“Free gift with purchase”. There was a time when all you needed to get a customer on board was the word ‘free’ and some branded merchandise.
Then came the customer loyalty schemes, where points meant prizes. As consumers, we have become so used to collecting points, stamps and miles that, in many cases, the term ‘loyalty scheme’ has become largely meaningless. But in the business environment where trends often lag behind the consumer sector, is incentivising customer loyalty still a vital part of the corporate card transaction?
The practice of offering ‘air miles’ as a reward has long been the most common incentive. Neatly tying up airfares with the card used to pay for them, the prospect of a free flight made business travel that bit more inviting. However, miles and points programmes frequently incentivise the end user rather than the executive most closely involved in the banking relationship. To secure customer loyalty, banks must first make sure they’re securing the loyalty of the right person.
What B2B clients really want?
The incentives that B2B services providers offer, and the ones their clients value, are not always the same. Research from customer data consultancy Merkle suggests that North American providers prioritise spend-based pricing and giving preferential rates or treatment to their clients for being loyal (48%). While in the UK, cashback rewards (46%) seem key. Interestingly, cashback is least valued by North American executives (39%) and incremental preferred services the lowest priority (29%) for UK providers.
In the UK, providers and their clients appear to be in sync as the highest number (46%) of customers also want some form of cashback. However, in North America, 57% would prefer dedicated support over the 54% who look for some form of financial incentive.
What really drives customer loyalty?
The findings above relate purely to the loyalty schemes customers are offered. The research also asked in general what factors keep customers loyal once they have a relationship. In both the UK and North America, this was simply a high-quality product, by a large margin (72% and 78% respectively). Equally, poor customer service and poor-quality products were most likely to drive clients away. Merkle’s research also showed that loyalty schemes were predominantly used as a customer acquisition tool, not guaranteeing loyalty at all.
When it comes to ensuring good, sustainable and ongoing client relationships, a well-functioning product that supports and enhances a client’s business with features that make their business life better is what matters most. Customers are looking for providers that fulfil not just the bare minimum they expect but go the extra mile. Due to digital innovation and the consumerisation of business banking, the level of ‘bare minimum’ is rising all the time. Everyone is a customer and expects the same tools and services they receive for their personal banking to be emulated in the business world too.
No one wants or needs gimmicks. Business customers want services that keep up with innovation, show a willingness to embrace new technologies and partnerships, and provide best-in-class customer experience. This is the basis on which corporate banks should be building their corporate loyalty programme.