We are all familiar with the figures around the cost of acquiring new customers, and, thus, the importance of retaining existing ones; not only in respect of the acquisition costs and energy, but also in the lost marketing that occurs in recommendations and customer lifetime value. So let’s not rehash those figures, and accept that building brand loyalty in B2B markets is a “must do” activity for any company.
Brand loyalty in consumer markets tends to be variable and situationally dependent. Consumers have a lot of information easily available to them and a plethora of suppliers to choose from in most markets. For the consumer, using a wide range of suppliers is relatively easy, the decision maker is autonomous, and the stakes are usually lower if you get it wrong.
B2B buyers are, of course, also consumer buyers, and therefore carry with them their consumer expectations into their business life. Despite this, they do want the buying process to be easy, fast, and secure, and critically, they don’t want to have to keep educating the supplier about their business and their needs. This points towards a greater need for brand loyalty for B2B buyers.
Trust Is At The Heart Of Loyalty
The root of loyalty is TRUST. When trust in a brand is lost, it is very hard for a customer to continue to buy from that source without feeling pain, and of course there will be other suppliers who can offer to ease that pain.
Trust comprises 3 core components: Process-based trust – centred on the exchange between individual and organization; Institutional-based trust – the trustworthiness and credibility of the organization; Characteristic-based trust – focused on the values, background and experience of the brand, and the extent to which these are acceptable and shared with the customer.
Essentially, this boils down to the following which are encapsulated in the ABI model of Trust:
- Abilities – What you do
- Benevolence – How you behave
- Integrity – What you believe
So What Does It Take To Engender Loyalty?
A recent Gallup poll found that only half of B2B customers in its survey were confident in their vendors’ ability to deliver on their promise. Again, only half felt proud to be a customer of their suppliers, and fewer than 1 in 3 felt fully engaged with their vendors’ sales teams. This indicates there is plenty of headroom for B2B suppliers to engage customers with their brands and build loyalty which extends beyond the traditional transactional rebate/discount scheme.
Our recent B2B International Marketing Survey 2021 found that more than half of B2B buyers stated that connecting with customers on an emotional level to build brand engagement was a challenge. A similar number cited building and strengthening customer relationships in a digital world as a current challenge, reflecting the additional challenges of brand engagement posed throughout the pandemic.
Measurement of brand preference and loyalty is undertaken by most corporate B2B companies, though our recent study showed that only about a third felt they were good at this (slightly up on the number 2 years ago). Most of these companies were measuring Net Promoter Score as part of this activity. Satisfaction scores with performance have been found to be no indicator of brand loyalty; in our survey, a third were regularly measuring NPS in addition to other measures. These could include brand awareness, brand preference, brand associations and brand trust, often in a composite overall benchmark score.
Getting Beyond the Basics
It goes without saying that B2B buyers are looking for reliability of products and process, as well as excellent service in their vendor choices. Without these qualities, market success is improbable. However, addressing this alone is unlikely to build a level of brand engagement which ultimately develops into a loyalty which can resist competitor offers, pay premiums, and build collaborations and investment.
A recent study (albeit of consumers) found that 72% of people are more likely to buy from a company that contributes to social causes and 24% would stop using a brand if it was mistreating workers or paying too low wages.
This highlights the need for any brand strategy to include both the way the business is managed (particularly reputations) and branding communications (particularly thought leadership, trustworthiness and community) in building trust and ultimately, brand loyalty.
Readers of this blog also viewed: