How to manage a successful B2B loyalty program in 2020
Acquiring customers is anywhere between five to twenty-five times more expensive than retaining an existing one. (Harvard Business Review)
B2B Loyalty programs are an effective way to get your channel partners to sell more. It is also a great way to encourage retention. Keeping an eye on your churn and partner retention is important. Channel partners need to feel valued and recognized to continue to want to work with you. B2B reward programs are a must for every organization that wants to create a scalable and profitable way to generate more revenue.
If you’re currently looking into developing a rewards program, or if you’d like to optimize your existing one, here are some best practices that you should follow.
1. Conduct a gap analysis on your current B2B loyalty program.
It is important to constantly review your loyalty program strategy and assess if it is still effective. Conducting a gap analysis will help make your processes more efficient.
Your loyalty program should support your business goals overall and help improve channel partner retention.
Here are some items to help you get started:
Are you using the right technology for your loyalty program or are there still a lot of manual processes?
Review the user experience of your B2B loyalty program. Are partners able to register and participate without problems?
Are partners actively engaged in your program? Are they referring others to join?
What percentage of your eligible partners are participating in the program? How can you incentivize those that aren’t a part of the program to join?
Is your loyalty program still supporting your business objectives and priorities?
Is the program aligned with your sales and marketing goals?
How much revenue is your current loyalty program bringing to the table? Can this be further optimized?
Understanding the metrics and impact of your existing B2B rewards program will allow you to optimize your program and your customer experience.
2. Make sure you target the right audience
In a B2B context, you often have several stakeholders from a single company as customers. You are often engaging with many individuals from a larger group. Each person will have a different role and a different objective within the company, so it is highly important to target the right person with your program and make sure they align with your ideal user personas. Understanding the needs of your identified targets will allow you to develop an effective rewards program.
3. 70% of companies report that better-targeted customer communication is important.
As mentioned, each stakeholder will have different needs and wants.
To have an effective loyalty program, it is vital to adapt your program and reward mix to match your goals and objectives.
For example, a purchaser would be interested in saving costs, so you might want to develop a loyalty program with discounts or credits.
4. Align your incentives with the role of your product
Channel incentive programs encourage partners like resellers, distributors, or contractors to sell more of your products or services in exchange for a reward. In this context, it is important to understand which products play a bigger role in the success of your channel partners.
If you create incentives towards products that do not move the needle for their business, the program will not be as effective.
5. Make your rewards attainable but challenging
It is important to motivate your partners to sell through channel incentive programs. However, if your goals are too high and unattainable, your partners will also lose motivation. Try to achieve a good balance between attainable and challenging so that it will make sense for both your business and your partners.
6. Utilize Non-monetary Awards
Rewards connected to SPIFFs (Sales Performance Incentive Funding Formulas), don’t need to be monetary. You can provide a mix of popular reward types like experiences, merchandise, and so on. They are meant to motivate your channel partners and will allow you to stand out against other suppliers who do not incentivize their channel partners. They should be designed to support your overall sales goals.
7. Implement these 5 strategies in your B2B loyalty program
Some effective strategies include:
Encourage partners to purchase more within a specific timeframe by offering transaction-based discounts.
Use tiered incentives to increase motivation and recognize high performers. Just make sure that higher-tiered rewards also match the effort and sales of higher-tiered partners.
Referral programs are one of the most effective ways to generate trustworthy new business. Provide welcome packages for newly referred partners.
Deepen relationships through in-person events that give you much-needed facetime with your partners.
Creating co-marketing campaigns with your partners is a cost-effective and collaborative way to reach a shared goal. This will also allow you to develop long-term relationships with your channel partners.
8. Don’t overcomplicate the mechanics of your incentive programs
The last thing you’d want to do is to make things unnecessarily difficult for your partners.
Make sure that your incentive programs are easy to understand, remember, and implement. Don’t add too many rules or conditions.
9. 89% of millennials use a search engine before making a call to customer service
Nowadays, everyone wants their concerns to be addressed instantly.
Creating comprehensive knowledge bases will allow you to support your partners. It will allow your partners to solve their issues without having to call customer service, wait, and explain their situation. It will also help them use your rewards program more effectively. This will also allow your team to focus on more difficult issues.
10. Adapt quickly through agile project management
Creating an entire loyalty program can be overwhelming especially when you have multiple employees working on the project.
Agile project management allows you to break the project down into achievable and incremental sprints for each member of the team.
It also encourages you to test elements of your program rapidly and adapt accordingly when there are errors or optimizations to be made.
11. Promote your loyalty program!
After all that hard work, don’t forget to inform your partners about your loyalty program. Try to communicate as effectively and succinctly as you can. Use visuals to encourage your partners to join. Create a newsletter and keep your partners up to date on the newest rewards that they can receive.
Use digital programs to supplement your loyalty program
A well-executed channel incentives program is an effective way for your business to retain customers. We’ve worked with our clients to create custom B2B rewards programs that keep their channel partners motivated and engaged.
Definitions
What is a B2B loyalty program?
A B2B loyalty program rewards channel partners, distributors, and contractors when they sell more of your products. Incentives can take either a monetary or non-monetary form.
What is a buyer persona?
Buyer personas represent an individual person or a team of decision-makers who decide whether to purchase your product or not.
What is a user persona?
A user persona is someone who uses your product or service. They typically care about the ease of use and quality of the product itself.
What does agile methodology mean?
Agile methodology is a project management process that breaks projects down into incremental sections called “sprints.” It also defines clear cross-functional responsibilities for each project member and team to execute.
