Customer Loyalty FAQ

What is customer loyalty and retention?

Customer loyalty is the likelihood that a customer will choose your brand over the competition. Loyalty can be measured by a combination of order volume, order frequency, and the duration over which a customer buys from your brand.

Customer retention is the strategy of building loyalty with customers and giving them a reason to consistently choose to buy from you instead of exploring their other options.

Why are customers loyal to brands?

Although cost and convenience play a role, B2B customer loyalty is often rooted in factors that extend beyond business deliverables. These include:

  • Personalized Value
  • Expertise and Service
  • Trust
  • Shared Core Values
  • Connectivity and Availability
  • Authenticity
  • Engagement
  • Fun and Perks

Additionally, B2C experience have shaped how B2B buyers evaluate brands. Today’s B2B customers expect intuitive digital experiences, omni-channel communication, and customer-centric service.

How do you build customer loyalty?

A customer loyalty program is an effective way to convey the values that B2B buyers care about and educate them on your brand and your products. Customer loyalty rewards help personalize relationships and create emotional investment from your buyers. Modern customer loyalty platforms provide digital hubs where customers can interact with your brand and receive omni-channel communication that feels relevant to them.

Since many B2B businesses do not offer the kind of customer experience today’s buyers desire, a customer loyalty rewards program is an effective way to differentiate your brand, gain market share, and build customer loyalty.


Do loyalty programs work?

According to MIT Sloan Management Review, members of a high-performing customer loyalty programs are:

  • 77% more likely to choose your brand over the competition.
  • 115% more likely to provide referrals.
  • 78% more likely to pay higher prices for your products.
  • 91% more likely to increase their overall spend.

Why are customer loyalty programs effective?

B2B customer loyalty programs help you become more than a “commodity supplier,” by giving you the tools to engage, communicate, and build personalized relationships with your customers. Customer loyalty program increase customer engagement, which has a positive impact on profitability.


Do loyalty programs increase sales?

Based on multiple case studies with hundreds of clients and thousands of participants, internal Incentive Solutions case studies have shown that B2B loyalty programs can increase sales from 15% to 319%. Generally, the more targeted the promotion and the smaller the audience, the greater increase will be from a percentage standpoint. However, a 15% increase across a massive group of customers can represent a substantial increase in revenue.

Beyond increasing sales, other possible outcomes of B2B loyalty programs include:

  • Building mindshare and brand awareness.
  • Improving customer retention.
  • Changing buyer behaviors to lower cost-to-serve and customer response times.
  • Inspiring B2B customers to provide referrals or to provide valuable sales and marketing data.

    How do you market a loyalty program?

    Effective loyalty marketing starts with having a great value proposition for your customers. The average American is a part of over a dozen customer loyalty programs. Of those, they only participate in about half. What this means is that you have to present compelling rewards that feel important and personalized to your buyers.

    Having great rewards will give you plenty of collateral for effective loyalty marketing. Today’s B2B buyers expect you to deliver engaging, omni-channel experiences. Creating an online platform that your buyers can easily access from their laptops or cellphones will improve your registration process. Gamification – such as scratch-offs and spin-to-wins – during the onboarding process can also improve engagement by making your loyalty and rewards program fun and meaningful from the start.

    Finally, you will want to spread the word! Emails, mailers, SMS, phone calls, and attaching reward point certificates to your products or instruction manuals, are all ways to get buyers excited about your loyalty program. Tradeshows and conferences are another avenue where you can market your customer loyalty program.


    How do you maintain customer loyalty?

    An effective way to maintain customer loyalty is through a customer loyalty rewards program. According to a study by eMarketer, 79% of customers say that loyalty programs motivate them to continue doing business with certain companies. Once you have customers enrolled in your loyalty program through effective program marketing, it’s important to continue engaging them to maximize participation.

    The key focus of your loyalty program should be building emotional connections with your customers. Increasing emotional connections with your customers by 5% can reduce your customer attrition by 4%, increase customer advocacy by 6%, resulting in a 50% increase of same-brand sales growth.

    Here are a couple tips for using a customer loyalty rewards program to maintain customer loyalty:

    • Provide regular communication through the multiple channels your loyalty program provides, such as notifications on your participant loyalty website, reward redemption invoices, automated email, and push notifications to make sure your customers feel connected to your brand.
    • Use compelling, personalized experiential and non-cash rewards to create emotional connections with your customers.
    • Use interactive quizzes, trivia, and content marketing to educate buyers about your brand. Focus on what makes you different and how that differentiation makes you a more valuable long-term asset to your customers.
    • Switch things up! Scheduling limited-time promotions for bonus points, assigning big point bonuses for certain products, or offering discounts on certain rewards, is an effective way to reengage customers and give a boost to participation.

    What are the benefits of customer retention?

    Customer retention boosts the lifetime value of a customer and helps companies reduce overhead. Consider the following statistics.

    • A 5% increase in customer retention can increase profitability by 25% to 95%.
    • Long-term customers spend 67% more than new customers.
    • Repeat customers are 60% to 70% more likely to convert in the future.
    • Acquiring a new customer is up to 500% more costly than keeping a current one.

    What is volume incentive rebate?

    Volume incentive rebates are discounts provided to B2B customer, which scale based on order quantities and are rewarded to the customer after the customer has already paid the full price. In other words, the more a customer orders from you, the cheaper their price. This is part of a sales strategy to incentivize B2B customers to buy in bulk. The delay on their discount is in place to prevent customer from “gaming” the system by buying less than the volume they were quoted for.

    Why do loyalty programs fail?

    Customer loyalty programs can fail for several reasons:

    • Ineffective program marketing.
    • Poor user experience and not enough ease-of-use.
    • A lack of omnichannel customer engagement strategies.
    • Other loyalty programs offer more compelling rewards.
    • Reward fulfillment is too slow to meaningfully shift behavior.
    • Goals are unattainable or unrealistic for most members, or reward-earning opportunities are too infrequent.
    • There isn’t a space for customers to provide feedback.
    • The program grows stale due to a lack of reengagement strategies or new loyalty promotions.

    Learn from our incentive experts by downloading one of our free ebooks!

    Manufacturer Incentive Ebook Release

    Incentive Program Secrets for Manufacturers

    An exploration of the challenges facing manufacturers today. Arm yourself with actionable advice for identifying where (and how) incentives can make the biggest impact in your channel.

    Incentive Program Playbook

    The BthruB Incentive
    Program Playbook

    A step-by-step outline for structuring your incentive program for sustainable ROI. Download your copy to learn more about the latest in incentive strategy!

    Incentive programs guide

    Guide to a Successful Dealer Incentive Program

    A succinct guide for creating a successful channel incentive program. Download your copy to learn more about how to use incentives to increase sales across your distribution channel.