Understanding your current and desired customer behaviours is intrinsically tied to any successful B2B marketing strategy, especially within customer loyalty and sales incentive programs. These behaviours form the foundation of how, when, and why customers purchase from your business – meaning these behaviours define the type of loyalty you can expect from your customers.
Price can affect loyalty, but that’s not all there is. Your customers will seek multiple other benefits and values in your brand, especially in B2B settings where relationships and personal connections carry significantly more weight in deciding where to place their share of the wallet.
What are the customer loyalty categories?
To begin with, we need to define the differences between incentives and loyalty in a B2B context. The two are closely linked: sales incentive programs foster transactions and specific behaviours that a supplier or vendor would seek through rewards.
These behaviours can create loyalty by influencing the relationship instead of basic transactions and creating an emotional connection to the brand. This is the most important part—by reinforcing behaviours, you can change the type of loyalty your brand seeks to build.
Simply launching a customer loyalty program doesn’t guarantee that your customers will respond in the way you need. The strategy behind your program must understand your customer base and be designed accordingly.
The different categories of loyalty can be broken down into five common ‘categories’ of how customers will react to a B2B brand. All stem from individual value propositions your brand can present to your customers through your program.
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Categories of Customer Loyalty
1. Price-Induced Loyalty
Price-induced loyalty is the first thing that should come to mind. After all, every business operates financially, and each company must reduce costs to build margins. Financial aspects are a significant reason for staying loyal to your supplier or vendor through discounts, promos, or special offers.
However, price-induced loyalty is fickle and can be lost as quickly as it’s won. Suppose your customers only buy from you because of your price. In that case, losing them to a competitor can be easy, as they reduce their price or provide other financial motivations to switch.
Short-term discounts may lead to a temporary sales movement, but why would they stay with your brand after the discount ends? When your only form of customer value is financial, there’s no guarantee that the customer will remain with your business. Your way of cultivating a change in customer behaviour needs to offer more.
Price-induced loyalty doesn’t fund lasting relationships, especially within B2B markets. So, how can you build relationship loyalty?
2. Relationship Loyalty
B2C markets would love to get the type of loyalty cultivated through long-standing B2B relationships. Every customer loyalty program wants to cultivate consistent, constant purchases from existing relationships between the business and its customers – something B2B markets can strengthen with the way they can set regular meetings and share experiences.
By creating a positive relationship with your customers, your brand can expect a more significant profit than simply selling to consumers, which can be impersonal. This is why customer loyalty programs target high-value customers with specific design elements to recognise and reward them.
For example, the trade industry creates bonds between customers and store/account managers over time, sometimes evolving into mateship. These relationships allow your business to build brand loyalty through a sense of community, removing specific barriers across negotiations and contracts.
Many B2B customers will stay with their preferred brand due to relationship loyalty, knowing that the person or brand they deal with is trustworthy and will provide them with the best experience possible.
Relationship loyalty is mutually beneficial, as each party knows what the other is looking for and will do what’s best for long-term success.
3. Transactional Loyalty
Transactional loyalty weighs the value of a product or service before calculating whether to engage the seller and make a purchase. This loyalty category is common within B2B markets and defines the transactional relationship between buyer and seller.
The customer finds value in the purchase, and the transaction is finalised; no further commitment is made. This relationship is largely functional and can change behaviour through incentives or tactical promotions.
Brands want consistent business from customers, but this isn’t a great indicator of the type of customer loyalty that a program will seek. Instead, it focuses on transactionality, and your business will have to weigh whether repeat business results from few alternatives or lacks the drive to change suppliers.
If your customers are seeking discounts or looking at competitors, they’re likely purely transactional—not unlike price-induced loyalty. While this can drive repeat business, it lacks a solid relationship to help fuel customer retention. Now you can see why winning your customers over emotionally is essential!
4. Emotional Loyalty
This is where your customer loyalty or sales incentive program comes in. Launching a program is to drive a sense of emotional loyalty – where customers feel a strong pull or connection to a specific brand or product, ignoring price or transactional factors.
To capture emotional loyalty, your brand must find a way to create devotion or a sense of self through the program despite external factors trying to lure them away. B2C examples include Apple and Harley Davidson, where the product says as much about themselves as it does about the item or service itself.
How can you create this level of commitment for B2B markets? Your program needs to find a way to understand how customers feel and create a specialised, personalised interaction with them, fuelling the relationship with incentives that speak directly to them, from first contact to after-sales interactions.
A standard solution can be a travel incentive program, where your customers become fans of the brand through the trip. These trips can create a sense of trophy value, where the experience and your brand become emotionally connected in the customer’s mind.
Provide positive experiences that make the customer feel understood, valued, and special for doing business with your brand. These experiences must be customer centric. Your company’s purpose, values, ethics, and the way the staff and company conduct themselves can amplify this.
5. True Customer Loyalty
The final category of loyalty is what all B2B markets strive for – true loyalty. Simply put, it’s a genuine commitment to a single brand. It’s not easily created, but if cultivated over time, you’ll likely never lose a customer again.
Understanding the previous four categories – mutually beneficial relationships, where value exchange goes both ways. If your customers inherently trust your business, they’re not looking for ‘something better’ because your brand commands their loyalty.
This trust can come from delivering experiences your customers will value at all levels. It creates a commitment that has your customers believe you have their best interest at heart and focuses on devotion over transaction.
By understanding the five categories of customer loyalty within B2B markets and engaging with them in this manner, you can decide on the type of relationship you want to build. You can use these to your advantage, winning and keeping the customers you want.
What behaviours does a brand want its customers to change? Should its incentives focus on customer commitment to transactions or on taking offers and driving incremental sales? Your customer loyalty or sales incentive program must encourage personal and relevant relationships, which results in true loyalty.