5-Step Maintenance Check for Your B2B Loyalty Program

A successful B2B loyalty program is an important sales tool that enhances your value proposition with your B2B customers. To optimize that impact, it needs to change with your organization's business goals and sales objectives, addressing new and/or ongoing challenges and opportunities. To maximize customer engagement, you should be checking to ensure customers are using and interacting with the program as much as possible.

Ideally, your B2B loyalty program should be evaluated and potentially updated each year so you can keep it current with the business situations at hand and drive the best possible results and optimal customer loyalty. 

Here is your 5-step maintenance check for your B2B loyalty program to ensure it is working as well as it should be:

Before changing your loyalty program, it's crucial to understand if the program is even working to your expectations. Shockingly, over 10% of businesses don't bother to calculate their program ROI at all, and of those who do, over 15% don't use the correct methods. (peertopeermarketing.co) 

A good B2B loyalty program should be a profit center, generating far more sales profit than the costs required to run the program. This is your first step and can help guide the other steps needed to enhance your reward program for optimal performance. The good news is that, unlike most sales and marketing tactics, it is easy to calculate the ROI of a B2B customer loyalty program.

In the simplest terms, you want to compare the changes in purchasing over the previous 12 months by existing customers who earn rewards to the program's cost. To ensure the program is driving these changes, use the purchasing behavior of customers who do not participate in the loyalty program as your control group. Assuming you have at least 100 customers in each group, you can be relatively certain the differences seen can be attributed to the reward program (assuming all other influences on the purchase process are consistent for both groups). Once you find the difference in total spending, use your average gross profit margin to determine the total incremental gross profit earned from the reward customers. Next, tally up all the reward program costs for the same 12 months (cost of points, staffing/service provider fees, etc.) and apply this formula:     

For more detail on calculating ROI, check our Complete Guide on How to Calculate ROI of Loyalty Programs. 

Many incentive programs run unchanged for years, despite the sales goals of the company offering the program changing frequently. Rewards are often issued for the same sort of ongoing purchase behavior and don't reflect the current needs or focus of the B2B business. This is a misalignment and needs to be corrected. You can do this in a couple of ways, through short-term and/or ongoing program offer structure. 

For example, if you are marketing a new product launch, include the new product in your customer loyalty program, but don't just lump purchases of the new product into the sales totals being rewarded. Instead, use special bonus offers tied specifically to the new product to heighten awareness and intent to purchase by your B2B loyalty rewards program buyers. They will earn the usual reward for the sales on all product purchases, but offer a special reward for buying this specific new product, essentially "double-dipping" by purchasing it. This is easily done by segmenting purchases of these new products from your customer data and will drive dramatic changes in purchasing and brand loyalty.

Many loyalty reward programs fail to embrace growth tiers and make their loyalty program more "performance-based." It is very easy to add individual program sales growth targets for existing customers using their historical sales data. This practice increases the program's relevancy, further enhancing customer engagement. It helps to turn small or infrequent customers into loyal customers as they alter their purchase behavior to direct more of their available spend to the program operator to capitalize on the growth-related bonus rewards. There is no downside to the B2B business offering the loyalty program for any customers who do not respond, as no or few reward costs are incurred. A growth-based program will always help increase your program ROI.

Many B2B marketers employ a "one size fits all" mentality when structuring their B2B rewards program. A truly successful B2B loyalty program needs to reflect that there are easily definable customer segments within the program that will benefit from specific program rules or offers that reflect their current and/or desired value to the organization. Simple customer retention may be the greatest opportunity for many B2B marketers in a hyper-competitive B2B market, while acquiring a new B2B customer may be more important for an emerging B2B business.

For example, if you have a select group of very large and loyal customers who are already directing most of their available spending to your organization, then a growth-based rule will not have much appeal or impact for them. But on a smaller account, where you are currently only the number two or three vendor, the customer could easily shift more of their spending to you to take better advantage of the same program growth rule. You certainly don't want to alienate the former group to increase spending by the latter group. Consider incorporating some special perks into your reward program for your VIP accounts. You can easily employ a minimum spend criteria to identify who qualifies for these perks, with their VIP status carrying over each year (growth or no growth) so long as they meet the minimum purchase criteria.

Many program operators don't think to include a points expiration when drafting the program rules. This oversight results in an accrued liability – where the customer or business who earned the points technically has the right to their value in perpetuity, even if that business is no longer your customer. This is never a good idea.

Inversely, some B2B loyalty programs require all earned points to be used within the calendar year. This, too, is a mistake as many loyal customers will want to accumulate points to redeem them for a big-ticket item, helping to drive increased spending or various strategic sales goals that are the basis for the program in the first place.

The best solution is to include reasonable rules that you, as the program operator, can waive at your discretion for your most loyal customers or biggest accounts, etc.

Consider incorporating a 2-year expiration on all points issued in your loyalty program. This provides your best or top customers with a reasonable window in which to redeem their points for their desired reward items but protects your business from exposure on point values held by low-value customers or accounts that are no longer active.

Embracing these 5 simple tips for reviewing your B2B customer loyalty program structure will undoubtedly help improve your program participation, engagement, and results – especially ROI.

Lift & Shift offers a powerful B2B reward platform that can help your company leverage its sales data to drive incremental purchases with customers and channel partners or motivate sales staff. We work with manufacturers, distributors and service providers to analyze sales data, identifying purchasing gaps and other valuable targeting opportunities. 

We create and deliver highly relevant offers to customers, in-house sales staff or sales associates, motivating your target audience to respond, using a wide array of appealing reward options as influencers. Our performance-based reward structures deliver an unparalleled return on investment, with absolutely no wasted budget. 

Our customizable reward platform enables clients to easily benefit from a robust loyalty reward program. It's affordable and includes Lift & Shift’s turnkey professional program administration. We take care of everything so you can focus on your key initiatives.