B2B vs B2C Loyalty Programmes – Differences and Similarities
We’re all familiar with the concept behind a B2C loyalty programme. Air Miles, Nectar Points, Boots Advantage Points – there are many famous versions of the central idea that spending more money at particular outlets leads to the accumulation of loyalty points which we can use for future spending.
But what about B2B loyalty programmes? Are they fundamentally different from their B2C cousins somehow? If so, how are they different? Or is there some common ground between these 2 types of loyalty programme?
In our opinion, there are more similarities than differences.
We also believe that B2B loyalty programmes are an extremely valuable method for firms to be able to benefit from the concept of loyalty. Companies that sell their products and services primarily to businesses have just as much to gain as those companies that sell primarily to individuals. (An opinion backed up by the marketing insights organisation, Forrester Research).
Let’s look into things in more detail.
B2C Loyalty Schemes
– We’ll start with the basic ‘single store’ scheme.
Pretty easy concept, this.
Buy stuff from company X and receive ‘points’ towards future purchases you make with them. These points are then redeemable against future purchases from the same company.
The more money you spend with the company, the more points you are given into your account, with occasional ‘extra points’ offers helping to boost the total amount of points you have available.
A prime example of this type of scheme is the Boots Advantage card. Boots Advantage points are each worth a penny, with 4 points being awarded for every pound you spend at Boots. So once you’ve spent £25, you’ll have the equivalent of £1 available to spend on your card, effectively giving you a 4% discount on future purchases.
– There are also ‘multiple store’ schemes on offer.
These allow you to spend money at various different outlets, with the points you accumulate being redeemable against future purchases at any of the different outlets that participate in the scheme.
A well-known example of this type of programme would be Nectar points, where you gain points on your Nectar card account for every purchase made through companies including Sainsbury’s, Argos, Pizza Express and many others.
The Nectar scheme also allows for purchases in non-retail environments, with EasyJet flights being one of the ways you can spend your Nectar points.
This leads us on to the most famous of them all:
– Air Miles
In reality, there are multiple versions of this scheme, which is correctly called a “Frequent Flyer Programme”. Originating in the USA in the 1970s, the frequent flyer rewards system was based on rewarding airline passengers who chose a specific airline for their regular flights.
The concept took off around the world, with the UK version of “Air Miles” being launched in the late 1980s (subsequently rebranded as Avios in 2011).
Over the years, air miles rewards programmes have developed into a different type of scheme than the original frequent flyer idea, with air miles points now being able to be used against non-flights purchases in the same manner as for the Nectar scheme outlined above.
– We can see that the fundamental concept behind each of these various loyalty schemes is to try and keep customers happy. This is done by rewarding them for using a particular company or group of companies.
So how does this idea play out in the B2B environment?
B2B Loyalty Programmes
While there are systems such as Amazon Incentives and various airline-based corporate schemes, Prosper² Rewards® is the market leader in the UK, so we’ll use that as our example of a B2B loyalty programme.
In essence, the idea is that the more money a business spends with the companies that are involved in the programme, the more Prosper² Points they accumulate. This allows the firm that’s built up their points to allocate those points against future spending with the companies participating in the programme.
So if you wish to, you can use Prosper² Rewards® in the same way as you might use your Nectar card, building up points with one firm then spending them with another firm.
In our experience, however, the way that most people use the programme is as a discount on future purchases with the same firm from whom they originally gained the points. This is particularly useful for the firm that dishes out the points, as it helps lead to future business.
So, for example, if you’re a building maintenance firm that does a lot of work for one particular company, you can give them points back on their Prosper² Rewards Card which they can use to offset some of the cost of future work you carry out for them.
– See this blog post on increasing customer loyalty for more on why this can be a great idea for retaining clients on an ongoing basis.
As well as being able to spend the points with other firms, of course, the Prosper² Rewards Card allows you to use the points accumulated as cash for spending wherever you wish. So you can reward your customers with even more of an incentive than simply money off a future invoice, by allocating the points as a kind of cash back offer.
B2C and B2B Loyalty Programmes – 2 Sides of the Same Coin?
Overall, then, we’d say that the similarities between the two types of scheme are very much in evidence.
Both types of programme provide obvious advantages for any company who offers the loyalty bonus – based on being able to retain a customer for longer, as well as rewarding customers for their existing business so they aren’t tempted to look elsewhere.
And for customers, too, the benefits are clear. With the opportunity to save on costs being something of real value when it comes to deciding who they spend their money with.