B2B Loyalty Programs: The Key to Channel Partners Retention


Jan 12, 2023 • 8 min read

B2B loyalty programs key to channel partners retention

Loyalty incentives are a powerful tool for boosting sales in B2B businesses. These rewards programs recognize and reward the loyalty of a company's channel partner, like distributors, dealers, retailers, etc, encouraging them to continue doing business with the company and helping to drive revenue.

Companies that rely on partners to market their products and services in particular should be aware of best practices when it comes to implementing loyalty programs. It’s because incentivizing existing loyal customers is crucial for driving sales and increasing revenue.

Maintaining customer loyalty is also essential for retaining customers and building lasting B2B relationships. To achieve this, companies must make an extra effort to reward and recognize their loyal clients.

Understanding B2B Customer Loyalty Programs

B2B customer loyalty programs are a way for businesses to attract and retain their B2B customers, like distributors, dealers, wholesalers, retailers, field teams and many more. These programs can help a business grow its customer base and keep customers coming back.

B2B loyalty programs differ from B2C programs in that they are selective about who can join. Rather than focusing on the needs of individual consumers, B2B loyalty programs are designed to address the concerns of decision-makers. The ultimate goal of these programs is to support the mutual growth of the business from both parties.

The Many Advantages of B2B Loyalty Programs

B2B loyalty programs offer numerous advantages for businesses from any industry. These programs can help businesses create motivated, repeat customers and help businesses to make informed decisions about product development and pricing.

Discover the many benefits of B2B loyalty programs here:

1. Higher Customer Retention

Price is an important consideration in B2B purchases, but the customer's experience is also a factor. B2B customers value the post-purchase experience, making loyalty programs a more effective way to retain them than price-based discounts or rebates.

2. Increased Sales and Profits

Businesses that invest in B2B loyalty programs tend to see increased sales and profits as a result. These programs create motivated B2B customers who are more likely to make repeat purchases. In addition, B2B loyalty programs can result in increased order sizes because the customers want to reach a higher tier and better rewards and benefit options. 

3. Enhanced Brand Awareness and Referral Opportunities

Loyalty programs can also help increase brand awareness and generate word-of-mouth referrals. Customers enrolled in these programs are more likely to interact with and be exposed to the brand, which helps keep it top-of-mind.

4. Customer Data for Better Business Decisions

B2B loyalty programs provide valuable data about customers that can be used to improve the customer experience, better targeted marketing campaigns, and help business to make informed decisions about product development and also pricing.

Well-known Types of B2B Loyalty Programs

There are a variety of types of B2B loyalty programs to choose from, and the right program for your business will depend on your goals. Some popular options include:

1. Cashback incentives

In a cashback or rebate program, B2B customers like distributors, dealers to retailers earn rewards based on their purchases. The more they spend the more cashback or rebates they receive. This type of program is effective for businesses that want to encourage their B2B customers to increase their spending.

2. Points programs

Points programs offer B2B customers the opportunity to earn points that can be redeemed for various rewards instead of cashback or rebates. This type of program is suitable for businesses that want to offer their channel partners with a range of reward choices.

3. Tier-based programs

Rewards in a tier-based program are based on a B2B customer’s spending. In B2B loyalty programs, the more a customer spends, the higher their tier and the greater the rewards they receive. These programs are designed to encourage channel partners to spend more in order to reach the highest tier and earn the best rewards.

12 Best Practices for Effective B2B Loyalty Programs in 2023 and onwards

  • Clearly define the goals of the loyalty program and how it will benefit your distributors, dealers, retailers and other channel partners.
  • Identify and understand the target audience for the loyalty program, including their specific needs and preferences.
  • Offer a wide range of rewards that are relevant and desirable to the target channel partners.
  • Communicate the benefits of the loyalty program effectively to potential channel partners through various channels.
  • Make it easy for channel partners to join and earn rewards, with simple and straightforward rules.
  • Offer multiple ways for channel partners to redeem their rewards, including both tangible and intangible options.
  • Monitor and analyze the performance of the loyalty program to identify areas for improvement.
  • Make adjustments to the loyalty program as needed based on performance data and feedback from the members.
  • Regularly engage with loyalty program members through various channels to keep them motivated and loyal.
  • Utilize loyalty program data to optimize pricing strategies.
  • Leverage social media and other online channels to engage with loyalty program members.
  • Provide excellent customer service to loyalty program members, including timely and helpful support.

B2B Loyalty Programs Example:  L'Oréal Indonesia 

Loyalty programs for B2B customers are not new. There are big brands that have their own loyalty programs to maintain mutual relationships with their B2B clients or customers to achieve business sustainability even when the economy is in shambles. And for Tada, we’ve experience in helping L'Oréal Indonesia to create new income streams through their channel partners.

L'Oréal Indonesia was facing difficulties due to the pandemic, as their distribution channels (hair salons and hairdressers) were required to close to avoid spreading infection. However, Tada, a provider of loyalty and rewards solutions, came in to provide a digital solution that helped the brand continue to sell products through their channel partners while they were unable to operate normally.

Specifically, Tada offered a social commerce or virtual franchise platform that allowed the brand to turn their channel partners into resellers and own virtual stores to sell the products to end customers without needing physical involvement.

This helped hairdressers and hair salon owners to continue to generate income while staying safe at home, and leveraged their expertise in hair treatment as well as their regular customer network to sell professional hair care products to end customers through a virtual link store shared through social media or messaging apps.

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L'Oréal Indonesia’s journey with Tada started in October 2020 and allowed it to get a 468% increase in revenue and 452% in sales from social commerce programs compared to before they opt for social commerce with Tada.

The brand's resellers also increased by 115% from previous quarter which indicates a significantly positive impact of the program to its growth during the pandemic. These positive results demonstrate that offering incentives to channels has played a significant role in promoting the brand's expansion and growth.

So, How will you Start your B2B Loyalty Programs?

A successful B2B loyalty program begins with defining objectives and target customers, providing valuable rewards, creating program rules and mechanics, promoting the program, monitoring and analyzing results, and continually optimizing the program. Businesses can also consider outsourcing the program to a specialized B2B loyalty company to benefit from their expertise and resources. 

With over 10 years of experience in creating loyalty programs for businesses, Tada game-changing solutions to improve customer relationships and drive sales.

Request our demo now to find out more about how Tada helped our clients to change their loyalty & incentive game and how our solutions can be just as game-changing to your business.

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