Loyalty Programs for Customers and Channel Partners


Mar 9, 2023 • 7 min read

Loyalty Programs for Customers and Channel Partners

Customers play a crucial role in helping businesses achieve their goals, including both end-customers and channel partners who serve as B2B customers for many companies. 

Without them, companies across all industries would face difficulties maintaining a steady cash flow, ultimately making their businesses unsustainable.

Obtaining customers in today's market can be difficult due to various factors such as intense competition, customers who are sensitive to prices, and unstable global economic conditions. 

One effective approach to retain current customers and attract new ones or channel partners is to create a loyalty program that entices them to participate. 

What exactly is a loyalty program, and how can it be implemented for both end customers and B2B channel partners?

What is a Loyalty Program?

A loyalty program is a program designed by a brand or company to reward customers and encourage them to remain loyal to their products or services, according to Investopedia. 

The main objective of a loyalty program is to retain existing customers, prompting them to continue making purchases and attract new customers. 

Loyalty programs can take various forms, such as loyalty points, membership programs, physical gifts or e-voucher rewards, discounts, buy 1 get 1 free offers, exclusive access, and more. 

To implement a loyalty program, businesses can choose from different types of loyalty programs based on their customer base and objectives.

Differences in Loyalty Programs for Customers and Channel Partners

Loyalty programs can be categorized into two types: loyalty programs for end customers and loyalty programs for channel partners.

Customer Loyalty Programs

Loyalty programs for customers are widely available and easily recognizable in various businesses such as cafes and restaurants, clothing stores, cinemas, airlines, hotels, and many others. These loyalty programs are directly targeted at end consumers as their members.

Channel Partner B2B Loyalty Programs

On the other hand, loyalty programs for channel partners are closely related to companies that collaborate with B2B partners. 

In general, manufacturing companies such as FMCG, automotive, building materials, and others have complex distribution channels to bring their products to the hands of end consumers.

Although some companies use direct selling or direct-to-consumer (DTC) sales methods, many rely on channel partners in the supply chain as intermediaries between the manufacturer or supplier and the end customer. 

Channel partner loyalty programs are designed to target various partners involved in the supply chain such as distributors, retailers, sales representatives, SPGs (sales promotion girls/boys), and other partners.

Benefits of Loyalty Programs for Businesses

Loyalty programs can offer many short and long-term benefits to companies that implement them effectively. 

Here are some of the advantages of loyalty programs for businesses in achieving success:

1. Boosts retention

Loyalty programs can help improve customer and channel partner retention by providing incentives for repeat purchases or use of services, leading to positive experiences and satisfaction in every transaction.

2. Increases loyalty

By providing incentives, loyalty programs can also encourage customers and channel partners to become more loyal to the company, leading to repeat purchase and positive word-of-mouth referrals, which can impact the company's revenue positively.

3. Improves purchase frequency

Loyalty programs can encourage customers and channel partners to make more frequent purchases in order to earn points or incentives that can be exchanged for attractive rewards like gifts or member discounts. This can help the company achieve sales targets and increase its bottom line.

4. Increases basket size

Attractive incentives or benefits can motivate customers and channel partners to make larger purchases, which can increase the company's revenue and help achieve sales targets.

5. Builds customer advocacy

If the rewards and incentives offered by a company are appealing, customers and channel partners are more likely to recommend the company's products or services to others, creating positive brand awareness for the company without additional advertising costs.

Types and Examples of Loyalty Programs

There are various types of loyalty programs commonly implemented in different industries, some of which are listed below:

1. Point-based loyalty

In this type of loyalty program, customers and channel partners earn points through purchases, social media shares, reviews, and special events, which can be redeemed for various rewards offered by the company. 

Examples of point-based loyalty programs in Indonesia include:

2. Tiered loyalty

Loyalty programs with tiered membership offer varying benefits and rewards based on the member's tier level. The higher the level, the more exclusive and attractive the rewards. 

Examples of tiered loyalty programs in Indonesia include:

  • My ERHA, 
  • Tokopedia,
  • Shopee

3. Paid loyalty

Customers pay a membership fee for exclusive benefits that non-members do not receive. 

Examples of paid loyalty programs include:

  • Spotify Premium
  • Amazon Prime

4. Value loyalty

These loyalty programs aim to establish an emotional connection with customers by combining product purchases with charitable donations. 

For example, Pepsodent Merah Putih Special Edition donates 2.5% of sales profit to support the health and welfare of waste pickers and their families in Indonesia.

Wrap up!

In conclusion, implementing a loyalty program can be a game-changer move for businesses, but it's crucial to design a program that meets the needs of their customers. 

Offering a diverse range of rewards can also entice customers to participate in the program. 

Businesses can either create their own loyalty program or use a platform like Tada, which is effective, efficient, and immediately available. 

Tada, as the leading loyalty and reward platform in Indonesia, offers game-changing solutions for businesses to create loyalty programs for their end customers and B2B channel partners.

Request our demo now to find out how Tada's game-changing solutions can help your business.

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