First impressions might be that customer loyalty programmes have come a long way since the days of exchanging points on credit cards for obscure kitchenware. Tesco Clubcard is one of the best examples of how far the discipline has come in the consumer world, with its use of a key-fob, tailored promotions and clever integration with its successful website (so that doing the weekly shop is now but a three-click exercise).
Tesco’s success is down to what it does with its data, not so much in a marketing sense, but from a customer service perspective. Not only do most people hate treking to supermarkets in their precious free time, they also resent repeating time-consuming activities. For many, the appeal of the Tesco Clubcard is not so much the ability to redeem points against something they really want, it’s because Tesco strips down the shopping experience to something vaguely tolerable. It is using the data to help its customers in more than a discount-driven way. It is saving them time as well as money.
Yet in the business world, customer loyalty schemes are still playing catch-up and many marketers have failed to appreciate that B2B customers’ buying priorities are more complicated.
Loyalty within B2B is not something that can be enabled by simply providing a ‘points-make-prizes’ offering, says Phil Thomson, MD of incentive programme specialist Loyaltynet. Successful schemes are about underpinning existing business relationships and must be a component part of a much wider strategy. Offering a loyalty programme in isolation can actually do more harm than good too, he adds. Customers may assume that if rewards are being offered, there is scope for prices to be further reduced.
Making individuals or groups within a business more effective in how they sell or promote product and services as part of an incentive programme is where the real benefits lie.
In a B2B environment, especially where there is a multi-layered sales channel involved, marketers need to have multiple points of influence. Each decision maker in the purchase process may be driven by very different criteria. Working out what influences these different points of contact is crucial to success, according to Stuart Evans, general manager at loyalty specialist ICLP.
In the hi-tech industry, this may involve providing market development funds, training or demo products to the channel partners and then points, vouchers or low-value rewards to individuals, he explains. Another example might be a hotel scheme, where personal incentives are offered to front-line staff to encourage them to enrol a target number of customers into a club.
It’s about knowing the results you want, the people you need to influence, and what drives them, Evans says, In a B2C context, loyalty schemes tend to be about enhancing the end user’s experience (the champagne you’re served on a flight, for example) but in a B2B environment, it’s more about service guarantees. If you’re in control of the company travel budget but don’t fly much yourself, you’re not going to be swayed by in-flight extras. Your priority will be that staff arrive on time, that they suffer no delays or downtime and that the overall cost is competitive.
‘Blended incentivisation’, which considers buyers’ priorities from every angle, is key to changing buying behaviour. Rewards must be of value to each audience, says Oliver Davies, general manager for coalition marketing at BI, which specialises in managing aggregated loyalty schemes that serve the interests of multiple players.
One reason some loyalty schemes have had difficulty in achieving success is the lack of numbers and strength of the brands involved, he adds. Where loyalty schemes only include one, or a small number of brands, customers are quick to lose interest, as the process of collecting points is slow and it takes a long time to earn enough value to claim any sort of reward. Coalition programmes are more likely to be successful because customers can collect points from a large number of brands. Points accumulate quickly and purchasers remain engaged.
