How a Customized and Managed B2B Customer Rewards Program Outperforms Loyalty Program Software

A man is sitting at a desk in front of a computer.

Introduction

Companies are always looking for new ways to grow sales and expand their customer base. Many start by using SaaS-based loyalty platforms, which provide a template-driven, do-it-yourself (DIY) approach. However, after encountering the limitations of these programs, they are often prompted to explore fully managed solutions that are strategically tailored to their specific business needs.

While SaaS-based platforms might share some features with managed programs, especially in the B2C space, they fall short when addressing the unique demands of B2B loyalty programs. Program design, data analytics, transaction processing, customer communication, reporting and reward array are all critical to a program's success.

What follows here highlights how a fully managed B2B customer rewards program delivers better results compared to an in-house program relying solely on SaaS.

Top issues to consider when evaluating a SaaS loyalty program vs. a fully managed solution

There are five common issues that cause companies to make the change from customer loyalty software to a managed program:

SaaS programs can be labor-intensive

All loyalty programs involve some form of sales data. Whether it’s thousands of lines of transactional data from a POS or ERP system, or reward claims submitted by program participants. If the reward platform is not automated, it is challenging to easily analyze and validate the information. This dramatically limits the potential uses of the program and its results.

Additionally, the more participants in a program, the higher the number of customer service inquiries. Missing loyalty points, forgotten passwords, reward redemption delays, and other issues all require someone to respond to each inquiry, investigate and report back, which can be a significant time investment for your business.

SaaS programs require work for customers to participate

Your customers are busy, and ensuring a seamless experience is essential to maintaining their loyalty. Your customer loyalty program software has to support this need. If your SaaS loyalty program is not set up with user-friendly features or key functionalities are hidden behind costly add-ons, customers may struggle to participate. This could include challenges in joining the program, submitting claims, checking their rewards balance, redeeming points, or receiving relevant communications. If these basic criteria aren’t met, your program won’t generate the brand loyalty you were hoping for.

SaaS programs lack insights and intelligence

Measuring the impact of the rewards program is one of the most crucial tasks for a program owner. A well-structured loyalty rewards program will generate substantial incremental sales and profit for your company. Many DIY products offer little or no measurement tools or capabilities, and as a result, your company is literally flying blind. Opportunities to tweak or change the program and its uses are missed, resulting in underachieved program ROI.

The SaaS program template doesn’t match your business goals

It's frustrating to invest in a loyalty program platform only to find out that it lacks the features you need or can't evolve with your changing business priorities. SaaS loyalty programs often follow a templated, one-size-fits-all approach, which can limit your ability to customize the program to your unique business objectives. These platforms are designed with general principles in mind, making it difficult to achieve specific outcomes that are crucial to your success.

But your business is not like all others; you need a loyalty program solution that aligns with your sales process, driving greater market share, increased sales, and better bottom-line profits. Off-the-shelf SaaS programs are limited in their capacity to deliver these results, offering only basic, generalized benefits.

A fully managed program is custom-designed for your specific business model, competitive environment, and strategic imperatives. This enables you to leverage your program as a strategic tool designed to meet your unique business objectives and drive measurable results.

The SaaS program fails to evolve

Many B2B loyalty programs are set up and largely remain unchanged for years, failing to adapt to a company’s evolving sales priorities. The programs are based on accumulated annual sales, where customers earn points as they make purchases, and then the points program resets at the end of the year. This model lacks the flexibility necessary to drive consistent quarter-over-quarter or year-over-year sales growth, which is essential for capturing a larger market share and enhancing the average customer lifetime value.

A SaaS loyalty program often misses the opportunity to turn marginal customers into more profitable customers because it fails to incorporate strategic sales initiatives, such as new product launches or cross-sell opportunities, into the program rules or design. These are incredible lost opportunities for better loyalty management, customer engagement, and the creation of more profitable customers.

A customized managed B2B loyalty program provides you with a team of experts continually reviewing your program's performance, ensuring that any necessary adjustments are made to optimize ROI and keep the program in line with your annual strategic goals.

8 steps to loyalty program excellence—tools and expertise checklist

The five loyalty program software challenges outlined above can be attributed to two key areas: tools and expertise. You can’t have just one of these—a truly impactful loyalty program needs both.

Two men are measuring a wooden deck with a level.

Here’s an analogy to clarify—building a deck. Many people try to economize by doing it themselves. They look up some plans, watch a video online, and order the lumber. However, building a deck is a lot more complicated than just nailing a few boards together. It requires careful planning and design, an understanding of building codes, the correct calculation of the wood required, a variety of tools to perform the actual construction and expertise to put it together—ideally without losing a finger. The deck then needs to be properly maintained in order to last longer and deliver optimal use and ROI for your family.

Building and managing a great B2B customer reward program is similarly challenging. There is a lot to consider in the planning and design, not to mention the day-to-day program administration and, more importantly, the program outcomes. Consider the tools and expertise required to create customer loyalty programs that will convert more existing customers into loyal ones, increase the frequency and volume of repeat customers, drive referrals and attract new customers too.

1. Ensure your reward program is a profit center—key program design considerations

Every company is different, so your program should reflect your unique set of needs and priorities.

What should your reward rules be?
How rich should your reward values be?
Should you use the same reward values across the board or vary them according to what you sell?
What are the margins involved?
Who should be targeted with the program—all customers or select segments?
Is a minimum spend required, and how should it be determined?
What sort of rewards should we include?

2. Create an on-site user experience your customers will love—best-in-class program user tools

It’s one thing to say, “We have a points program.” Still, it is another to actually deliver a user-friendly loyalty initiative and customer reward program experience that builds customer loyalty for your brand. It has to be easy for your customers to sign up, understand the program rules, view their points balance, learn about opportunities to earn more points, and then use the points to obtain the rewards that interest them. It also has to be easy for your sales team to leverage with customers.

This means:

An intuitive customer-facing reward website
A personalized monthly loyalty reward statement that includes account balance and realistic opportunities to earn
A simple claim submission portal (if required)
An easy-to-use points redemption interface with a great selection of engaging reward options
A referral program that rewards your existing customers as well as new customers
A sales team portal for your sales team to access their customer reward details prior to making sales calls or visits

3. Know your customers and give them what they want – using data analytics

When it comes to B2B loyalty programs, understanding your customers on a deeper level is essential for driving meaningful engagement and incremental growth. Unlike many SaaS products, which are often designed for retail applications with limited transactional data analysis, a customized, fully managed loyalty program leverages specific customer behaviors tied to data-driven insights pulled from historical sales data.

In B2B loyalty, success is measured by two primary metrics:

and

Achieving these outcomes requires the ability to quickly and accurately analyze a lot of sales data. A fully managed program will employ a suite of different analytical tools powered by proprietary algorithms—complex mathematical formulas that sift through mountains of customer data to identify key purchasing trends, customer types, and segments. This data-driven approach is vital for identifying customers who have:

Reduced purchasing volume in the past 3 -18 months—in isolation or compared to peer customers
Never bought a particular product, brand or category
Not purchased the same product bundles or groupings as similar customers
Not had certain types of repeat purchases

Developing these tools (and the skills to use them) requires expertise and experience and is essential for the success of any customer loyalty program. They enable you to better target and engage customers with relevant offers tied to specific purchasing behaviors—ultimately optimizing program ROI.

In contrast, a SaaS loyalty platform will often lack such advanced resources, or the manager administering the program may not have the time or ability to work with the algorithmic queries involved to obtain the data insights.

4. Turn your sales into repeat customers—the importance of transaction processing automation

When it comes to loyalty program participation, program perks (the loyalty points and the rewards they can be converted into) are the key to changing customer behavior. Customer reward programs are “opt-in” programs, where the customer elects to participate in the program to receive points tied to making the purchases your company wants to see more of. It is crucial that each customer receives all of the points they are due in a timely and consistent manner to reinforce the desired behavior. That’s where robust transaction processing comes into play.

Drive strategic purchasing with customized reward rules

A well-designed B2B loyalty program enables your company to strategically influence purchasing behavior across a wide variety of customer types and sales goals. This requires a complex set of reward rules that align with your specific business objectives, such as year-over-year growth targets, special product bundles, cross-category or upsell purchases, e-commerce orders, etc. Each will have its own set of reward rules. These rules need to be tracked quickly and efficiently. As qualifying purchases are made, the associated rewards must be calculated and accumulated, then deposited into each customer’s reward account. This level of precision not only ensures program efficiency but also maximizes the impact of your incentive efforts, fostering deeper engagement and driving incremental revenue growth.

Transaction processing automation eases evaluation workload

Trying to do this manually with spreadsheets is a non-starter; transaction processing automation is the key. A fully managed loyalty program leverages a proprietary rules engine, where clients’ program rules (ongoing and short-term or tactical) are set up. It will then import each client's sales information, which can consist of millions of lines of data, and instantly compare it to their reward program rules, enabling it to calculate what reward customers have earned in a matter of seconds without the potential errors associated with manual calculations.

Unlike typical SaaS solutions, a professionally managed B2B loyalty program provides unparalleled expertise and support, ensuring your program runs smoothly and delivers maximum impact.

5. Keep customers coming back—personalized reward member statements drive engagement

Data analysis is just the beginning of your customer's data-driven reward journey. Once you understand who has purchased what—and who hasn’t—the next crucial step is to translate these insights into personalized communications that leverage relevant program reward offers. The more relevant the offers, the greater the opportunity to drive the desired purchasing behavior and increase sales and profitability, not to mention KPIs like customer loyalty, customer retention, customer referrals, and new customer acquisition.

The best fully managed programs will employ a robust, industry-leading CRM platform to deliver personalized, one-to-one communications to each participant. Your reward customers will receive a monthly (or biweekly) personalized reward statement highlighting key program details, including:

Current point balance
Purchases required to reach the next reward level
Progress percentage towards the next goal
Special offers tied to purchase history and tactical sales objectives
Available reward items based on their current reward point balance

The statement should be curated to reflect the unique status of each customer and journey within the program. To help you understand the impact of the communication, a managed program will include reports that provide open rates and click-through data, offering invaluable insights for your sales team to identify areas of heightened customer interest and engagement. By personalizing the experience, a managed loyalty program not only keeps customers informed but also actively motivates them to take the next step in their purchasing journey, ensuring long-term loyalty and engagement.

6. All your customers are not created equal—offer a diverse selection of rewards

A computer screen with a bunch of items on it

Most B2B companies have thousands of customers, and no two customers are exactly alike. Whether they are buyers, purchasing managers, or business owners, each individual has unique preferences and priorities. A successful loyalty program must cater to this diversity, offering a range of rewards that resonate with every type of participant. SaaS-driven DIY platforms tend to limit rewards to the company's own products or services—such as a free oil change or free coffee. This narrow approach is not appropriate for the varied B2B customer base. Your reward program is designed to recognize and reward customers for their loyalty. It needs to provide personalized rewards that are as diverse as the participants, reflecting their preferences rather than your inventory.

Certainly, you should include your products and services as reward options. Other in-house perks, such as branded apparel, account credits, free shipping, marketing tools, co-op dollars, and training, are also great ideas. But to truly engage and motivate your customers, an effective program will also include popular third-party rewards. Items should include sporting goods, electronics, household items, home office supplies, and automotive accessories, as well as retailer gift cards, prepaid credit cards, and experiential rewards such as trips, events, and travel packages. This comprehensive mix makes your program universally appealing, enhancing customer satisfaction and loyalty.

A group of people are sitting at a table with plates of food and wine glasses.

A woman wearing headphones is standing on the side of the road.

A woman is holding a credit card and a cell phone while using a laptop computer.

Managing such an extensive reward offering is a significant undertaking that exceeds the capabilities of most DIY platforms. Stocking, picking, packing, shipping, and tracking a diverse array of rewards requires significant resources and expertise.

A managed program should offer a highly customizable reward fulfillment solution. It allows you to seamlessly integrate thousands of reward choices for your customers, including your own products and services, as well as third-party options. In doing so, you provide a seamless and universally appealing reward variety that will generate more customer satisfaction and drive more customer loyalty. The managed program will take care of the logistics, from reward fulfillment to transaction reporting, allowing you to focus on what matters most—building stronger relationships with your customers.

7. Brand loyalty is built, member loyalty is earned—best-in-class customer service is a must

A woman wearing headphones is smiling and looking at the camera.

Your customer rewards program can have all the right pieces in place, and everything can go well… until it doesn’t.

We’ve all pulled our hair out interacting with software-driven, automated support emails and pre-recorded multi-menu helplines, trying to resolve some frustrating aspects of our daily routines. This is not what you want your loyal customers to go through—ever. But if you have thousands of loyalty members, how do you handle the inevitable calls and emails that arise when people forget passwords, want to check the status of their missing points, or have not received their new set of golf clubs?

The last line of defence for your loyalty program is customer service – the ability to quickly and easily connect with a sympathetic audience or friendly voice who will help navigate any issues or problems your loyal customers are having while interacting with your reward program.

A fully managed program will fill that role for you, taking the worry and staff time off your shoulders with prompt responses to email and telephone inquiries.

8. Understanding the loyalty program effect on customers and YOUR bottom line—the power of program impact reporting

A laptop computer with a graph on the screen.

An effective customer loyalty program should be more than just an engagement tool—it should be a significant profit center for your business. By reducing churn, boosting customer loyalty, increasing retention, and driving sales growth, a customized loyalty program can help you achieve and exceed strategic sales objectives and expand your overall corporate profitability.

Much like the data analytics requirements for a program, robust ROI impact reporting involves numerous calculations and the experience to understand the results. Most DIY programs offer basic insights into average participating customer behavior, but B2B loyalty programs provide comprehensive, in-depth impact reporting. Many will include year-over-year trends, vendor participation, seasonal offers, and potentially many other variables.

There’s a lot to consider and measure. You need to review a significant amount of data, incorporating complex factors such as seasonality, price increases, extreme weather events, as well as economic factors like tariffs, supply chain disruptions and pandemics, to truly understand how your reward program has performed in its quest to drive loyalty and profitability.

To accurately measure the success of your loyalty program, you’ll need to look at pre-program sales data for a year or two prior to launch and continue to compare those historical benchmarks with ongoing sales data as your program evolves.

Lastly, you’ll want to compare reward-earning customers with those who don’t join your program to provide statistically significant clarity on the impact of the reward program.

Managing this level of data analytics is no small task—it requires dedicated resources and expertise. It’s a full-time job. A full-service program will offer a range of reports and dashboard options, providing you with an immediate and clear understanding of how your reward program is delivering against its goals, whether they are short- or long-term. This customized approach ensures that your loyalty program not only meets but excels expectations, actively contributing to your bottom line.

SaaS vs. fully-managed programs—the final word

Your B2B loyalty program should be one of your company’s most valuable sales tools and corporate assets. Properly structured and managed, it will deliver incredible value to your organization, generating better customers and attracting new customers, while supporting both long- and short-term sales objectives. It should be performance-based (no purchasing equals no reward costs), unlike almost all other sales and marketing strategies.

Different companies pursue different paths toward introducing and using a B2B loyalty program. Some individuals will choose to do it themselves, often without the tools mentioned in this article or the necessary expertise to achieve optimal results. Others will hire a full-service B2B reward program provider to build, launch, manage, and optimize their program, bringing with them highly developed tools and experience to ensure the program’s success.

We are in the most highly competitive economic climate of all time and customers are more aware of competitive options and offerings.

Consider these statistics in the Salesforce State of Marketing, 9th Edition 2024:

High performing marketers are 1.5x more likely to leverage their customer data platform than underperformers.

High performing marketers are 1.3x more likely to use marketing analytics and artificial intelligence than underperformers

Can you employ a DIY approach for your B2B customer rewards program, doing your best and learning as you go? You certainly can—but is that the right path if your key competitors decide to pursue a professionally designed, best-in-class program and hit the ground running?

Consider one additional finding in the Salesforce study, State of the Connected Customer 2023:

84 % of customers say the experience a company provides is as important as its products and services

Lift & Shift is ready to help you reach your sales and marketing goals with a customized, full-service program. Contact us, and we can show you how to get the most successful loyalty program management for your business.