A loyalty program is traditionally thought of as a consumer facing tool. It provides value to your customer base for shopping with you again and again. At its core you are exchanging loyalty for points and rewards. But, does it have a place in the B2B world?
If you are a B2B ecom website I am going to take a wild guess and say you are using something to incentivise buying in bulk or for ordering more. Most common would be volume discounts, but there are also sales spiffs, incentives, and even prizes. I have seen vacations given to the company who orders the most in a year.
But does a loyalty program have a place in a B2B environment? Yes it does, and here is how to create a good one for Magento!
Problems You Can Solve With Loyalty in B2B
While it is easy to see the benefits of a loyalty program in the consumer space, there are tons of benefits in B2B as well. The same principles apply in B2B, the more customers you retain, the more money you make. Loyalty programs also get customers shopping more frequently (purchase frequency) which also boosts your profitability.
What some people don’t realize is that a loyalty program can actually help you with a few other B2B problems. A loyalty program like Smile.io for Magento allows you to reward based on volume to sell more, profit to make more, and can even give additional perks based on how many purchase have been made this year.
Building a B2B Loyalty Program with Smile.io for Magento
The remainder of this post will give you tips and tricks to build an effective B2B loyalty program with Smile.io’s Magento extension. These tips are all possible with Smile.io, but not necessarily with every provider. Please check with your loyalty extension provider to see if the same is possible with your software. Or you can get in touch with us.
5 Tips to Build The Best B2B Loyalty Program
There is a ton of functionality built into our Magento extension, and we will not be able to go over it all here. Instead I will go over my top 5 tips to creating an effective B2B loyalty program. If you want to see everything our Magento extension can do, you should check out our demo!
Your customers are other businesses. They have their own business to run, they are not looking for all the bells and whistles in your loyalty program. They are more looking to see if you have one, than evaluating how many actions you reward for etc…
This is why I recommend keeping B2B loyalty programs very simple and easy to understand. Your customers want to quickly evaluate if your program provide enough incentive to join. If it does you will become the preferred provider of whatever you sell.
I recommend a program with these 3 features:
This simple program gives B2B customers the basics they need to join your program, without overwhelming them. They are just as busy as you and will not appreciate a really fancy loyalty program like an end consumer would.
Normally I would say that you need a combination of on site communication and email communication. However, B2B loyalty programs are slightly different.
When a customer comes to your site they know exactly what they want, and are looking to be in and out quickly. They basically want ordering through you to be as quick and painless as possible. They want a loyalty program that is set up in much the same way.
Instead of telling these customers everything on site I recommend giving them the details they need in a way they actually prefer, via email. These types of loyalty members don’t want to be bogged down in the details. They want to place an order know they are receiving extra value from your program and get back to the 100’s of other things they are doing.
Send emails to them after every purchase informing them of their current point balance, and anything else you think they need to know. This could be how they can earn bonus points next time, or how many points they are away from their next reward.
Email also allows them to go back and find something easily in their inbox (they are in their all day anyway). This way they can get the details on their own time rather than having to go to your site to find them.
With Smile.io for Magento you can reward bonus points based on how much a customer is purchasing. This becomes an easy way to add value to higher volume sales without having to run a ton of separate programs.
The two best ways to do this are to give bonus points based on what is in the cart at checkout. You can reward bonus points for orders that have over a certain amount of items in the cart. Or, you can reward based on the dollar amount of the cart, for example if you order over $15,000 you will receive an additional 5,000 points. This usually works better in B2B loyalty programs as your customer may be buying a single large product, but you want them to choose the slightly more expensive one, like safes, cash registers, etc…
You are approaching your quarter or year end and are noticing you are short of your sales goals or projections, what do you do? You use your loyalty program to incentivize purchases at key times.
With Smile.io for Magento you can run extra point events to stir up some sales. You can email your members list and let them know that this week, weekend, or day you will be offering 3x (or whatever you choose) the number of points on each purchase. This gives your customers an incentive to shop during a key time of year for you.
Tiers are milestones that a customer can cross to become enrolled in a new group that can be given different things. Essentially you can use tiers to segment loyalty members based on past interactions with your site. Our Magento extension will automatically add customers to the new tiers when they pass your specified milestone.
If you want more information on tiers, I would read “Why Tiers Are Great for Loyalty.” But for this post I will go over how you can make tiers effective in a B2B loyalty program.
Many B2B sites will offer spiffs of prizes for customers who purchase a certain amount either in a year or over the course of their lifetime. With Smile.io you can set milestones so that when a customer spends a certain amount they are moved to the next tier and can receive additional benefits.
Popular benefits we have seen used in B2B loyalty programs are:
- Bonus points on each order in every new tier
- A percentage off that increase with each tier
- Free shipping at a certain tier
- Huge bonus point reward at a milestone
The first three tier rewards are great because they encourage customers to strive for that tier to get the reward. When they get there you will be giving them more, but the rewards also encourage them to order from you more often. They get more the more they order!
The last recommendation is used as more of a traditional sales incentive. If a customer spends X amount of dollars, you reward them with a huge point bonus, enough to claim a big corresponding reward. This prize could be a trip, sports tickets, or whatever you choose.
The beauty of giving points for each purchase is that you are not giving a gift for the purchase, you are giving points. A lot of purchasing managers are not aloud to accept gifts for a purchase, but they can accept discounts/points. They can accumulate these points and buy the gift themselves.
The Best B2B Magento Loyalty Program
The above tips and tricks are designed to help you build an amazing B2B loyalty program. Please keep in mind these tips are designed for Smile.io’s Magento extension. If you have any questions about building a B2B loyalty program for your Magento site please feel free to reach out to us.