How to Create Powerful B2B Customer Loyalty Programs That Drive Growth

B2B companies are still relatively new to customer loyalty programs. Most have no idea what a customer loyalty program is, how it can help their business, or why they should bother with one in the first place.

Many B2B customer loyalty programs fail because businesses don’t understand their customers and what they really want from a rewards program. They also lack knowledge of how to create an effective customer experience that will keep people coming back for more.

Paula Thomas explains everything you need to know about creating powerful b2b customer loyalty programs that drive business growth, including examples of best practices and real-life case studies from other successful companies.

About Paula

Paula Thomas is an independent loyalty marketing consultant, writer, and podcast host.

Paula has been studying and writing about how to drive loyalty in the convenience retail industry and has now published a book entitled “Driving Loyalty in Convenience Retail”

She is a former judge for the UK Loyalty Magazine Awards.

Paula found her passion for loyalty schemes while working as a Marketing Manager for a major airline 20 years ago. Since then, she’s worked on world-leading loyalty schemes for brands, including Avios, O2 Ireland, AIB, and The Entertainer Group. 

In this episode, she shares how we can create powerful b2b customer loyalty programs that drive growth predictably.

Understanding the Power of B2B Customer Loyalty Programs

In today’s competitive business landscape, acquiring new customers costs significantly more than retaining existing ones. B2B customer loyalty programs have emerged as strategic tools that not only foster customer retention but also drive substantial revenue growth. Unlike their B2C counterparts, B2B loyalty programs focus on building long-term relationships with business clients, distributors, installers, and trade partners.

Paula Thomas, host of the “Let’s Talk Loyalty” podcast, emphasizes that loyalty programs are not just about customers being loyal to brands but rather about brands demonstrating loyalty to their customers:

“I think sometimes there’s a lot of confusion that a loyalty program is there, maybe yes, for your customers to be loyal to you, and that obviously does happen. But really the fundamental is we need to be loyal to our customers in order to build that relationship, that virtuous circle.”

This perspective shift is crucial for B2B organizations looking to implement effective loyalty programs. It’s not merely about incentivizing repeat purchases but creating a reciprocal relationship where both parties benefit from continued engagement.

The Business Case for B2B Customer Loyalty Programs

Before diving into the mechanics of creating effective B2B customer loyalty programs, it’s essential to understand why they matter. The fundamental concept that underpins successful loyalty initiatives is the customer lifetime value (CLV).

Paula Thomas highlights this as a critical concept that many businesses underappreciate: “Probably the first one that comes to mind is maybe the concept of the lifetime value of customers… before you make decisions about how you’re gonna behave with your customers, let’s think about it in the context of the overall relationship, not just [that a customer] is gonna maybe buy a new laptop or book a flight, but actually over your lifetime, what exactly are you worth as an individual?”

This long-term perspective changes how businesses approach customer relationships. Instead of focusing on individual transactions, companies see each customer as a continuous revenue stream that can grow through proper nurturing.

Research supports this approach. According to loyalty experts, increasing customer retention rates by just 5% can increase profits by 25% to 95%. In the B2B space, where individual contracts and relationships can represent significant revenue, the impact of loyalty programs becomes even more pronounced.

Types of B2B Customer Loyalty Programs

There are various types of B2B loyalty programs that businesses can implement based on their specific goals and customer base:

1. Points-Based Rewards Programs

Points-based programs allow customers to earn points based on purchases or other valuable actions. These points can be redeemed for rewards, discounts, or exclusive services. This model works particularly well for distributors and resellers who make frequent purchases.

2. Rebate Programs

Rebate programs give customers cash back or rebates based on their total purchases or specific product categories. These rebates can be accumulated over time, used toward future purchases, or credited to the customer’s account.

3. Exclusive Access Programs

These programs offer exclusive access to special events, product previews, industry insights, or educational resources. This approach works well for B2B companies selling high-value products or services.

4. Partnership Programs

Partnership programs involve collaboration between businesses to provide joint loyalty initiatives. For example, two complementary B2B companies may create a program where customers can earn rewards or benefits from both companies when they engage with their products or services.

5. Referral Programs

Referral programs encourage existing customers to refer new business customers in exchange for rewards or incentives. This leverages the power of word-of-mouth marketing and harnesses existing customers’ networks to drive new customer acquisition.

The IBM Reseller Loyalty Program: A Case Study in B2B Loyalty Success

One of the most successful examples of B2B customer loyalty programs comes from IBM. Paula Thomas shared insights about IBM’s global reseller loyalty program, which has been running for over twenty years:

“The one program that I did see, which I really love and is a great case study in B2B is with IBM. And they’ve had a loyalty program, would you believe, for twenty years with their reseller community around the world. It’s a global program and it’s extremely powerful.”

What makes IBM’s program particularly effective is its focus on education combined with gamification:

“It’s based around education in the first instance because, obviously, IBM products do require resellers to be very highly aware of the differences and distinctions between, obviously, very big competitors in the industry, the IT industry overall. So IBM have a gorgeous program, and it’s focused on a gamification approach. They literally, country by country, choose a game.”

The program adapts to local preferences in different markets:

“For example, in India, they might choose cricket as the mechanic to showcase what the resellers are gonna learn. So they would play a game of cricket online, and they would be learning about IBM products along the way. And then the same functionality would be used, but they might use football or soccer or ping pong in China, for example.”

The results speak for themselves:

“Our most highly educated resellers are our most effective and our most powerful salespeople. And I believe it was just a massive uplift. Once people went through that education, played the games, got themselves rewarded, they then just were able to sell IBM better.”

This case demonstrates how B2B loyalty programs can be tailored to specific business objectives—in this case, improving product knowledge among resellers to drive sales.

The Distinction Between Transactional and Emotional Loyalty

When developing B2B customer loyalty programs, it’s crucial to understand the difference between transactional loyalty and emotional loyalty.

Paula Thomas explains this distinction: “There’s a lot of talk in our industry about transactional loyalty versus emotional loyalty, and how can you build on the transactional loyalty so that they’re actually connected with you as a brand, not just being complacent.”

Transactional loyalty occurs when customers continue to purchase from a company due to convenience, habit, or lack of better alternatives. While this type of loyalty can maintain revenue in the short term, it’s vulnerable to competitive offers and market changes.

On the other hand, emotional loyalty develops when customers feel a genuine connection to a brand. They continue the relationship because it’s convenient and because they value the partnership. This type of loyalty is much more resilient and often leads to advocacy.

In the B2B space, building emotional loyalty requires going beyond simple reward structures to create meaningful experiences and demonstrate a genuine commitment to customer success.

The Role of Net Promoter Score in B2B Loyalty Programs

Net Promoter Score (NPS) has become a standard industry metric for measuring customer loyalty. Paula Thomas, who interviewed Rob Markey, the co-creator of NPS, highlights its relevance to B2B loyalty programs:

“If I was to ask my customer if they would recommend us to their friends and family, that’s a very different question than, are you going to buy from us again maybe because you’ve no choice, or maybe because you’re lazy, or maybe because we all know we have lots of reasons for buying, but that emotion of loyalty is very different from just behavioral loyalty.”

NPS measures the likelihood that customers would recommend a company to others, which strongly indicates emotional loyalty. For B2B companies, a high NPS suggests that customers continue to do business with the company and are willing to stake their professional reputation on recommending the company to others.

Thomas appreciates NPS for two key reasons:

1. Simplicity: “I think customer research can be onerous on both sides and often just not actioned. So in my experience, the more kind of customer research we do, the more confused we can sometimes be. So if you can focus on, okay, one question and then take action based on that, I think you’re more likely to actually see a shift in the business because it’s just super transparent.”
2. Focus on advocacy: “The advocacy piece is something that I think is very valuable because then you have a chance to capture whether they’re talking nicely about you on social media, for example, or around the dinner table or the barbecue or who knows?”

Implementing NPS as part of a B2B loyalty program provides a straightforward way to measure the program’s impact on customer advocacy and identify areas for improvement.

The Founder’s Mindset: Cultural Foundations for Successful B2B Loyalty Programs

Creating effective B2B customer loyalty programs requires more than mechanics and metrics—it demands a customer-centric culture throughout the organization. Paula Thomas refers to this as the “founder’s mindset,” a concept she learned from Rob Markey of Bain & Company:

“He used this term, which I thought was brilliant. He called it the founder’s mindset. And he literally said that two-thirds of companies that are seen as leaders in their industry will always either be led by the founder or descendants of the founder or their customers. So they have that inherent value of how customers really are important to the business.”

This cultural foundation is essential because loyalty programs can’t succeed in isolation. If the rest of the organization doesn’t share a commitment to customer success, the program will feel disconnected from the overall customer experience.

Thomas emphasizes that loyalty shouldn’t be siloed:

“It’s very easy for loyalty to be seen as a department. It’s sent off into the corner, and sometimes we get excited about it because maybe it’s on TV or the board might decide to invest in it. But that’s not enough, and customers expect better.”

Building this cultural foundation requires:

1. Clear leadership commitment to customer loyalty as a business strategy
2. Cross-departmental alignment on customer-centric goals
3. Consistent communication about the value of customer relationships
4. Recruitment and training focused on customer-centric values

As Thomas notes,

“Unless they’re actually the same type of human being with the same values that the organization wants to deliver, I think you’re gonna maybe just really struggle to create and change people. I think you need to find people who are aligned with the core business values in order to avoid that silo mentality.”

Leveraging Customer Data for Personalized B2B Loyalty Experiences

Data analytics forms the backbone of modern B2B customer loyalty programs. The ability to collect, analyze, and act on customer data allows companies to create personalized experiences that drive engagement and retention.

Paula Thomas highlights the power of a good data asset:

“It is extraordinary the power of what a good data asset can be for the business. And more and more companies are going, yeah, that’s where the power lies.”

She shares an example from the airline industry:

“I did a great interview with KLM Air France, and they did massive analytics around their customer data. And their single biggest conclusion, which I love as a loyalty professional, they say the burn drives the earn.”

This insight—that customers who redeem rewards (“burn”) are more likely to continue engaging with the program to earn more rewards—demonstrates how data analysis can reveal counterintuitive patterns that inform program design.

For B2B loyalty programs, key data points to collect and analyze include:

• Purchase history (frequency, volume, product categories)
• Engagement with educational resources
• Response to previous promotions
• Customer service interactions
• Contract renewal patterns
• Referral activities

By analyzing these data points, B2B companies can identify high-value customers, predict churn risks, and create targeted interventions to maintain and grow relationships.

Thomas emphasizes that this data-driven approach is not just about identifying transactional patterns but building reciprocal relationships:

“It’s not just by being a member of a program, obviously, that loyalty grows. It’s by actually building a reciprocal relationship that the relationship grows. It’s not a quick fix.”

Integrating Customer Success and Loyalty Programs in B2B

In the B2B space, customer success and loyalty programs are closely intertwined. Paula Thomas acknowledges this connection: “Without customer success, you can’t have ongoing customer loyalty.”

The basic product or service must meet customer expectations before a loyalty program can add value:

“Loyalty is like the icing on the top. And depending on the scale, again, I know in an IBM context, you could be very richly rewarded, obviously, for selling a lot of IBM, so that definitely makes commercial sense. They’re not gonna do it for twenty years if it’s not really driving revenue for them, but you’re absolutely right. You have to make sure the customer is super happy and then see what extras you can do so that they have that emotional connection we talked about earlier.”

This integration of customer success and loyalty programs creates a virtuous cycle:

1. Customer success ensures the product or service delivers on its promises
2. Loyalty programs reward continued engagement and growth
3. Enhanced customer relationships lead to expanded use cases and adoption
4. Increased product usage drives more success outcomes
5. Successful customers become advocates, completing the cycle

For B2B companies, loyalty programs should be designed in close collaboration with customer success teams. Program rewards and incentives should align with customer success milestones and reinforce behaviors that lead to successful product adoption and utilization.

The “Burn Drives the Earn” Principle in B2B Loyalty Programs

One of the most powerful insights Paula Thomas shares comes from KLM Air France’s loyalty program analysis: “The burn drives the earn.”

This principle suggests that customers who actively redeem their rewards (“burn”) are likelier to continue engaging with the program to earn more rewards. Thomas explains:

“It’s only when you close the loop and make sure the customer is recognized and is rewarded, then you use that and the customer then goes, ‘Oh my goodness. I trust this brand. I’ve got something back.’ The emotional loyalty goes up, and their behavior actually changes.”

For B2B loyalty programs, this means:

1. Make redemption easy and valuable – Remove barriers to reward redemption and ensure rewards are meaningful to business customers.
2. Celebrate redemption moments – Acknowledge when customers redeem rewards and use these moments to reinforce the relationship.
3. Provide regular redemption opportunities – Don’t set thresholds so high that redemption becomes rare.
4. Analyze redemption patterns – Identify which rewards drive the most subsequent engagement.

By focusing on the “burn” side of the loyalty equation, B2B companies can create more engaging programs that drive continued participation and increased customer loyalty.

Common Pitfalls in B2B Customer Loyalty Program Implementation

Creating effective B2B customer loyalty programs involves navigating several potential pitfalls. Paula Thomas identifies several areas where companies often stumble:

1. Program Structure

“I think, first of all, it’s the structure. There are so many particularly new structures. The obvious starting place for a lot of people is a points-based program, a currency, but I started with a partnerships-based loyalty program, which is an entirely different concept. There are also programs based on using frequency, so using maybe just a stamp card format… Then there’s a paid loyalty program as another format.”

Without proper expertise, companies may choose a structure that doesn’t align with their business objectives or customer preferences.

2. Financial Liability Management

“The correct accounting for the liability that you’re bringing into the business, back to the importance of the P&L, has to be accounted for because that’s future value that has to go, and you have to be responsible for.”

Loyalty programs create financial liabilities that must be properly accounted for on the balance sheet. Failing to do so can lead to significant financial issues later on.

3. Legal and Privacy Considerations

“The legal side of privacy in loyalty programs has to be future-proof as well because the whole piece is just evolving dramatically. And again, country by country, super complex.”

With increasing privacy regulations worldwide, B2B loyalty programs must be designed with careful attention to data collection, storage, and usage practices.

To avoid these pitfalls, Thomas recommends bringing in specialized expertise:

“I would definitely encourage anyone, if you’re going to do it, just bring in somebody on a contract to set it up properly for you, and then bring the expertise in-house for sure.”

Measuring the ROI of B2B Customer Loyalty Programs

B2B customer loyalty programs must demonstrate a clear return on investment to gain and maintain executive support. This requires establishing appropriate metrics and measurement frameworks.

Key metrics for measuring B2B loyalty program ROI include:

1. Customer Retention Rate

Track the percentage of customers who continue to do business with you over time. Compare program and non-participants retention rates to isolate the program’s impact.

2. Share of Wallet

Paula Thomas emphasizes this metric:

“I think share of wallet is a term I really like to understand what are customers spending in your category and how much of that are they spending with you, and therefore, how much more can they spend.”

This metric helps identify growth opportunities even among seemingly loyal customers:

“Our top tier, maybe gold, platinum cardholders, we value them and respect them so much, and we think we’ve got all their loyalty because they’re behaving in a loyal way. But the fact is, we might only be getting half of what they’re spending.”

3. Customer Lifetime Value (CLV)

Measure how the loyalty program impacts the total value customers generate over their relationship with your company. This should include both direct purchases and indirect value through referrals and advocacy.

4. Net Promoter Score (NPS)

Track how the loyalty program affects customers’ willingness to recommend your company to others. This measures the program’s impact on emotional loyalty and advocacy.

5. Program Engagement Metrics

Monitor how actively customers participate in the program through metrics like enrollment, active participation, and redemption rates.

By establishing these metrics before launching a program and tracking them consistently over time, B2B companies can quantify its impact and make data-driven decisions about program adjustments and investments.

The Role of Employee Engagement in B2B Loyalty Programs

Successful B2B customer loyalty programs require active support from employees across the organization. Paula Thomas highlights the importance of engaging employees in the loyalty initiative:

“I always like when a loyalty program has a version for its employees, exclusive employee offers. They begin to earn the same currency as customers do. I also think that gives them a level of excitement about a loyalty program because, again, otherwise, it can just become part of the furniture. It’s like just becomes like wallpaper.”

By creating an employee version of the loyalty program, companies can:

1. Build firsthand experience with how the program works
2. Generate enthusiasm for the program throughout the organization
3. Identify potential issues from an insider perspective
4. Create advocates who can explain the program benefits to customers

This approach ensures that employees understand the loyalty program’s value proposition and can effectively communicate it to customers. It also reinforces the organization’s cultural commitment to customer loyalty.

Leveraging Technology for Effective B2B Loyalty Programs

Modern B2B customer loyalty programs rely heavily on technology for program management, data analysis, and personalized experiences. Key technological considerations for B2B loyalty programs include:

1. CRM Integration

B2B loyalty programs should integrate seamlessly with existing customer relationship management systems to provide a unified view of customer interactions and enable personalized program experiences.

2. Analytics Capabilities

As Paula Thomas notes regarding KLM Air France’s program, sophisticated data analytics can reveal crucial insights like “the burn drives the earn.” B2B loyalty platforms should offer robust analytics capabilities to identify patterns and optimization opportunities.

3. Automation

Automated workflows for point accrual, reward notifications, and redemption processes reduce administrative burden and ensure consistent program execution.

4. Mobile Accessibility

Even in B2B contexts, program participants expect mobile access to their loyalty accounts and rewards. Mobile interfaces should be optimized for B2B users’ specific needs.

5. Security and Compliance

Given the sensitive nature of B2B customer data, loyalty platforms must implement strong security measures and comply with relevant data protection regulations.

By selecting the right technology platform, B2B companies can create scalable, data-driven loyalty programs that deliver personalized experiences while minimizing administrative overhead.

The Future of B2B Customer Loyalty Programs

As technology evolves and customer expectations shift, B2B customer loyalty programs continue to adapt. Several trends are shaping the future of these programs:

1. Predictive Analytics and AI

Paula Thomas acknowledges the need for more predictive capabilities: “We need more predictive analytics.” AI and machine learning technologies are enabling B2B companies to anticipate customer needs and proactively address potential issues before they lead to churn.

2. Integration of Customer Experience and Loyalty

Thomas sees these functions converging:

“My own view is that the loyalty directors of the present will be the CX directors of the future or could be, because I really believe that, again, they have that love of taking care of the customers.”

This integration creates a more holistic approach to customer relationships that encompasses the customer journey.

3. Personalization at Scale

Advanced data analytics and AI enable B2B companies to deliver highly personalized loyalty experiences even across large customer bases. This includes personalized rewards, communications, and program experiences based on individual customer preferences and behaviors.

4. Focus on Emotional Loyalty

B2B loyalty programs are moving beyond transactional rewards to build deeper emotional connections with customers. This involves creating unique experiences, providing valuable insights and education, and demonstrating a genuine commitment to customer success.

5. Sustainability and Social Responsibility

As B2B customers increasingly prioritize sustainability and social responsibility, loyalty programs incorporate these values into their reward structures and overall program design.

The Power of Podcasting in B2B Loyalty

A fascinating insight from Paula Thomas is the potential of podcasting as a tool for building B2B customer loyalty. She states, “I believe in the power of podcasting to drive [loyalty].” Thomas explains that when people listen to her show and then have conversations about loyalty, they have a very different relationship than those who haven’t listened.

This approach leverages the intimacy and trust-building potential of audio content. For B2B companies, creating branded podcasts can:

1. Establish thought leadership in the industry
2. Build familiarity and trust with customers
3. Provide valuable insights and education
4. Create a more personal connection with the brand

Thomas notes,

“The human voice is the oldest form of communication. And whether it’s B2B or B2C, I think branded podcasts are just an extraordinary tool, and why not do it?”

Conclusion: The Integrity-Driven Approach to B2B Customer Loyalty

In conclusion, successful B2B customer loyalty programs are built on integrity and a genuine commitment to customer success. As Paula Thomas emphasizes,

“For me, it is around how can I take care of my customers? How can I give them a good – I guess I come back to what does excellence look like in your situation in this moment?”

This integrity-driven approach involves:

1. Understanding the lifetime value of customers
2. Creating a customer-centric culture throughout the organization
3. Leveraging data and technology to deliver personalized experiences
4. Focusing on both transactional and emotional loyalty
5. Continuously adapting to changing customer needs and expectations

By embracing these principles and leveraging the latest technologies and strategies, B2B companies can create powerful loyalty programs that drive sustainable growth and build lasting customer relationships.

As the B2B landscape continues to evolve, companies that prioritize customer loyalty and adapt their programs accordingly will be best positioned to thrive in an increasingly competitive marketplace.

Some topics we discussed include:

Listen to the episode

Related links and resources

Get a copy of Driving Loyalty in Convenience Retail
Check out Paula’s podcast
Learn from Dan Gingiss – How to Create a Digital Customer Experience Strategy to Drive Growth
Learn from Rich Rose – How to Radically Improve Customer Service for Business Growth
Learn from Shep Hyken – How to Build Customer Trust And Loyalty to Drive Business Growth

Learn from Kyle Duford – How to Develop Powerful Brand Strategy Frameworks That Rapidly Drives Growth
Learn from Jeff Wald – How to Build a Powerful Company Culture Deck That Drives Growth Predictably

Listen to my interview with Sreelesh Pillai – 8+ Ways to Meet Customer Expectations And Exceed Them to Drive Predictable Growth
Discover more with Andrew Deutsch – How to Conduct Customer Research That Drives Growth via New Insights
Listen to my interview with Mike Adams – How to Create Customer Value Via Systems of Intelligence That Drives Growth

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