal team to find out how fraud-proof your solution is.
Creativity is desirable when creating a B2B customer loyalty system. But - in my experience - the less complicated it is, the more effective it will be. Above all, keep it simple and provide tangible benefits to your participants. The rest will follow.
5 inspiring examples of successful B2B loyalty programs?
1. Adey ProClub Installers loyalty club
ADEY is a UK-based company that designs, manufactures, and supplies innovative products and services that improve the efficiency of domestic and industrial heating and cooling systems. Among the company's services are advanced water testing services for local authorities, housing associations, utility companies, contractors, and professional installers.
In addition to offering innovative products and services, ADEY also develops relationships with its installers by running a dedicated B2B loyalty program.
As a member of the ADEY ProClub, installers are able to register a warranty for every ADEY filter they install for customers. The system automatically reminds when it's time for an annual service. For every MagnaClean Professional2® and Micro2® registered in the ADEY ProClub, the installers are rewarded with loyalty points. The points can be then exchanged for Love2Shop vouchers or ADEY merchandise. An Installer can earn points for registering, and receive a 20% discount on manufacturers' spares by joining the club.
The core of the program is the easy-to-use ADEY ProClub App designed to serve as a one-stop-shop for water treatment servicing and installations. The mobile loyalty application offers a set of useful benefits beyond earning points and redeeming rewards.
With ADEY’s app, installers get access to 3 useful features:
- Monitor Professional3 Sense filters remotely - register and connect MagnaClean Professional 3 Sense filters by using Adey's app before installation. Thanks to the APP you can easily monitor the Magnetite capture of connected filters.
- Job record dashboard - track the record of jobs you complete and products you use. The list can be referred to and downloaded.
- Tools for the job - access to the ADEY resource hub with videos, literature, and a Product Selector to help you quickly identify the ADEY products like filters and chemicals to specify for each job.
2. Vaillant Advance loyalty program
Vaillant, one of Europe’s leading heating technology manufacturers, operates in over 20 countries and exports to more than 60 states. The company provides customers with easy to operate solutions for heating, cooling, and hot water.
To increase sales and engagement of its installer partners, the company introduced its B2B loyalty program, Vaillant Advance. Vaillant's loyalty program provides installers with a wide range of products, technical and support resources, and tools to help them succeed in business. Advance members are entitled to extended guarantees on eligible products when registered. Each member will also be able to contact their nearest Vaillant area sales manager for support when needed.
Members of the Vaillant Advance loyalty program can earn rewards in the form of cashback or reward credits. The main way of earning rewards is by registering qualifying products. Beside this, credits can be earned by interacting with Vaillant in a number of ways including positive interaction with Vaillant via social media, participating in training courses, attending Vaillant events, and many other ways as communicated by Vaillant from time to time.
Credits can be used to purchase items listed in the Programme Credit catalog, which is amended every so often. Vaillant offers various rewards including gifts, Vaillant merchandise, and vouchers. In order to claim a reward, a member must have sufficient credits to cover the credit value in the credit catalog.
There are also special promotions available to installers through the loyalty program. Current promotions include £100 cashback on your first ecoTEC Exclusive or ecoTEC Plus registration. In order to access these promotions, users must register with the code WELCOME20.
Installers that joined the Vaillant loyalty program can access all of its perks via a dedicated mobile app available for iOS and Android.
Through the app, installers can earn cash and credits that can be redeemed for program rewards, as well as extended warranty options available only to Advance members. The Vaillant loyalty program applications offer features to cut time-wasting admin and make installers’ jobs a bit easier:
- Thanks to a digital record of the relationship with a client, installers can speed up their work by adding warranties, accessing benchmark documents, and receiving Gas Safe notifications.
- With the knowledge hub, members of the program can read the latest news from Vaillant, keep up to date with the latest product knowledge, and receive important company and partner notifications.
What’s unique about the Advance loyalty program is that it actually helps installers raise their profile amongst potential leads via the Vaillant Find an Installer service. Additionally, calendar and service reminder tools ensure the partners who work with Vaillant never lose touch with their customers.
3. Clipsal Club, Australia's largest community of electricians
Clipsal is an Australian manufacturer of electronics accessories and a market leader in data communications, industrial, lighting, energy efficiency, and automation. The company's mission is to help Australians make their homes safer and more comfortable. Since 2004, Clipsal Australia has been a subsidiary of Schneider Electrics.
Club Clipsal is a great example of a coalition loyalty program that connects the community of professional electricians in Australia.
The Club Clipsal application, iCat, offers seamless access to loyalty program rewards and benefits for iOS and Android users.
Club Clipsal is made exclusively for electricians. To start earning points on all Clipsal purchases, users have to sign up via a dedicated website. To make it easier, Clipsal provides a detailed guide on how to join and use its loyalty program and mobile application.
Clipsal’s loyalty program has four membership tiers: Crew, Expert, Elite, and Master. By earning points within the program, you can move up tiers and unlock exclusive industry tools and training, mentorships, and rewards. By moving up to higher tiers, members also get access to a Toyota Fleet discount.
The core feature of Club Clipsal is earning rewards points and the reward catalog. Points are awarded for every dollar spent on Clipsal’s products. The ratio for earning points differs depending on the tier, e.g. Crew members earn 1 point for every $1 spent while Masters get 2 points. Members automatically earn points every time they purchase Clipsal products at their nominated wholesaler.
The iCat mobile application is a powerful platform for the Clipsal B2B loyalty program, loaded with useful features such as:
- search or browse Clipsal products
- connect to wholesalers and view custom pricing and availability
- access wholesale accounts
- find the nearest distributor or display center
- attend business optimizations webinars
- join a network group
4. IBM VIP Rewards
International Business Machines Corporation, an American multinational technology corporation operates in over 171 countries. IBM produces and sells computer hardware, middleware, and software for customers worldwide. It’s one of the biggest technology companies in the world with a track record of successful products over the last 110 years.
IBM VIP Rewards is one of the biggest B2B loyalty programs in the world. The program works as an online advocate engagement platform that allows IBM to recognize and engage its most active partners (called Advocates). The program was designed with two goals in mind:
- To appreciate partners and resellers for engagement in sales and brand education.
- To encourage IBM clients and partners to share and improve their knowledge about company solutions and products.
The IBM VIP Rewards program uses gamification tools to increase members’ engagement. Users earn points for challenges and climb leaderboards. Earned points can be redeemed for rewards such as gift cards and meetings with IBM experts.
Members of the IBM Rewards program can also earn points by asking and answering questions for products in the IBM Support Forums. Members can earn points by interacting on the IBM forums in three ways: asking questions, answering questions, or marking someone else’s answer to a question about a qualified product as accepted.
At this time, physical rewards and gift cards are only available to advocates located in the United States of America. Advocates outside the US can still climb the leaderboards, earn rewards, and redeem them for other types of non-physical perks including time with product specialists or an expert team consultation. A full list of rewards is available in the IBM VIP Rewards Hub.
A full list of rewards is available through the merchandise catalog, which can be accessed through the IBM VIP Rewards Hub for members with 1,000 rewards points or more.
5. Uber Pro, driver-partner program
Uber is an American mobility as a service company based in San Francisco. It operates in 72 countries and approximately 10,500 cities. Today, around 93 million customers use the Uber platform and the company has processed over $26.61 billion worth of bookings. It offers a wide range of services including ride-hailing, food and package delivery, electric bicycles, and scooters. Uber’s mission is to become a fully electric, zero-emission platform by 2040.
Uber launched its Uber Pro loyalty program to increase and reward drivers' commitment and effort. By driving with Uber, drivers earn points and unlock status tiers. The higher the tier, the more rewards they gain access to.
The Uber Pro loyalty program was designed to reward drivers who deliver the highest quality service on a daily basis. Uber drivers earn points during fixed 3-months periods. Every driver can earn 1 point for each trip during off-peak hours and 5 points for each trip during peak hours. Program points reset after each period.
Program rewards depend on status tiers. By earning points, users move up tiers and unlock new rewards. Different status tiers provide access to different rewards. From fuel discounts and free Foodary Express coffee, through seeing trip duration and direction before accepting a job, to priority airport rematches at selected airports.
Drivers need to reach a specific number of points and ratings from their passengers to be promoted to higher tiers:
- Blue - starting tier
- Gold - minimum 1,000 points with a 3% cancellation rate and 4.7 driving rating
- Platinum - from 1,800 points with a 3% cancellation rate and 4.7 driving rating
- Diamond - above 2,800 points with a 3% cancellation rate and 4.7 driving rating
The Uber Pro driver application is a core platform for drivers. Not only does it give access to rewards, points, and information from Uber, but it is also a central point of their work. The most important features are: a map with alerts and notifications about ride requests, tracking earnings, and a tool for scheduling the working day.
How to launch a B2B loyalty app in no time?
Perhaps you already know that you need a loyalty program badly. You can get started much faster than your competitors by launching your B2B loyalty system in a few weeks with pre-built accelerator projects. Let me walk you through useful loyalty app features that you can have on the spot:
- Participants can earn points in the app for scanning codes on packages or manually reporting purchases.
- Participants can earn points for purchases as part of ever-changing loyalty campaigns. Campaigns may vary depending on the type of reseller and their past purchase history.
- Participants can be notified of new promotions via SMS, email, or push notifications.
- Participants can redeem accumulated and confirmed points for attractive prizes.
- In addition to rewards for collaboration and product sales, participants can hone their skills through advanced training and courses.
This is just an example to emphasize that your loyalty program can be fully customized to your needs and loyalty trends.
From a strategic standpoint, a well-implemented reseller loyalty program can help you build customer loyalty in B2B and boost sales. A bespoke B2B loyalty app can become a powerful and cost-effective space to communicate with customers and learn about your market, products or services, and business partners.