Building Lasting Loyalty in Ultra-Competitive Businesses with Robust Rewards Programmes
The B2B space accommodates only a slim margin for error. The number of clients is small, and customer retention is vital to the success of a B2B enterprise. Therefore, companies should do their best to not only acquire but also retain their customers. This is particularly true for firms in industries like logistics, software, corporate banking and so on that face extreme competition.
Companies usually make the mistake of focussing a bulk of their energies on overtaking the competition. While that can be a big part of the short-term strategy, a long-term business success strategy must focus on the customers.
Businesses have to thoroughly understand each step in the customer purchase lifecycle to influence their purchase decisions and to create lasting loyalty among them. According to a report by KPMG, in a B2B customer lifecycle, the purchase and pre-purchase decisions are heavily dependent on referrals. While “84% of the B2B sales begin with a referral, 90% of the B2B purchases are influenced by peer recommendations.”
This means that companies must design robust rewards programmes that create a positive image in the minds of their customers right from the very first transaction. Here are the components of a robust rewards programme for B2B businesses to build lasting loyalty.
While financial incentives like discounts can work well as a starting point for loyalty programmes, a lasting relationship can be built on a strong understanding of the customer needs. Use historical data to understand the motivators for individual consumers to design loyalty programmes tailored to their needs. While some customers choose a provider solely for their price, others place more value on quality than price, while some may be looking for a reliable partner. Understand the unsaid need and fulfil it with the loyalty programme. For instance, price-sensitive customers can be offered better value deals. On the other hand, customers looking for a reliable partner can be offered add-on services for a discounted price.
While it serves you well to focus on the customer rather than the competition, it will help you to compare the industry-wide rewards programmes while creating your own. Make sure you understand what the competitors are offering and how the customers are responding to their rewards initiatives. This will give you are a ready-made insight into what the customers in your industry want with their rewards programmes, and you can use those factors to make yours competitive to the industry offering.
A rewards programme should never be static. In the design-stage, leave enough room for changes. This is critical. Create a dynamic feedback loop that allows customers to communicate their comments about the company’s feedback programme. This comes with twin benefits. It will serve as a guide to improve the rewards programme as well as make the customers realise that the company genuinely cares about its customers.
B2B space is extraordinarily competitive. Each business and its methods of customer engagement are different. However, with time, rewards programmes have evolved from being add-on programmes to an essential part of a service offering. So, to create a loyal customer base, they must invest in designing a fantastic rewards programme.