Earning your customers loyalty is critical to B2B marketers. Why? Simply put, loyalty translates directly into profitable customers referrals and typically an abundance of cross-sell and upsell opportunities. Mistakenly, the typical B2B company either dismiss loyalty marketing practices as tactics that apply only to discount-hungry consumers and not to their complex business buyers. This is a missed opportunity. There is a lot B2B marketers can learn from the best practices associated with B2C loyalty approaches and strategies including, the main pillars behind converting satisfied customers in loyal advocates, a in-depth understanding of customer motivations revealed from use of relevant customer data, more consistent interactions across the typical organizational silos, and how to tailor your loyalty initiatives to be agile so as to be able to adapt to the ever-changing demands of customers.
B2B Marketers Must Prioritize Retention
The majority of business buyers these days take it upon themselves to find and research the information they need to become more educated about their planned investment purchase and renewal decisions -- very similar to our yourself as a consumer looking to take control of your upcoming purchase of washer and dryer, refrigerator, piece of furniture, etc. You've no doubt heard it before, but its worth repeating. It is essential for B2B companies to broaden their engagement efforts to the entire customer relationship, including loyalty and retention, which are often absent compared to other traditional priorities B2B marketing professionals are responsible for. Think Twice Don’t Discount B2C Loyalty Approaches And Benefits B2C loyalty programs may be associated with points and discounts, but those are only two of many options available. Other evolved approaches provide customers with meaningful value and make them feel valued. With modifications, applying perks that work well in a B2C setting may not be as much of a stretch in B2B situations as you think.
Use The Nuances Of Your B2B Business Model To Guide Loyalty Strategy Decisions
The B2B landscape encompasses a wide range of markets, sales models, business relationships, and product and service types. To avoid over- or under-engineering your loyalty strategy, we recommend you examine the overall stickiness of your company's flagship products or services, the degree of separation from your customers, and volume of transactions when crafting your approach.
B2B Marketers Should Avoid The Hit-Or-Miss Mentality When it Comes To Loyalty Marketing
We encourage the B2B companies we work with to significantly change their mindset when it comes to Loyalty Marketing. Specifically, we work to move their focus on products, internal processes, and organizational silos to a focus on the total customer relationship — from discovery and purchase to engagement, retention, and loyalty. But Today They Continue To Prioritize Acquisition Over Retention
We're not saying that retention and loyalty programs aren’t completely foreign concepts to the B2B world. Many of companies we work with that sell business products and services rely on channel partner loyalty programs to retain relationships with their reselling partners, and invest heavily in customer reference programs. Yet for the typical B2B company, loyalty still falls well short of other marketing priorities. Here's our take as to why this costly gap exists.
■ The lion’s share of the marketing budget goes to generating leads. B2B companies continue to spend a significant portion of their marketing budgets on acquisition and brand building activities — like advertising, PR, and corporate sponsorships — compared with customer response, direct marketing, and innovation. Even initiatives that nurture relationships with existing customers and end users, like social communities, advocacy marketing, and reference programs, really only focus on the most visible goal of building the new business pipeline. ■ Retention is passed off as someone else’s problem. With marketing primarily focused on acquisition activities, responsibility for retention and relationship management historically falls to sales, support, and service. The complex and multilayered nature of B2B customer relationships adds a wrinkle to retention initiatives because there are multiple audiences to consider: from the buyer, to the channel partner, to the end user. Without a unifying thread or strategy to tie them all together, it’s easy to deflect accountability or duplicate efforts.
■ Customer insights practices are not taken seriously. B2B marketers rely on a variety of structured engagements (referral programs and social communities) and unstructured interactions (sales calls, lunches, bundling, and promotion) to manage and nurture client relationships. While these interactions build intimacy with customers, it’s difficult to scale them without integrated systems to collect, analyze, and apply customer insights. As one of our clients put it, "we have specific programs in place dedicated to our partners, users, and customer champions, but there remains a significant challenge in stitching [the data and strategies] all together under one platform.”
Extend and Mature Your Company's Current Retention Efforts
Loyalty programs may be a B2C construct, but the concepts apply in B2B marketing. As B2B marketers we need to get serious about loyalty. You can jumpstart their efforts by embracing some B2C proven approaches. In fact, it may be a matter of reframing, organizing, and scaling what’s already in place. In the short term, if your analytics team want to prioritize retention and relationship-building, they have to: ■ Redirect efforts that can benefit both your customer acquisition and retention objectives. Pieces of loyalty marketing may already exist inside your hallways in the way of advocacy and referral programs, customer reference management initiatives, trade shows, etc. just because the primary focus today is on generating more qualified leads, reducing service costs, and gathering case study content, it doesn’t mean those initiatives can’t evolve to serve a mode of duality moving forward, right? After all, many of the activities in these types of initiatives naturally nurture and engage your existing clients. Measure their impact on loyalty metrics like retention, enrichment, and engagement, and begin elevating relationship management within those initiatives.
■ Reach across the aisle to sales, service, and support. Shifting from a tactic-driven mindset to one driven by the buyer life cycle — from purchase to engagement and retention —requires internal collaboration.16 Identify and audit all existing efforts that retain and grow existing relationships to identify areas where marketing can provide support and ensure alignment across metrics and objectives. Otter Products’ exploration of customer loyalty programs started as a sales-led initiative, but its loyalty program will be run as a marketing program with customer insights and results feeding back into sales, field marketing, and supply chain teams. ■ Raise innovation efforts to focus on serving and retaining existing customers. B2B CMOs need help breaking free from traditional marketing paradigms focused on branding,promotion, and lead management. Loyalty and retention may not get a dedicated line item in the budget yet, but we see marketers allocating more budget — albeit only 5% on average — toward innovation efforts in 2015.17 Earmarking some of those dollars to invest in building customer loyalty will measurably help you deepen customer understanding and create more engaged customer relationships. We promise!
Thoughts? Let us know.