B2B loyalty, referral, and rewards programs
Season 6, Issue 8: Why are they so hard?
Sup Mehketeers,
Given the SaaS business model is only profitable and delivering 10x returns when customers renew, it goes hand in hand with customer programs, whether that be “rewards”, “loyalty”, or “referral” programs.
And yet… there aren’t really any good examples or playbooks out there.
So many things that are touted as great offerings in B2C or partner programs are actually standard inclusions in SaaS Customer Success and Customer Marketing programs.
Education resources? Yep that’s covered by teams driving product usage and the customer newsletter. Post-sales support? Yeah, that’s covered by self-serve knowledge bases, 24/7 support teams, and dedicated account managers.
BUT! A lot of the things we’re already doing as part of standard SaaS offerings can be turned in loyalty and rewards program offerings. Just keep reading.
*Disclaimer, this is just a lot of research and thoughts compiled, I haven’t actually implemented any of these. This topic was hotly requested so I have tried to do as much up front work as possible so you can take this as a basis for implementing your own program or experiment with it!
Different programs, different goals
A couple of definitions first so we’re all on the same page.
Referral programs
You give a reward to a customer when they refer another company that converts to a customer.
Loyalty program
A loyalty program could be based purely on how long a customer has been with you, or it could be an incentive to stay a customer.
Rewards program
This is behaviour based, whether that’s an amount spent, number of products purchased, or things like leaving reviews, giving testimonials, or participating in promotional activities like webinars and events.
I bought a book about loyalty programs so you don’t have to
In Philip Shelper et al’s Loyalty Programs: The Complete Guide, only one chapter is focused on B2B (and it’s like 10 pages, #sad). Here’s a summary of that chapter:
The authors say there’s six fundamental differences between B2B and B2C loyalty programs
B2B programs will always have less/limited members, but this gives greater opportunity for personalisation and curating an “intimate” or “exclusive” feel
B2B members will spend far more than B2C ever will
B2B purchasing drivers are to enhance profitability, productivity, and operational efficiency, in the fastest possible payback period. The authors suggest doing in depth buyer driving research on your specific customers and build your loyalty program on that foundation
B2B buying relationships are more complex, and your program needs to decide whether you’re targeting the buyer or the user, and the authors say “B2B programs which deliver rewards based on spend tend to be better suited to targeting smaller businesses than large companies”
There is a tension between what you put into your rewards program and what you offer as part of your product - you shouldn’t take value out of your product and put it into your rewards program (e.g. offering better customer service). There is also a tension between how long an employee (user) stays at the customer company and how closely that individual is tied to your program, i.e. don’t let the customer’s loyalty rewards fall apart when an employee leaves
B2B has a larger range of possible rewards than B2C (I don’t know if I agree with this though?)
They also covered example programs from Schneider Electric, Allianz, CISCO, IBM, Lenovo, and Mercedes. None of these are for software though, so it’s not particularly helpful for us.
Enjoying Mehdeeka? Refer three friends and get yourself some marketing themed stickers
What can B2B programs offer as rewards?
This is, for me at least, one of the hardest questions. You don’t want to give discounts to your product because that eats into profitability and devalues your offering. You also don’t want to give meaningless gifts or prizes.
I have seen suggestions that offering 24/7 customer support is one option - but that’s also expected for a lot of products, especially if you’re global or have a presence in another time zone. So much of what you’d see in a B2C program looks “cheap” for B2B. But then if you’re offering big ticket items (like international holidays - that’s a reward I saw for a partner referral program!), that’s not a sustainable program to run.
Here are some ideas:
Invite to a customer advisory board, or other events with an “elite” positioning (like round tables)
Gifted or discounted access to industry conference tickets or speaker slots if you’re sponsoring
Influence over the product roadmap or previews and early access to upcoming features
Cash back - this could be something for smaller contract value companies, where cash does make a difference to your customer but you don’t want it to devalue your product
Slack and Discord groups are becoming more common, and super high value contracts often get direct Slack access to their account managers as well, so while these might work for the lower end of the market, it likely won’t entice enterprise customers much.
Offering educational or thought leadership content (via your in-house SME or something) were brought up a lot. As I mentioned in the opening to this issue, these are things already being used as product usage drivers, lead generators, and customer engagement assets.
What I do feel like this could be repurposed for is rolling it out early to your loyalty/rewards programs members, with a delayed “public” release. They get first dibs, but you can still use it for your other purposes too.
The hard part here is timelines… how much advanced timing do you give? How much does this compress your working timelines? Does this make it too early for a seasonal campaign or too late for the public release? For example, if you’re rolling out thought leadership related to the financial year, you don’t want to give that too early to your members, or too late to your wider audience, but you also don’t want the “exclusive” time to your members to be just a few days.
A nut I’m yet to crack, and I’d love to hear thoughts on it!
Reward program frameworks
Another area to consider is how the mechanics of your program will actually work. How will your customers exchange their behaviours for their reward? Here are the options:
Loyalty currencies and status tiers: earn points for transactions which can be redeemed on pre-selected rewards (a bit like a marketplace)
Access to preferential payment terms or credit lines
Surprise and delight: members receive unexpected delights to build emotional connection. A B2C example here is Mecca’s Beauty Loop program, the higher the level you are, the more surprise gifts you get at intervals throughout the year
Education, training, and mentoring: give points for completing educational courses which are gamified
CSR initiatives: participate in activities which contribute to social causes, for example HP has a program where you can return empty ink cartridges for recycling and receive points in exchange
Lastly, I do think if you go above and beyond making amazing merch packs (not just a pen and a notebook), sending these out with a personalised, handwritten card can really tug at the heartstrings and drive the recipient to be attached. Maybe this is something you do as a surprise and delight rather than a specific program - and this would allow for personalisation to the level of someone’s personal life events like having a baby, getting a promotion, or a work achievement they told you about. Even just a bouquet of flowers could work for some brownie points.
The bonus to this is branded stuff makes for great social sharing and long term marketing as long as you gave them something worth using.
Are there any B2B SaaS examples?
I really struggled to find any that were customer-centric (as opposed to partner- or reseller-focused). Big examples in that space were Mailchimp which has an offer for freelancers and agencies that refer Mailchimp to their customers, and SaaSquatch which again is a referral program.
TL;DV has an interesting referral program that’s worth checking out - if you can prove your organic social media posts are getting past a certain threshold of views and meets a certain quality level, they pay you out in cash. It’s likely cheaper than running marketing campaigns, but less predictable.
Unbounce have an open community for all. It’s something between lead gen and customer marketing that takes the form of community forums, educational resources, and product resources. They also have a referral program.
Quick shout out to Open Loyalty which claimed a B2B SaaS customer loyalty program case study as “available soon”. That was a new one for me!
(In case my sarcasm does not come across, I think this is really stupid)
Prompts to get you thinking about what might work for you
What do we want this program to achieve? What outcome do we want?
How might we differentiate between a loyalty and a rewards program?
What behaviours do we want to drive?
What “extra” or “above and beyond” initiatives do we currently run that could be repurposed for a rewards program?
What (marketing or customer initiatives) have we considered doing but put it into the “too much work” or “maybe one day” basket?
What initiatives or ideas do people in customer facing roles have? (Potentially run a ‘hackathon’ or group brain storm session)
What are our customers’ biggest motivations for buying and for leaving us? (i.e., run interviews, don’t just guess)
Do our customers need to know they’re part of a “rewards program” or can we just segment out our top customers for extra special attention?
Tools you might want to look into
The theme this issue has really been “there’s stuff available but not specific to B2B SaaS unless it’s referrals” and the tools follow this trend pretty closely. These are some I found along the way, and they might be helpful to you!
tyb.xyz or “try your best” - looks interesting and very flexible to build it into what you want it to be, but I literally chased them down for a sales call/demo (on behalf of a legitimate client!) and they NEVER REPLIED TO ME!
Cello.so is a word of mouth platform
SaaSquatch has a page for SaaS rewards programs but it seems like they’re trying to re-position in-product engagement programs as “rewards programs” - someone please correct me if I’m wrong on this one
BHN Rewards, more of a reward fulfilment platform, but they seem to have built some cool functionality for rewarding specific behaviours like completing a training module or onboarding actions.
Website inspo for your program!
If you’re going ahead with a program, it’s helpful to have a starting place when creating assets like a landing page for it. I found these examples to be both strong in terms of best practice and giving relevant info, as well as creatively stimulating and getting ideas flowing.
Starbucks (the American site is much better than the Australian one for some reason)
I know, I know, these are all B2C consumer brands. But they have really thorough information on their programs, how they work, what you need to do, and how to get started so it really is a great starting point.
- Fin -
It feels like I’ve written an HBR article and yet I’m still unsatisfied by how little information is out there on this topic!
I seriously hope someone out there finds this helpful. Please tell me if you do so I know it was worth buying that book.
Now, please, cleanse your eyes with goalie uniforms from the 90s and a collection of matchbox designs.
I’m out,
Kayla