Companies want their loyalty programs to succeed. Ask any program administrator and they’ll agree that ensuring their program is working smoothly and achieving objectives is their top priority. However what some of them don’t realize is the subtle ways they might be holding their own programs back.
Loyalty and incentive programs have been around for a while, long enough that most people recognize them and the basic principle they follow: do something, get a reward. B2B loyalty and incentive programs especially follow this model and for good reason. It’s worked so well and for so long that program administrators can find it hard to build an argument for redesigning their program in any significant way. “If it ain’t broke don’t fix it” as the saying goes.
The downside with that old saying is that at some point, not fixing what’s “not broken” can actually lead to your program breaking over time.
The Problem With A Stagnant Program
The trouble with a program essentially staying the same and never changing is that people, quite simply, do not. Customers and businesses are constantly growing and evolving, even in B2B industries where long-term relationships and lengthy buying cycles are a norm. As we already discussed, B2B buyers are more likely than ever to switch to a new supplier if their existing one no longer meets their needs or expectations. A loyalty or incentive program that keeps the same processes, earning rates, reward options, etc. year after year will gradually become less and less valuable to members who are always facing new challenges and changing market conditions. Eventually these customers will reach a tipping point where they find it makes more practical sense to disengage with the program completely rather than stay.
Why Incentive Programs Stall
You might have already noticed early warning signs that your program is experiencing a stall, such as low or declining participation rates, reward redemptions, or enrollment numbers. Here are a few reasons your B2B program might have stalled:
The effort doesn’t pays off
Every program requires some level of effort on the consumer’s part in order for them to qualify for the program benefits, most typically by making a purchase or taking similar actions. Customers know and expect this, and most are willing to put in the time. The trouble starts when the level of effort, time, or money spent on the customer’s part is no longer worth the return the program provides. One instance is when the available reward options or member benefits are no longer valuable or relevant to customers. The cost for materials, labor, operating expenses, and more continues to rise, and as such B2B buyers are looking for how they can get the most value for their spend. If they no longer feel a program is worth the time spent, they'll easily disengage.
Lack of non-transactional engagement opportunities
All loyalty and incentive programs rely on user engagement to succeed. This is true regardless of industry or company; loyalty programs need customer participation in order to have an impact and produce results. However as we discuss in our latest whitepaper “The Business Case For Smarter Incentives,” B2B member engagement needs to go beyond just transactions. If a brand also provides dedicated tools, training, and ongoing support to help customers achieve their goals (on top of a reward program), they show themselves as the more desirable option than a brand who only offers rewards points and little else.
Customer experience is lacking
A good customer experience is becoming key to winning sales, and it plays a part in winning customer loyalty as well. Requiring program members to still follow manual processes even when it's more common for such tasks to be automated or keeping outdated point earning rules that no longer align with their spending can contribute to slowdowns in member activity.
How To Give Your B2B Incentive Program New Life
The first step to getting your B2B loyalty or incentive program out of its stall is to focus back on its original purpose - to build relationships with your entire customer base from distributors to end-customers. To build these relationships you need to understand what these individuals find important and meaningful. Then you need to incorporate these factors into your B2B loyalty or incentive program, even if it requires redesigning or refreshing your program entirely. (The benefit is that your brand will end up in a better position to keep optimizing and improving your program in the future.) This is the basic process for creating what we call a smarter B2B incentive program, which you can learn more about in our latest whitepaper.
It’s tempting for program administrators to feel that any changes to a working program will be what causes it to decline. Some brands are wary that any changes will disrupt their current customer audiences and cause them to leave – which is an especially viable concern these days when customer retention is more important than ever. However these fears are precisely what holds B2B incentive programs back from reaching their peak levels of performance and return on investment. In the next blog of our series we will dive into how smarter B2B incentive programs can help solve some of your biggest challenges.
This blog is part of our “Smarter Incentives” series, companion posts for our newly-released whitepaper "The Business Case For Smarter Series" . The series explores the reasoning for why today's B2B incentive programs need to be redesigned to be smarter, and how programs managers can refresh their programs to experience greater success and returns. You can download the full whitepaper for free here.