According to research by Frederick Reichheld of Bain & Company, increasing customer retention rates by just 5% increases profits by 25% to 95%.
Now, consider the far greater potential lifetime value of a B2B customer and it’s clear that a lot of money is being left on the table by B2B businesses by not prioritizing customer loyalty. In fact, a white paper by the CMO Council found that 77% of B2B marketers know they are not realizing the full revenue potential of their existing customers.
How Is B2B Customer Loyalty Different to B2C?
With B2B and B2C buying practices increasingly crossing over, it would be easy to presume that customer loyalty strategies are the same for both. But, as you can see below, there are a lot of differences between B2B and B2C purchases.
- Single decision-maker (the customer)
- One-off sales
- Often spontaneous
- A mix of wants and needs
- Standardized pricing within a single retailer/brand (including discounts/sales)
- Fast transactions
- Typically involve multiple decision makers
- Higher volume orders
- Often recurring or require regular replenishment
- Negotiable/contract pricing including need for quotes
- Slower transactions that may involve multiple points of contact
It’s clear from the above that the buying journeys of B2B and B2C customers will be very different. This affects how customer loyalty is built. Specifically, B2B commerce businesses need to position themselves as a partner rather than just a seller.
Buyers will be more loyal to businesses that they believe can help them achieve their end goals. Yes, B2B customers want to buy good quality products and services, but they want them because of the value they deliver. They’re looking to work with B2B businesses that recognize their aims and want to help buyers achieve them. This idea is so powerful that we’re increasingly seeing B2C brands adopt it as part of their loyalty efforts.