According to Marketing Metrics, the success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is only 5-20%!
The most common pitfall for businesses around the world the belief that if they have a great product or service, then customer retention will follow naturally.
But if you stop trying, your customers start feeling that you no longer care about them.
A loyal customer, on the other hand, will buy from you again and encourage others to do the same. This often results in quality referrals and positive word-of-mouth reviews. Loyalty goes beyond spending money. Loyal customers will vouch for you and serve as advocates for your business.
One study showed extremely happy customers are more than five times as likely to repurchase. In addition to a high return purchase rate, they are also almost seven times as likely to forgive a business. And who couldn't use that kind of grace in today's world of uncertainty?
Here’s why business to business customer loyalty is so important and how to make it work.
The Importance of B2B Customer Loyalty Program
Upkeep and fine-tuning of your relationships between you and your B2B customers is imperative. After all, according to the Harvard Business Review, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one and increasing customer retention rates by 5% increases profits by 25% to 95%.
While the B2C world has been employing customer loyalty tactics for decades—such as your credit card that generates airline miles—the B2B world hasn’t quite caught up to speed. And, as one Forrester report finds, applying tactics that work well in a B2C setting may not be as much of a stretch in B2B situations as you think.
Here are six B2C loyalty marketing tactics to include with your B2B strategy.
1. The Best B2B Loyalty Programs Do the Research
Everybody is talking about loyalty nowadays. It is not that customer satisfaction has fallen by the wayside; rather it is that businesses recognize that a satisfied customer isn’t necessarily a loyal one.
The secret of customer loyalty is finding small things to do that go beyond the customer’s expectation and, as a result, make a big impact. You need to be relentlessly imaginative in finding a constant stream of new and different initiatives.
The quickest way to find the things that will win the hearts and minds of your customers is to do the research. Ask them.
Find out what your ideal customers value, expect, and want vs. need from your brand's products and services. This will help you set appropriate goals, benchmarks, messaging and campaign strategies. It can even help you craft the bones to a B2B loyalty program that, based on facts and research, has a high likelihood of immediate success. Instead of the trial and error you can find yourself in when crafting a program without the research.
And measure everything you do. Measure customer churn, measure complaints, measure customer satisfaction, measure the frequency of introducing new suppliers, and measure the likelihood of recommending. Through measurement will come an understanding of the degree of loyalty of your customers and the tools to ensure that it is driven to the highest possible levels.
2. Understand the New Buyer Journey
Research from Gartner has revealed that not only does most of the buyers’ journey happen before the company is ever contacted; only 17% of the cumulative time a buyer puts into making a purchase will be spent meeting with potential suppliers. That’s all of the potential suppliers, a buyer will assess, too, not just the one solution they ultimately purchase.
Per 2019 research from Gartner, “When buyers are comparing multiple suppliers‚ the amount of time spent with any one sales rep may be only 5% or 6%.”
The customers in your loyalty program can help you attract new customers during their digital and sales-averse journey. Just encourage them to talk about you.
Create a referral channel or points or reward for writing testimonials and reviews. Help them spread the word. Send them a small token of your appreciation after they do so. Give them something to give others and play into the pro-social angle of influencing.
Who better to help you attract the new buyer's than the ones who already have.
3. Have a Solid Communication Strategy
Intimate knowledge of the B2B buyer journey is crucial to creating a cohesive and effective communication strategy.
Consistency is achieved by emphasizing a recognizable look and feel for a business, alongside the emotional and functional benefits a brand evokes, and doing it on a regular basis. It means making sure every interaction, from email to social media to face-to-face, represents the brand.
It’s extremely important to communicate with new customers saying hello and thank you. Subsequent emails can introduce your organization’s team members, or share the story of your business—why you opened your business, what services you offer and what makes you unique compared to competitors.
4. Elevate Event Offerings
While free tickets to a box seat at a baseball game or concert are a tried-and-true method of loyalty marketing to your high-value customers, they're not even the tip of the iceberg when it comes to the variety of events available.
Here are just a handful of event ideas to build customer loyalty:
- Give loyal customers VIP access to a user event
- Offer them hands-on access to your latest product at an immersive product launch
- Provide valuable networking opportunities at an expo that brings your customers together
And embrace virtual events and experiences. FOMO is a thing of the past, because of the wildly improved digital experiences. With virtual events, customers can access event content like keynote speeches and presentations. Even better, customers can choose to access virtual event content live or on-demand, whenever they want after the event.
Regardless of the kind of event, they’re most successful and build the most loyalty when they align with and reinforce. With the right content and eye-catching appeal, your event provides just the thing your company needs to keep customers loyal.
5. Include Inspiring Incentives
At face value, many credit cards are the same. But they differentiate themselves based on what they give back to the customer for their loyalty: airline miles, gas money and more.
The concept of “spend more, get more” is pretty ubiquitous in B2C circles. But—even though it’s a perfect match—many B2B companies haven’t yet made that leap.
One way of doing this is to reward your partners with points for every dollar they spend on your services. Go further than that and offer additional points by purchasing products from sponsoring manufacturers, which offers additional revenue for you and additional revenue into the program while providing a marketing opportunity for your manufacturers.
Maximize your customer loyalty incentive by not allowing customers to spend their points until they’ve reached a minimum quota. When people can see the impressive awards they can earn, they’ll come back to you, over and over again.
Even just offering gift cards, reward points and milestone gifts can be a differentiator for your brand and a nice tangible reward for your customers.
6. Reward & Recognize
In a world where online reviews are increasingly important when winning and keeping clients—86% of people hesitate to purchase from a business that has negative online reviews—it’s more important than ever to recognize your loyal customers and ensure they become advocates for you.
A little bit of recognition and appreciation for B2B customers goes a long way in ensuring their loyalty to you. After all, extrinsic awards are only one kind of motivator—other motivators like preferred customer status and public recognition are other great ways to ensure the loyalty of your team.
One unique way of benefitting your company and your customers’ is showcasing customer successes. Case studies are proven to be an effective way to market your business, and publicly recognizing customer success is a perfect way of building rapport and loyalty.
Today’s businesses face incredible challenges, many of which can be conquered with a strategic loyalty program. Learn how we helped to build a custom loyalty program for complex purchases.