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Creating a Loyalty Program That Works

PBS continues to get involved in the community, whether it be a volunteering event or an opportunity to present at a seminar! Joyce Manthay and Cindy Philipson partnered with the AMA (American Marketing Association) of Michiana on January 19, 2016 for an event titled “Creating a Loyalty Program That Works”. They discussed best practices and key strategies for building a loyalty program and engaging customers. By sharing their experience with customer loyalty programs, key points were revealed on what marketers need to consider when designing and launching an engagement strategy.



B2B Blog Series - 3 Different Types Explained

This is the first blog of our “B2B Loyalty” blog series—we’re really excited about it and we hope you enjoy the content. So, let’s get started…

B2B – we hear it all the time in the business world. But let’s get the definition out of the way… According to the infamous Wikipedia, “Business-to-business (B2B) is commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.” So, obviously, the opposite would be B2C or Business-to-consumer.

Loyalty – let’s get that definition cleared up as well… Again, same highly regarded source, “Loyalty is faithfulness or a devotion to a person, country, group, or cause.” Interestingly enough, as you read further about this definition, it’s mentioned that many argue that an object of loyalty should only be a human being… but we very frequently use the term “Brand Loyalty” in the marketing world—And in this case, the object of loyalty would be a brand… definitely not a human being. On the contrary, however, humans or people are in fact the driver behind the life of a brand, so humans = brands… right? Ok, enough philosophy on that one… You get my drift.

Let’s dive in… When we put these two words together we get “B2B Loyalty”, hence the reason for this blog. If we consider the two separate definitions above, we can define this combined term as “Dedication to a brand from a business transaction perspective”. Simple, right? Maybe not. We’re here to explain the 3 different types of B2B Loyalty as well as highlight some examples in the real business world of how rewards programs heighten the importance of this topic. So, here it goes:

 

(1) Manufacturer to Dealer

The first B2B loyalty scenario involves a manufacturing company distributing products to dealer companies to sell those products in their region or territory. The dealer and their sales associates are loyal to the manufacturer’s brand(s) when they sell the brand product(s) to their customers. But why be loyal when the dealer has other competitor manufacturer products to sell as well? That’s when B2B loyalty comes to play… here are great examples:

Mack Bulldog Club

According to the related case study, this incentive program is intended for Mack Trucks to reward their dealers and their sales people upon completion of training and sales performance. Mack Bulldog Club is a tiered, points-based program with rewards that include experiences and cash. What does the program achieve? Sales growth and increased market share. All business people praise these terms!

SAP PartnerEdge Loyalty

Bloomberg Businessweek highlights this program in a research case study, explaining the importance of driving channel partner performance. With the SAP PartnerEdge program, partners are being rewarded for activities such as sales and training (repeating trend here, same activities as the Mack program highlighted above). The case study mentions that because there’s an integrated rewards system, the partners are focused on selling SAP’s products and services over SAP’s competitors. That’s loyalty at its best!

 

(2) Company to Company

The 2nd type of B2B loyalty is when a company sells its product(s) or service(s) to another company. The selling company’s client, so to speak, is the buying company who, in theory, purchases from the selling company to assist their business goals and objectives. The purpose of integrating loyalty in this scenario is to show commitment to a client company, and in the end, fostering a long-term buying relationship that retains that company’s business. Here are a couple very good examples of this B2B loyalty relationship:

“U” Premier Loyalty Program

A great example of a loyalty program for B2B clients is highlighted in this Marketing.org article. The “U” Premier program is offered by PHX, a provider of one-stop cost-management services for health-care companies. The company wanted to try something completely different in its industry, so they started a platform that encouraged education and incentives for its client companies. The points-driven, tier-level program (again, another trend) rewards clients based on tenure, claims, and activity completion such as a survey. Among many achievements, the feedback and knowledge gained to realize the potential of better servicing their clients is probably the most important. At the end of the day, the selling company recognizes loyalty of its buying company clients by the noticeable staying power and activity within its precise program.

Starwood Preferred Guest Pro

This is a great example of taking an existing B2C loyalty program (in this case, the audience of hotel guest customers) and expanding it into the B2B space. This Loyalty360 article explains it very well—Starwood Hotels created the Pro version in order to recognize the business received from company meeting planners and travel associates… it’s simple, every time a business event is booked, the company receives rewards points and access to other great benefits. As stated on the program’s page, “Earn for work. Redeem for fun – business has never been so personal.” It’s a genius idea.

 

(3) Company to Employees

The last type is probably the most common… A company shows their loyalty to their employees by recognizing achievements and performance. You will frequently see service awards that reward ‘x’ years of service to the company. However, there is so much opportunity to integrate a full-fledged program with multiple types of recognition… this really creates a positive impact with a company’s workforce. In the end, employees will be highly engaged in their work, and the company will see increased employee retention, and most important, profitability. Here are a couple examples of an employee recognition program:

Scotia Applause

This Scotiabank website link talks a little bit about their industry-leading, international recognition program. The program is structured so that employees can both send and receive recognition based on different values and behaviors. “Applause points” are awarded to be redeemed on the rewards catalog. The online platform also integrates their “Best of the Best” program that highlights their best employees, judged based on four key areas: people, customer, operational and financial. What a great way to engage employees in two-way communication and recognizing leaders within a company organization.

Intuit Spotlight Awards

One of Intuit’s values is “It’s the People”, as mentioned on an Intuit site page. The company truly recognizes that their people are the driving force behind their success, and they’ve made a strategic decision to invest in their recognition program. Another source explains that the program is very versatile making it ideal to reward employees for both small and large achievements, and their rewards can be redeemed for a variety of gift certificates. One differentiator of the program is their “Write Stuff” awards where the communications team is recognized for their writing skills… besides the cash prize involved, what makes this unique is they also get to display their award certificate for all other employees to see.

 

There you have it – 3 different types of B2B Loyalty. Who would have thought? Rewarding for behavior, transactions, and activity is the ultimate opportunity to create true loyalty for the people involved in the business space. It’s the highlight of the (business) game. It’s what makes the (business) clock really tick. B2B Loyalty—now you know the meaning and importance of this concept. And, remember, this is our first blog relevant to this topic…we have so much more to say! Thanks for reading, and check back again for our next blog in this series.