It’s a well-known fact that B2B loyal customers make a bigger difference to long-term profits than new or one-time customers. Perhaps you’ve already implemented B2B loyalty programs to entice your customers to stay with you and/or buy additional products or services from you. But how can you tell if the programs are really working?
As with any marketing effort, you need accurate ways to measure B2B customer loyalty so you can optimize your efforts and generate more of the results you want. Here are five ways to understand whether your customer loyalty rates are growing, and tips for how to use those insights to increase them even more.
1. Retention Rate
Your customer retention rates can be a great indicator for whether your customers are staying loyal. Businesses often calculate retention rates using the following calculation, which gives insight into the degree to which repeat or loyal customers are impacting your retention rates.
Retention Rate = ((CE-CN)/CS)) x 100
CE = number of customers at end of period
CN = number of new customers acquired during period
CS = number of customers at start of period
You can use cohort marketing to further measure and increase customer loyalty. Cohort marketing involves segmenting your audience so you can design marketing efforts specifically for each group. This is an activity many marketers are already familiar with for attracting new customers, but one they don’t tend to rely on for increasing loyalty.
Cohort marketing can give you insights into who your most loyal customers are by breaking down your customer base according to metrics like:
- Sign up
- Usage rates
Then, you can see which customers rank highest across all the categories. Breaking down customers in this way also reveals which of these categories is the weakest. Boosting your efforts in those categories will help increase loyalty rates even more.
2. Net Promoter Score
Your site’s net promoter score indicates, on a scale of 1 to 10, how likely it is that your customers will refer you to someone they know. Your customers will typically fall into one of three categories:
- Detractors—those customers who would get a rating of 6 or less. They are unlikely to refer your product or buy from you again.
- Passives—customers who would fall in the 7-8 range. They are satisfied with your product, but not to the extent that they’d actively recommend it.
- Promoters—who fall at 9-10 on the net promoter scale. They are the customers who will readily recommend your product and stay with you for the long-run.
You can calculate your company’s net promoter score by subtracting the percent of detractors from the percent of promoters. This score will also provide insight into ways to increase loyalty, by illuminating which of your customers fall under what categories. When you can pinpoint who your detractors and passives are, you can design activities specifically geared toward increasing those customers’ satisfaction and the likelihood that they’ll turn into loyal customers.
For example, you might specifically target detractors with a request for insight into how your company can better satisfy them. Or, you might offer passives additional benefits to increase their satisfaction with your product.
Conversions play an important role in measuring customer loyalty. However, we’re not talking about converting a site visitor into a buyer. Instead, when you’re focusing on customer loyalty, conversions have to do with a customer completing an additional action that has value to you. This action might be simply visiting a specific web page, watching a video, or sharing content.
When you’re looking to grow customer loyalty, you can focus on growing revenue-based conversions and engagement-based conversions.
You might increase revenue-based conversions by exploring different calls to action, while implementing initiatives like rewards programs for certain behaviors (for example: “Become a recognized partner or contributing expert after referring 5 customers”) can help you increase engagement-based conversions and inspire your customers to stay loyal.
These days, there are various ways that your customers can publically advocate for your company. For example, they might use social media, or advocate for you by providing a testimonial on your website.
When you’re measuring your B2B customer loyalty rates, take a look at how many of your repeat customers are openly advocating for you and who they are. To do this, you need to take an in-depth look at all your social media profiles, reviews on review sites, or anywhere else your business name is mentioned (which you can also find on search engines).
Use these insights to increase customer loyalty by rewarding them and/or acknowledging them for these efforts. For example, you could offer to write a case study highlighting them and share it on social media, on your blog, and in your newsletter. This will make the customers who value you feel valued themselves, while also showing others that your company values its customers—something that will inherently help increase B2B loyalty rates.
Of course, you’ll want to make sure you provide your customers with easy ways to advocate for you. Using a tool like Spectoos can help you do this - their testimonial platform makes it simple for you to request testimonials, nearly effortless for customers to provide them, and a cinch for you to embed them across your web assets, such as:
- Your homepage (above the fold)
- Any page that contains a form (landing pages, contact us, etc.)
- Solution pages
5. Benefit Redemptions
Offering B2B loyalty program benefits is one thing. Your customers using them is another. The extent to which your loyal customers take advantage of benefits will give you insights into how loyal they actually are. It will also help you understand whether you need to tweak the benefits you’re offering to make them more appealing.
Ensuring that you’re rewarding your customers in ways they’ll find valuable will help you increase your loyalty rates. You’ll achieve greater success here by creating specialized benefits for specific groups of customers, thereby addressing the unique desires of each different group.
For example, Medecision, a provider of health management solutions, uses exclusive client-only webinars to drive customer loyalty and retention. Depending on which group of customers they are trying to reach, they can adjust the content of the webinars to match the group’s specific needs exactly.
Benefit redemptions also offer an opportunity for increasing loyalty rates through how easy you make the redemption process and how your tiers are set up. If redeeming your benefits is cumbersome, your customers won’t bother. The easier you make it for customers to enjoy your benefits—for example, by offering a tier-based redemption process—the more likely you’ll be to grow your loyal customer base. Tier-based loyalty programs enable your customers to automatically unlock a new range of benefits with each new tier they reach.
Measuring B2B customer loyalty is important for two main reasons:
- For understanding whether your customers see value in the benefits and loyalty programs you offer.
- For making sure your efforts make a real difference to your profits.
The tactics provided here offer ways to gain real insight into how well your loyalty programs are working, without relying on guesswork. Make the most of these insights by using them to inform the ways you tweak and improve your programs, so that your loyal customers can’t help but to stay with you.
Want to learn more about implementing B2B loyalty marketing strategies? Download our free ebook, here.