How to Use B2B Reward Programs to Deliver Sales Growth

While a reward program should include a retention component (which rewards B2B customers for continuing their regular purchasing), a properly structured B2B reward program must focus on growth. In this manner, the program will become "performance-based", where the bulk of the program reward costs are incurred ONLY IF your customers increase their spending with you. 

Other B2B sales and marketing tactics frequently involve costs or expenditures that prove difficult to measure ROI. Trade shows, trade advertising, sponsorships, and direct sales calls are all important tools but involve sunk costs with no guaranteed sales outcome. How do you calculate the ROI of each of these?

A growth-based B2B loyalty program is easy to measure. It uses your own data to determine whether or not a customer has grown their sales revenue with you. If they have, then they earn the rewards you have allocated to each sales increase level. No purchases? Then, no reward costs. Your program ROI is always assured.

A good B2B program will be 100% performance-based. The key performance criteria is purchase growth by your existing customers: more volume per year, adding new categories, more frequent purchases, more units per purchase, etc. All of this helps to drive growth and boost customer engagement and customer retention. 

Growth can also come from new customer acquisition, so most programs will include B2B incentive rewards for new account openings (usually with some sort of minimum spend criteria) and because new accounts can often be secured using referrals from existing customers, referral rewards are often a very good idea for any growth-based reward structure. 

Data never sleeps. Once a reward program has been launched, it works 24/7, helping to engage and grow every participating customer/account without the need for in-person visits by your sales team. 

Each customer will have individual program goals, tied to their historical data. Their progress against these goals is constantly measured using their ongoing sales data – all without the need for you or your team to add to your existing workloads. The program delivers highly customized communications and relevant program content directly to each customer (growth offers, program goals, achievement status, reward milestones, etc.) and provides your sales team with a useful tool to use when communicating with these customers.

Perhaps more importantly, the reward program provides your team with an automated support resource to better engage all the medium to small accounts that they can't spend as much time with, but who collectively represent an enormous growth opportunity for your organization. Your reward program helps to draw more spending from these accounts without any additional overhead, and all reward costs are 100% performance-based. 

Using your sales data, we look for customers with similar purchasing behavior. Common segmentation will include:

• annual/quarterly/monthly sales volume
• transaction count
• categories purchased/not purchased
• product bundles
• order frequency, recency, and/or decline

We can segment each B2B customer right down to the SKU level if need be.

The segmentation process allows us to help you tailor each customers' program experience to be as relevant as possible, increasing customer engagement and response rates.

As detailed further in the article, How To Do Customer Segmentation Analysis Effectively in 2021, segmenting your customers is one of the highest performing sales growth tactics you can undertake. 

This is the most critical step of the process. The more time spent developing the most relevant possible goals for each client, the better the results and bottom-line ROI impact the program will have.

Table stakes for any growth-based program will include year over year growth targets but each customer segment should also have some tactical growth objectives:

• incentivizing the first purchase of a newly introduced product category or line
• growing the total number of categories regularly purchased
• increasing order size
• encouraging e-purchasing (account set-up, first purchase or ongoing)
• new customer referrals 

All of these are excellent examples of relevant goals for your customers. 

Based on your available margins for each type of purchase, we work with you to create purchase-triggered reward offer values for all customer segments and desired purchase outcomes that make economic sense for your business, while delivering the highest rate of growth.

We will typically employ sales growth tiers, rewarding the customer with increasingly higher reward incentives based on their growth percentage – the more they increase purchasing, the greater their reward levels. 

Sales growth of 5-10% is usually very achievable for even well-developed accounts, while smaller accounts that often receive less attention from the sales team can see much more dramatic increases simply because they begin receiving highly relevant sales overtures with incentives tied to each. 

Simple regular contact is often enough to encourage customers to direct more spending to you and encourage category switching. In one recent case study, we documented how our client increased sales by over 15% year over year and 77% over a 5-year period. 

There are no firm values that indicate what sales growth rate is good or bad because the rate of growth is relative for each company. Factors such as industry, company size, sales goals and the competitive landscape can play into the calculations, however Stocktopedia shows that the range of 5-10% is a good marker.

A good rule of thumb is to reward customers in line with the value of the purchase outcome to your bottom line – a mentality of, “I’d pay X in order to receive Y” is never a bad idea. 

Rewarding customers for purchasing isn’t the only way to grow your sales using a B2B reward program. We also suggest adding customer referral incentives. 

Your existing B2B business customers are often members of industry peer performance groups. These groups can be excellent sources of new customers and your customers will be even more inclined to recommend you to their peers if they understand they will be rewarded for doing so. A two-way offer will reward the new customers for making an initial purchase with you, and also reward your existing customer when the transaction takes place.

As McKinsey & Company outlines in their study, Sales Growth: Five Proven Strategies from the World’s Sales Leaders (2nd edition), a proven sales strategy among global sales leaders is to sell in a way that is relevant to your customers. 

Using an automated and data-driven communication platform, we highly personalize each customer’s monthly/weekly reward communication to reflect their key program metrics for the best possible customer experience. 

These metrics include: 

• rewards earned to date
• rewards available to redeem
• redemption suggestions
• ongoing long-term reward opportunities tied to growth targets
• limited time reward offers tied to short-term tactical sales objectives 

Each item is configured for maximum impact with each customer, increasing communication relevancy and customer value.