What Are Loyalty Programs And Are They Just For B2B Companies?

To say the last three years have been difficult for global businesses would be an understatement. No matter whether the business is big or small, recent times have made it far harder to attain a solid return, especially with customers being far warier about what they are spending their money on.

With that being said, the last twelve months have seen businesses around the world picking themselves back up. This is mainly down to a strong marketing strategy and recognising how they can continue a solid revenue: return customers.

If the last few months have taught businesses anything, it is that loyalty programs can be crucial for business survival. In 2023, customers are looking for a company that has reliable products that they not only want to stick with but will be rewarded for sticking with in the long run.  

In many cases, however, the term “loyalty program” is mainly mentioned in reference to B2B companies. So what exactly are loyalty programs? Can they really save businesses, and are they just for B2B companies?

The Meaning Of Loyalty Programs

Put simply, a loyalty program is a way for a company to actively reward customers who are loyal to their services. This then helps businesses retain their existing customers and ensure their product sales remain strong.

The reason this is important in today’s business scene is that, according to recent studies, a total of 75% of customers will opt to consume from a company if it offers a reward program. Not only this, but in the knowledge of a rewards program, customers will be more likely to make those repeat purchases, making their lifetime value far stronger and the revenue of the company larger than it would have been without the program.

So Is It Just For B2B?

Although a loyalty program for b2b customers is essential to thriving in a competitive market, the understanding that programs are more important if they are a b2b company is not exactly correct. Over the last two years, plenty of b2c companies – including McDonalds, Nike and B&Q – have utilised a loyalty strategy to keep and build a number of customers, with the rewards and benefits offered responsible for strong returns throughout 2022 and into 2023.

No matter whether you are a B2B or B2C company, acquiring new customers is a time-consuming – and most importantly, money-consuming – process. Keeping loyal customers, on the other hand, allows a company to reduce churn rate and build a relationship with those consumers that will aid revenue in a number of ways. Not least, if a customer has a consistently good experience with a company – and is rewarded for that ongoing experience – they are more likely to recommend the company to their friends. 83% of consumers trust the recommendations they get from friends, meaning loyal customers will essentially become a free marketing strategy.

A Loyalty Program That Works

It is important, however, that the loyalty program works. There will be no substantial reward for a loyalty program that is not thought through and efficiently considered. Ordinarily, loyalty programs come in the form of special offers, points, gifts, or discounts – made through a subscription-based program, a points program or a cashback program – but it isn’t enough to throw one together and hope it sticks.

The best companies conduct extensive research into their current customers and what they might appreciate as a specific reward. This is typically done through surveys, interviews or by going through a specific rewards program company. Without the appropriate program, customers will not feel personally catered for, and the loyalty rewards will not be enough to keep them in place. It takes time, but the right loyalty program will ultimately lead to the right path and prospects for a company with potential.