Design
As a buyer of many B2B solutions, I don’t think Netcore is part of any B2B loyalty program. At the same time, Netcore itself is a seller as a B2B SaaS company to many B2C companies. This was the context I started with in thinking about designing a next-gen loyalty program – one which I would be delighted with as a buyer and seller.
The core of a loyalty program comes down to two elements: earn and burn. How do members receive points? How do they redeem them? [For reference, I had done a similar exercise for Mu tokens in my Loyalty 2.0 essay (part 13).]
Earning
- Points can only be earned by the business, and not by the individuals who are part of the decision-making process.
- Earning can be linked to both monetary and non-monetary actions. For example, points are earned based on spending (and could be linked to the gross margin generated by the product). Points could also be earned for time (events attended, reviews, testimonials, referrals). Points could also be earned for additional data provided by the buyers which can help with RoI calculation. For example, most email service providers do not get transaction data. If that data were available, it would help with a better assessment of revenue per email (RPE). The same could apply to customer journeys in marketing automation solutions. So, think of this as a blend of both Loyalty 1.0 and 2.0 elements that I wrote about earlier.
- The formula for earning points will need to be determined by the quantum of investment made for the program. A reasonable figure is 1% of revenue generated.
- A minimum monthly or annual spending threshold should be there for either membership continuation or redemption.
- Earnings could be linked to products and services from a single company or a consortium. Membership tiers could help drive more loyalty (and spending).
Redeeming
- For redemptions, the key to long-term success will be the CPP:VPP calculation. Cost per point is what the B2B seller is spending, while value per point is what the buyer perceives. A good example of this is that while redeeming airline miles for a free ticket, the buyer perceives the full value of a ticket, while the cost for the airline is just the cost of meals. Similarly, for B2B loyalty programs, it is very important to ensure the value of rewards is far greater than the 1% or so which serves as the basis for earning points.
- In this context, there can be two types of rewards: conventional rewards and Mu (Atomic Rewards). Examples for conventional rewards are discounts against future product purchases, attendance at events, and participation in beta programs for new releases to get a marketplace edge. What can make the redemptions program much more valuable and exciting is the addition of Mu to the points. Mu can benefit the B2C business’ customers. For example, Mu tokens could help a business drive change in end customer behaviour. [I have written on these ideas]
- The Velvet Rope Marketing ideas can also be applied here with rewards being used to provide exclusivity, ease, and access. The creation of a community of buyers is an example of exclusivity.
To summarise: B2B sellers need to start thinking of creating loyalty programs which can help drive retention and growth of their buyers. It can also help with creating better experiences and relationships, and offer newer dimensions on which to win rather than just price discounting. A program which can excite end customers of the buyers can make it even more “rewarding.”
