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B2B Distributors: Go Full Steam Ahead With Small-Business Customer Loyalty Programs

Tugboat going full steam ahead with small-business customer loyalty programs

Small businesses are the backbone of the U.S. economy. According to the U.S. Small Business Administration, in the past 20 years, small business added more than eight million jobs, while large business shed over four million. And, according to the Bureau of Labor Statistics, 50 percent of businesses experiencing high growth have fewer than 10 employees. 

That’s certainly not news to distributors. Small-business customers have always been an important segment of their business. They buy products frequently and provide a tremendous channel for distributors to reach end users. That’s precisely why small-business customer loyalty programs are so successful.

Technology integrators regularly purchase components to incorporate into their projects. Painting contractors need paint, brushes, rollers, ladders and buckets to get the job done each and every day. Plumbers need pipe. Electricians need wire. The challenge for distributors is to maintain and deepen your relationship with these small-business customers and to keep them consistently purchasing from you. 

Thankfully, you don’t have to make thousands of costly, time-consuming personal sales calls to maintain that relationship. That’s where a small-business loyalty program can be a huge help, and it might be just the answer to keep you top-of-mind with the business owners and create a bond that continues to grow over time as your customer continues to purchase.  

Unlike large customers who often have policies in place which will not allow their employees to participate in customer loyalty programs, small-business owners often actively look for loyalty programs to help them get the things they need to grow their business. If your customers could use their loyalty program to fund the purchase of a new computer, printer, iPad or even a coffee pot, that’s money they don’t have to pull out of their pocket. And all they have to do is make sure they buy what they must buy anyway from you instead of someone down the street. (Or, worse yet, someone on the other side of the globe through e-commerce.)

      

Partnering With Suppliers for Small-Business Loyalty

Your suppliers are also looking to tap the potential of these small-business customers—and they want you to succeed in turning them into loyal customers. Working with them to leverage vendor co-op or marketing development funds helps you build a loyalty program with enough rewards to capture the attention of your small-business customers. 

Partnering with you is the best way for your vendor to reach these customers. You know who they are, where they are and what they buy. The invoice transactions you have identify everything you need to run a small-business customer loyalty program quickly and effectively. 

      

Technology is Changing Customer Loyalty Programs

Not long ago, customer loyalty programs required enormous investments to communicate and administer. That meant you needed millions of customers to justify the fixed expenses. Add in the price of awards, and these powerful tools were simply out of reach for anyone except the largest airlines, hoteliers and credit card companies.

The Internet, of course, has changed all that. With online enrollment and account access now commonplace and email marketing reducing communications costs, a distributor with as few as 5,000 small-business customers can effectively manage a strong loyalty program for small businesses. Online reporting tools make it easy to administer the loyalty program and provide vendor reports to track their investment, reducing labor charges to run the program. There is no better time to gain the loyalty of your small-business customers before your competitor does.

      

Do Customer Loyalty Programs Get Results?

The easy answer is “yes.”

We all know someone who only flies Southwest Airlines because their Rapid Rewards status lets them board ahead of everyone else. And you probably have three other credit cards you almost never use because you’re building rewards on one. One of our clients saw a 63% increase in sales through a contractor loyalty program, for instance.

      

Choosing the Right Loyalty Program Partner Makes All the Difference

For distributors, loyalty programs can be a huge investment of time and energy without the right tools and partners. Choose a partner to help with communications, program administration, rewards and customer service. You already know the importance of selecting the right partners for your distributorship. You would never consider adding a new vendor without knowing what to expect when it comes to the market for their products, inventory turns, pricing, technical support and return policies.  

Selecting the right loyalty program partner is just as important. Look for an experienced partner with the right tools to manage your program. Ask them questions about maximizing enrollment, return policies on rewards and the flexibility of their system to manage short-term promotions. And certainly don’t forget to ask potential loyalty program partners about their customer service resources.

Your business depends on customer service, and your loyalty program partner will be a reflection of your business. Make sure they take care of your customers as well as you do or your brand will suffer. 

      

Check out Parts 1, 2 and 4 of the B2B Channel Partner's Journey blog series:

B2B Distributors: Optimize Your Channel Strategy to Stay Afloat

B2B Distributors: Navigate Distribution Channel Relationships with Data as Your Guide

B2B Distributors: Sail Past MRO Sales Goals with Incentive Programs

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