Breaking Down the 5 Types of B2B Loyalty

Loyalty can seem simple, but just like customers, it’s not a one-size-fits-all. While a B2C approach has the luxury of creating a program that will likely succeed from the virtue of the volume of a wide-spanning customer base, B2B organisations, unfortunately, do not share this.

Due to B2B organisations being smaller and decisions taking longer and requiring more input than just a single decision-maker, a successful B2B loyalty or incentive program requires the ability to communicate directly with customers the way they would like to be communicated with.

This sounds like a big ask, but the amount of data available from B2B purchasers based on relationships, purchase frequencies and market competition allows B2B organisations to gain far more insight into their customer base – something that B2C programs would kill for!

That’s where something like our Engagement Loyalty Model shines – using the data gathered from your customer base, we can sort program participants into customer persona cohorts, allowing you to segment your communications and program highlights to be selectively distributed to these sections in the way they want to receive them to maximise engagement with the program.

So, what are the ways that loyalty plays out, and how can you best maximise the ROI from your program in response to these? Let’s break them down!

Types of B2B Loyalty #1: Price-Induced Loyalty

The first form of loyalty can be the easiest to capture, but the hardest to retain over time. Price-induced loyalty is exactly what it says – it’s loyalty to the lowest price. These customers respond to price-cuts and discounts but will likely move away from your brand once they find a lower price.

This can be a liability, as competition can generally sway these customers away by undercutting your price. These customers are not loyal to your brand, but this is where your program can step in. By demonstrating how you supplement price with additional value, you can potentially lure them into staying with you – demonstrating that loyalty is a two-way street!

Types of B2B Loyalty #2: Relationship loyalty

This is the type of loyalty that B2C programs are envious of! Considering that B2B sales are supplemented by regular interactions with sales and support teams, it’s no wonder that the relationship between seller and buyer is so much more personalised.

These relationships are mutually beneficial, as on a long enough timeline, everyone knows where they stand, and the partnership offers a level of trust that can circumvent purchase barriers such as negotiations and contracts, leading to long-term mutual success.

Types of B2B Loyalty #3: Transactional loyalty

If you have a customer who is only interested in the value of a product or service over who the seller is, then you’ve likely dealt with types of transactional loyalty in the past. These are largely functional and can be quite common in B2B purchases.

These can be illustrated through the share of wallet you command from your channel partners, as well as the frequency and value of the purchases they make. With customers like this, you need to find ways to cultivate more business purchases, as well as giving customers good reasons not to look elsewhere, in terms of alternative products or suppliers.

You can’t build this type of loyalty through an emotional connection to the brand, but with a strong B2B loyalty strategy, your program can help develop a source of value to the customer’s business, nudging them to shift a portion of their share of wallet.

When your strategy builds on winning customers’ hearts and combines with additional value in purchases, these group will usually stand by your brand as a customer retention goldmine.

Types of B2B Loyalty #4: Emotional loyalty

Emotional loyalty is more commonly found in B2C purchasers, and is based around a psychological preference, but that doesn’t mean it can’t be found in B2B interactions.

This can be nurtured through positive associations with a product or brand, which is perfect for a brand with a successful B2B loyalty program. You can cultivate devotion to your company by building an understanding of what your customers want from your company and creating a personalised interaction with them.

A well-executed incentive program can create fans of your brand, through travel incentives for high performers or aspirational rewards from a loyalty program, linking in with a sense of accomplishment. Trophy value – the concept of providing them with something to display and brag about – is a great way to create emotional loyalty.

As decision-makers in B2B companies begin to skew younger with a generational shift, this can also be complemented by shared values, such as sustainability and environmental conservationism. By linking shared values and ethics, you can create a connection between businesses that can move beyond product, but this requires knowledge of the people you’re doing business with.

Types of B2B Loyalty #5: True customer loyalty

If your brand could hope for one type of customer loyalty, this is the one to strive towards. This goes beyond pricing, transactions, and emotions, and instead leans into a trait that develops over time – trust in the brand.

True customer loyalty means you don’t have to worry about competitors, because you’re aware of the strength of your two-way exchange of value between your brand and your customers. Instead, your brand provides a sense of belonging, and lets your customers know that you have their best interests at heart.

It’s one thing to understand the five different types of loyalty, but it’s more important to be able to know how to harness them to secure growth in your business, and which ones will respond to the customers you have now.

We can work with your business to determine the best approach to take to connect with your customer base, as well as the best programs to incentivise the behaviour change that you’re seeking.
Whatever the variables, one thing remains true to all cases – a successful B2B loyalty or incentive program has to encourage and nurture personal and relevant relationships to achieve true loyalty.