5 Keys to Winning B2B Loyalty Programs

In the current B2B landscape, securing and retaining channel partners (contractors, dealers, distributors, installers, etc.) and end customers has become increasingly challenging. Higher customer expectations, marketing budget limitations, and intensified competition make it hard to acquire and retain channel partners. So, once you do win them, your B2B marketing strategy needs to go beyond the transaction and adopt retention strategies to keep them happy and loyal.

A B2B Loyalty Program is a partner incentive and retention strategy that engages channel partners and end customers and includes opportunities to drive more revenue (existing and new customers). In this blog, we'll look at what a B2B Loyalty Program is and the value it brings your company. We'll also talk about five keys to developing a winning strategy.

A B2B Loyalty Program, often referred to as a B2B Rewards Program or a channel partner incentive program, is a partner and customer retention strategy designed to strengthen channel partner relationships and maintain partner loyalty. Channel partners typically work in industries such as building supplies, home improvement, utilities, and so on, serving end customers. The program is a strategic initiative that goes beyond the purchase, rewarding customers for their loyalty, advocacy, engagement, and repeat business.

 Unlike a B2C Loyalty Program designed for individuals, a B2B Loyalty Program provides incentives and rewards for channel partners to encourage them to sell your products or services to end customers.

There are many different types of B2B Loyalty Programs. The one you design will depend on the industry, size, and business type of your partners and your business goals. That being said, you can leverage a number of standard components in your program, including perks and rewards, discounts and rebates, gamification, experiences, training, joint marketing activities, and more. We'll talk more about these components below.

The 5 Keys to Winning B2B Loyalty Programs

Building a successful B2B Rewards Program requires a deep understanding of your channel partners customers and your business goals. Let's look at five things you can do to create the right program for your business.

1. Consider a Tiered Loyalty Program

Not all partners bring the same value to your company. Some are more engaged, others spend more money, and others are more willing to advocate on your behalf. You want to design a program that offers greater perks and rewards to those partners who provide higher value.

To do this, develop a tiered loyalty program where you divide your channel partners into tiers based on level of spending, engagement, or some other segment. Each tier provides progressively more rewards and benefits, motivating customers to perform activities that help them move to higher tiers and get better rewards.

For example, you could create tiers based on the volume of spend: Level 1 is $50K - $100K a year, level 2 is $100K-500K, and level 3 is $500K and above. You could also design tiers around engagement levels, with a partner progressing to higher levels the more they engage with the company.

The rewards and incentives offered get increasingly better as the channel partner moves to a new tier. A basic, entry-level tier might provide occasional discounts or rebates, an intermediate tier might include larger rebates, early access to new products, and exclusive training, and an advanced tier would have all of these, plus invites to exclusive events, co-marketing opportunities, and dedicated training and support.

Your loyalty program needs to clearly define how the tiers work, the benefits of each tier, and the criteria required to move to the next tier. You should also provide a dashboard that shows their status in the loyalty program and informs them of upcoming offers or rewards they can achieve.

2. Adopt the Channel Incentives Your Partners Want

Whether you create a tiered B2B Loyalty Program or a single-level program, including the right channel incentives is essential. B2B clients look for various incentives. Some incentives are monetary, such as discounts and rebates; others value-added, such as exclusive education, training, or support; and other experiential, including invites to special events, networking, and co-marketing opportunities.  You can even offer higher-value rewards such as holidays, tickets to big events, etc.

The key is to provide the right mix of channel incentives based on the unique needs, preferences, and pain points of your partners.

Offer the Right B2B Rebates

Rebates are a popular incentive in B2B Rewards Programs. A rebate is a buying incentive that is given after a purchase is made. It may be a digital cash-back payment to a bank or PayPal account, a pre-paid credit card or gift card, or a physical check.  Digitizing the rebate process helps you save on costs, time, and staffing efforts, and provides a wealth of data.

B2B rebates are a tangible way to reward loyalty and work for several reasons. They:

• Incentivize customers to make larger or more frequent purchases.
• Provide an additional value proposition against competitors.
• Encourage stronger, lasting relationships as customers see the benefits of continued engagement.
• Encourage more prompt payments, improving cash flow.

Rebates serve as a mechanism for collecting valuable data on customer behavior. You can use the data from submitted invoices and purchase orders to analyze rebate redemption patterns to gain insights into what motivates your customers. Use this information to refine your marketing strategies, including the incentives in your loyalty program.

Validating Rebates

It's easier than ever to validate rebates for quick returns. Customers can submit a receipt, invoice, or purchase order (PO) through digital channels such as email, website upload, or text, have it validated and the rebate quickly applied.

B2B Rebate Management Software  

If you want to accept, review, and apply rebates quickly, implementing a B2B Rebate Management Software solution is vital. It allows customers to easily submit receipts and track their status and for your company to verify, notify, and fulfill qualified submissions.

 Unlike traditional, manual rebate management processes, rebate management software provides digital and physical options for submitting receipts and receiving the rebate. The right software will also provide the ability to customize rebate offers and integrate with CRM and ERP systems. In addition, the reporting available in this software can provide real-time data and performance monitoring, enabling you to quickly and easily understand how your rebate program is contributing to your B2B Loyalty Program and your business overall.

3. Foster Relationship-Building 
  

Your B2B Loyalty Program is about building a strong, long-lasting relationship with your channel partners. A B2C company can have thousands or millions of customers, but a B2B company has fewer partners, which means that customer retention is critical to the company's long-term success.

Create channels for channel partners, end customers,  and internal stakeholders to provide feedback and regularly collect insights on satisfaction, challenges, and suggestions. This information will help you make improvements that ensure you offer the right program rewards and incentives and make your channel partners feel like an important part of your business.

4. Leverage a B2B Loyalty Platform 
  

B2B Loyalty Platform Software is a specialized software designed to help businesses establish and manage loyalty programs. Some specialize in B2C, while others support both B2C and B2B customers.

Loyalty management software offers many capabilities that help you set up and manage all aspects of your B2B loyalty program, including creating rewards tiers, capturing and redeeming points, managing rebates, and providing other engagement opportunities such as contests and promotions.  It can automate many of the loyalty program processes and can integrate with your CRM and ERP software to enable you to support a seamless experience for your customers (i.e., it's not another solution your customers have to manage in a silo). 

Other key capabilities:

• Support partners in the program across different channels (website, mobile app, member portal, or rewards application).
• Engage with partners through non-financial perks and rewards.
• Monitor the efficiency and effectiveness of the program.
• Communicate with partners through various channels, such as custom loyalty portals, messages, notifications, and surveys, keeping them updated on program changes and communications.
• Run seasonal or tiered promotions to drive more engagement from your partners. 
• Provide reporting and insights into your partners and end customers and the effectiveness of the loyalty program or specific promotions. 

Finally, B2B loyalty management software helps secure partner and customer data with robust security and compliance mechanisms.

This is not a complete list of capabilities and features of loyalty management software, but it gives you a good idea of what you need and what to look for in a solution.

5. Continually Measure and Adapt 
  

Like any program, it's essential to establish key performance indicators (KPIs) to evaluate the success of your loyalty program, including metrics such as retention rate, average transaction value, and engagement. In addition, utilize data analytics tools to assess program performance and analyze behavior and redemption patterns to identify trends and areas for improvement.

Finally, conduct periodic audits to evaluate overall program effectiveness and to ensure alignment with evolving business and partner needs.

3 Real-world B2B Loyalty Program Success Stories

Let's take a look at three examples of successful B2B Loyalty Programs:

3M Increases Revenues and Drives Customer Loyalty

3M implemented a customer loyalty program targeting dental healthcare professionals to foster loyalty, increase revenue, and reduce customer churn. Snipp created a dedicated platform where dentists could register and upload purchase invoices to earn points and rewards. Additional points can be earned by performing activities such as referring friends and completing profiles. The program also includes non-financial rewards such as courses and business support.

 The program aims to incentivize the use of 3M products and serves as a valuable tool for data collection. By gathering consumer and purchase data, 3M can gain insights into consumer purchasing habits, enabling effective segmentation and personalized communication and offers.

IKO Drives Loyalty Among Contractors and Distributors

IKO had a B2B ROOFPRO loyalty program in the US and Canada. It wanted to increase contractor and distributor satisfaction by innovating the program, including increasing the speed and accuracy of invoice processing and reporting.

Using the Snipp C.A.R.E hub, IKO was able to offer transaction processing of Contractor invoices and the bulk processing of sales files from Distributors. In addition, customers were able to select from multiple options to receive their rebates.

Barilla Drives Sales Through Rebate Program

Loyalty programs don't have to be complicated. Barilla wanted to celebrate National Pasta Month by offering a rebate to restaurant owners. They instituted a digital rebate program that offered restaurants a rebate on cases of Barilla Pasta. The more cases they purchased, the greater the rebate. 

Along with the rebate, the loyalty program included digital content such as recipes and tutorial videos focused on cooking with Barilla products.

See more B2B Loyalty and Channel Incentive cases here.

Give Your Channel Partners  The Loyalty Program They Deserve

In a B2B environment, keeping your partners happy and loyal is essential. The best loyalty programs offer financial and non-financial rewards that align with partners' needs and your business goals. Implemented and managed well, a B2B Loyalty Program will foster enduring partnerships, drive sales, and help you gain a competitive advantage.

To brainstorm with a loyalty expert on how to foster and incentivize your channel partners, contact us here! Also, read our full B2B Channel Loyalty Guide.