Why SMEs Should Be Utilising B2B Loyalty Programmes
Conceptually, a customer loyalty programme is pretty straightforward to comprehend. At its simplest level, a customer earns rewards from repeated business in the form of points, discounts or free items and the businesses increase sales. It’s a basic but very powerful strategy.
In the UK business to consumer (B2C) sector for instance, Tesco was one of the market leaders behind encouraging customer loyalty with the introduction of its ‘Clubcard’ to say thank you to its customers for their continued loyalty. Now the majority of B2C companies have introduced successful loyalty schemes whether that’s through a points system like Nectar, Boots Advantage Points, M&S Sparks or a simple paper based card that can be stamped every time you buy a coffee from a certain venue. This is because business owners know that engaged customers are the ones who are more likely to be loyal to a brand. In fact, consumer loyalty programmes are said to increase overall revenue by 5-10% with 87% of consumers saying they want loyalty programmes.
The growth and success of B2C loyalty programmes is one the business to business (B2B) sector can learn from. In 2016, 68% of B2B executives reported that their customers were less loyal than they used to be (Bain) and only 29% of B2B customers were fully engaged (Gallup). It’s clear that significant gains can be made. The figures speak for themselves, B2B customers with high customer engagement scores achieve 50% higher revenue/sales, 34% higher profitability and 55% higher share of wallet (Gallup). In fact, the B2B SME sector is at an advantage to the big business sector: the smaller the company, the more it will look and act like a consumer.
Whether the goal is to continually increase sales or to jumpstart sluggish revenue, loyalty programmes have become a staple for many large businesses. But what about SMEs? Manta’s and BIA/Kelsey’s joint report “Achieving Big Customer Loyalty in a Small Business World” reveals that for SMEs who already have a loyalty programme in place, 64% of them report it’s been effective, meaning it makes more money than it costs to maintain it. It’s important for SME owners to keep in mind that customer loyalty isn’t just for big businesses – a well-designed programme can help enrich the customer experience with the aim of building long-term relationships. B2B SMEs actually have an advantage, because they generally have a smaller base of customers and usually know a lot more about them.
Here’s why B2B loyalty programmes matter to SMEs:
A repeat customer gives and gives.
Having a B2B loyalty programme could help you increase repeat customers, which, in turn could boost your business’s revenue. Based on the same Manta and BIA/Kelsey report, a repeat customer spends 67% more on a given purchase than a new customer does. They should be rewarded for this action, as retaining customers is less costly than acquiring new ones – only 5% increase in customer retention can increase a company’s profitability by 75% (Bain).
By providing loyalty programmes for current customers, SME owners are not only saying thank you but are also motivating them to continue to be their brand ambassadors. With word of mouth being the primary factor behind 20-50% of all purchasing decisions they can easily spread the word about a business to their professional, personal and social networks, helping SME owners increase their customer base even more.
Rise above the competition.
It can be difficult for a SME to compete with a large brand considering that most large brands have more locations, resources, marketing spend and the ability to offer lower prices. However, a good B2B loyalty programme is an easy way for SMEs to show their personal side and remain competitive in spaces dominated by big business.
For example, in the B2C sector, many consumers may not love the coffee at a big brand coffee chain but do love the fact they can earn points through their purchases and save money in the long run. However, its simple and cost effective for a small coffee shop owner with quality coffee to do the same.
B2B customer loyalty doesn’t need to cost a fortune.
Customer loyalty programmes don’t have to drain an SMEs’ budget. While some large companies haemorrhage millions of pounds into loyalty programmes, in today’s mobile era, cost-effective digital rewards programmes are just as successful as the ones put in place by bigger players.
Your business can easily achieve promising results for very little effort and only spend when your business has felt the benefit of your marketing campaign
How does a business achieve this?
The Prosper² Rewards Programme, is points based like the popular and lucrative B2C programmes. However, instead of simply providing a system that accumulates points for redemption in the form of vouchers, discounts and other subsidiary products, the revolutionary difference is that the Prosper² Rewards Card is a prepaid MasterCard on which points can be transferred or loaded as pounds – spending as, when and where desired. By monetising it Prosper² Rewards delivers greater customer value, enhanced engagement and improved customer intelligence.
Your business can have access to the Prosper² Rewards programme to use as your own rewards programme simply by a monthly membership subscription. In addition, Prosper² Members can access a wealth of specialist business services and Club benefits, through the cost effective monthly subscription which starts from as little as £100 per month.
With this approach, a loyalty programme for your business is not just for big brand name players within the B2C sector. If you’re a B2B SME looking to increase sales, boost profitability, stand out in your market place and develop stronger relationships with your customers and do it all in a cost-effective manner then Prosper² Rewards is the loyalty programme solution you’ve been looking for.