Is a customer loyalty program the key to sales success?

Posted in Customer relationship management.

One of the truths every company has to take to heart is the fact that it is cheaper and less arduous to retain existing customers than it is to recruit new customers. In the B2B market there are a lot of competitors vying for attention and your current customers could very likely become a target if you do not find a way to keep them loyal to your products or services.

This is where a customer loyalty program could come in handy. A loyalty program refers to a system where customers are rewarded for displaying certain kinds of buying behaviour that are beneficial to the company. You set certain goals for the customer to reach and then give them something in return for reaching those goals.

A loyalty program is advantageous for many reasons. Not only does the customer get something from the company for doing specific things (which creates a positive association for them) but you, as a company, receive their loyalty and commitment in return. This type of program may also help to:

  • Differentiate you from competitors because what you create will be unique. You may be giving them rewards that the other companies do not.
  • Improve customer relationship management.
  • Create an information exchange that can be used to optimize processes within the company.
  • Track customer information and behaviours for future research.

Before you even think about what your customer loyalty program will look like, you need to identify your key customers. Then you need to track these customers’ activities over a period of time to see what actions they partake in more frequently than others. Also find out what made previous clients stop doing business with you. One of the reasons may turn out to be a lack of incentives. Remember that each client is different and they thus need a unique program to suit them. Some clients respond better to rewards than others.

There are different types of loyalty programs. Here are some of the more popular ones you can think about implementing:

Points system

This is the most common program. If, for example, the customer makes purchases that equal a certain amount, the customer gets points that equal those purchases (based on the point system you developed). When the customer reaches a certain amount of points, they get rewarded accordingly. It will only work in a company where there are frequent, small purchases. It may not be beneficial for B2B companies that have expensive products that are purchased infrequently. In such a case it will take too long for customers to rack up points and make them not want to aim for it.

Tier system

You start your customers out on an entry-level tier, which still has benefits but not as much as those on the upper tiers. As people do certain things or achieve certain goals, they can move up a tier and thus receive greater rewards. This provides the customer with a sense of achievement. Ensure that you have a special page that explains this tier system to your customers in a clear way. One of the things companies should avoid with this type of program is making the act of reaching each level too difficult. If it seems like too much work or feels unattainable, customers will not make an effort to work towards it. The great thing about a tier system is that it implies a more long-term customer relationship.

Social initiative system

Seeing as a lot of customers nowadays look for a company with a social conscience, this simple system is great for your company reputation. You choose a cause that is close to your company’s heart and that matches your value system (it must match what you do). For example, if you support environmentally-friendly manufacturing processes, you choose a charity that deals with this issue. Then as soon as a customer does certain things, an amount of money can be donated to the charity you have chosen.

You can even tie it into your points system so that perhaps the customer gets to decide the action that should be taken after a certain amount of points has been earned. The customer thus feels like they are doing something good. Don’t make the system such that you take away all of their points and give it away. After all, they have worked hard for it. Perhaps only donate portions (if they choose this option) or promise to donate out of your own pocket at no cost to the customer.


You can partner with other companies that are in the same sort of industry as you or have products that complement yours. This may help to rule out some competitiveness because the customer doesn’t have to choose another company over you or vice versa. As an example, if a customer buys something from both you and your partner, they get a reward for that action. People like to have choices and this is one way of providing it.

Gamify the program

Yes, B2B companies need to uphold a professional image but sometimes showing your human side helps to put customers at ease. You can reward customers by providing them with a chance to participate in a competition if they do certain actions in a certain time or in a certain way. You can provide them automatic entry into a lucky draw or something similar. Or even challenge companies that buy from you to compete with each other in a friendly manner to decide what charity is donated to (another way to combine two different programs).

A customer loyalty program may not be the answer for every B2B company (it is, after all, more prevalent in the B2C market). Preferably do your research first to find out if your customers will indeed be interested in it and then ask what kind of program they would prefer. Also, what kind of program will suit you, as a B2B company, the best? What can you afford to do? What resources do you possess to allocate to such a program? How can you make it unique to separate you from competitors? Even though it’s not a must, it’s an option that can help you retain loyal customers over long periods of time.