The 10 key benefits of B2B Coalition Loyalty Programs
The B2B Coalition Program - the gathering of similar minds…
by Dr. David Cox
‘Double dipping’ coalition programs have been popular in B2C loyalty programs for some time – how many of us have paid for a flight on a credit card and earned air miles for both transactions?
As we predicted for 2017, this trend is now extending to the B2B loyalty sector and more companies are expanding their earn and redemption offerings outside of their own loyalty programs.
Coalition programs offer many organizations the opportunity to heighten value and drive loyalty behaviours especially if the purchase process is lengthy – bundling products together, so that loyalty program participants can earn extra points, drives higher levels of engagement. From a business perspective, coalition programs offer key benefits:
The 10 key benefits of B2B Coalition Loyalty Programs
- Funding requirements (and risks) are split between multiple companies and don’t all fall on one organization.
- They are attractive to smaller niche organizations who may not have the funds or established ecosystem to invest in a channel loyalty program on their own
- Are very effective in motivating participants to sell bundled and solution products and services from alliance partners
- Offer the ability to include quick learn education assets that feature multiple companies providing a bundle or solution
- Are an ideal platform to supplement companies with a longer purchasing cycle with complimentary partners who have a short purchase cycle thus maintaining engagement and loyalty activity
- Companies can share customer data about preferences and purchase behaviours
- The increased value of multiple incentives may attract new customers to businesses they wouldn't ordinarily patronize.
- Partners can benefit from cross-promotion and combined deals.
- Communications can be synthesized to maximise cut through and reduce noise
- The inclusion of coalition partners reduces variety seeking behaviour as participant tend to go to the program that is offering the one-stop destination for point earning activities.
Whilst B2C coalition programs tend to have a diverse range of participating company sponsors, the trend in B2B coalition programs is to involve companies that offer ancillary or complimentary products and services.
An example is the IT sector where IT hardware vendors are increasingly seeking coalition partners who provide software, financing, cyber security and networking switches. We have seen success with clients like Lenovo joining forces with their vendor partners to reward participants in Lenovo’s LEAP channel loyalty program for completing education modules and sales of end to end server and storage solutions.
Feedback from companies operating B2B coalition programs reveal that the benefits outweigh the risks. However, these companies do stress that issues over reporting, channel conflict, equitable funding and who owns the customer, need to be clearly agreed prior to embarking upon this strategy.
The future of loyalty programs is mobile. This mantra has been reiterated across many loyalty marketing industry trend reports. It is a mantra that clearly has face value. In fact, it is a no-brainer, as much of our life now revolves around our little handhelds. Most loyalty programs are migrating to mobile platforms, allowing their members instant access any place, any time. Being able to check your points balance, the latest reward additions or quickly swiping through a learning module in a client’s parking lot definitely ups the convenience factor. But, it does not guarantee an engaging mobile program experience. That is why a number of forward-looking brands have started to engage their members by inviting them to share their ‘must-share-moments’ with the brand and explore the face value of the mobile camera.
For the third year in a row Motivforce has struck gold at the 2017 Brandon Hall Excellence Awards with its Know Your IBM channel incentive program, winning the Gold Award for Best Sales Training Program for Extended Enterprise and Gold Award for Best Unique or Innovative Sales Training Program.
In addition, Know Your IBM received a Silver Award for Best Results of a Learning Program; and Bronze for Best Advance in Creating an Extended Enterprise Learning Program.
In our conversations with organizations that are assessing B2B loyalty and incentive programs, a number of negative perceptions inevitably surface.
Here are the top 5 myths about loyalty programs and our evidence as to why they simply aren’t true.
Over the past 20 years, the structure of B2B loyalty programs has grown from simple sales incentives that reward for achieving sales targets to rewarding for profile performance. Profile performance is the concept of creating the ideal participant profile and rewarding for all behaviours that a participant demonstrates in adopting this profile.
There are many variables to consider when creating the ideal channel loyalty program participant profile and these are broadly classified into the following 5 types of loyalty program participant profiles:
Our research has shown greater loyalty (measured by sales and other valued added behaviours) amongst program participants who are active in enablement tasks, compared to those who are not. In looking at correlations between those participants who have undertaken enablement tasks, versus those who have not, we have observed three traits....
A term that we commonly use in channel loyalty and incentive programs is the effort advantage ratio. This is the study of consumer loyalty programs and the effort a participant must undertake to achieve a loyalty program reward and how this effort impacted on attractiveness of the loyalty program for their continued participation.
These are 7 things to consider when weighing up the Effort Advantage Ratio.
Technology is now defining the route which companies need to take in order to stay relevant and is changing at a rate so fast that organisations and to some extent, society is struggling to keep up.
And whilst digital transformation can start with the introduction of new tech, business transformation is inevitable, which can mean a complete overhaul in a company's products, positioning and ultimately, business goals.
Are you thinking; "do enablement & incentive programs build loyalty with Channel partners and resellers?"
If so then here are some key questions to consider if you're thinking about launching a B2B Loyalty Program or even how to re-engineer an existing one
Is a loyalty program right for your business?
Like any marketing strategy, loyalty programs have a place and an ideal environment in which they should be deployed and managed. So, it is important for firms to undertake a detailed diagnostic assessment to see whether a loyalty program is the best marketing strategy for their product or service, as opposed to rushing to set up a program in the hope that it will solve all your business challenges.
Here are 3 reasons why a loyalty program may not be right for your product or industry: