Loyalty is a powerful concept in the B2B environment. Companies have long been relying on engagement incentives and rewards programs for establishing loyalty within their channel. Customer or member redemption, without a doubt, is the foundation of any rewards program’s long-term success. This makes loyalty redemption rate as a powerful indicator to see whether your channel loyalty strategy is performing or not.
If you enable your channel to redeem easily, this will be a win-win situation. What makes the difference here is the technological base you use to implement features that encourage redemption.
Research on B2B loyalty has primarily focused on the main brand rather than the channel members. However, the existence of metrics like redemption rate today is promising since they imply special care for the customer aspect. There lies the awareness and the wish to understand your partners more behind these metrics. Like Apex Loyalty, platforms adopting these metrics are a gateway to a more fruitful loyalty experience.
Reading the Value Behind Loyalty Redemption Rate
Anyone familiar with the dynamics of B2B would appreciate the following words of common sense in the trade context: Retaining old customers is way harder than acquiring new ones. We can say that this also applies to your relationship with channel partners that you value deeply. Rewarding them is indeed an appealing way for cultivating engagement, but it’s not a simple act as it may sound.
The “Your Loyalty Program Is Betraying You” article on Harward Business Review describes the act of receiving a reward as a “pleasant association with the brand”. It’s not only great to evoke such feelings in a customer or business partner, but also you get to have material benefits from doing so. How?
Research suggests customers who redeem rewards in loyalty programs tend to purchase more – both before and after the redeeming process. As controversial as it may sound, you encourage them to purchase more, even after they receive their share.
We must, therefore, value it as an opportunity to influence future purchase behavior for a long term commitment.
Challenges in Increasing Redemption Rate
Technically speaking, the loyalty redemption rate is the number you get by dividing the sum of points spent on rewards by the total number of points issued. However, various research unveils a general average loyalty redemption rate across trade ecosystems. Brace yourselves: The redemption rate of an average rewards program is barely over 10%. What a pity, and what a loss of potential. Where did we actually make a mistake?
On the other hand, you might have implemented a full-fledged loyalty platform like Apex Loyalty, and offered appealing rewards programs for your channel. But an important thing that shouldn’t go missed is that you cannot treat it as a single-time thing. Channel needs will change, channel interests will change, industry dynamics that each member operates in will change. We don’t stay the same person as we used to be, so treat your channel as such.
If the redemption rate is low in your loyalty program, below are some questions to ask yourself:
- Are you offering different ways to earn points?
Apex Loyalty enables point collection through a variety of activities, from educational tools to campaigns.
- Is redemption taking place only in the traditional sense?
Apex Loyalty takes this notion from a catalog to choose from built-in rewards that feel more natural and fun. On-site rewards gives a seamless feeling.
- Are you offering a seamless experience?
People are busy, as are your partners. Thanks to its above features, Apex Loyalty provides the seamless feeling that we are seeking amidst our daily life hassles. Modern presentation styles also positively influence members’ perceptions of the value offered by the reward.
- Is your rewards program mainly about material gifts or is there any room for social engagement?
The success stories Apex Loyalty was utilized in are exceptional examples to see how marketing automation can act as a tool for raising social awareness.
- Are you regularly updating your channel?
On-site engagement tools on Apex Loyalty are there for real-time and frequent communication.
More Apex Loyalty Offerings
As Apex Loyalty, we are aware that if there’s not enough redemption in your rewards program, there’s low engagement in your channel. If members are not tempted to redeem, there’s a high chance the rewards or the presentation of rewards are not relevant. Moreover, they might be out of context when it came to industry dynamics.
Including the above points, the average redemption rate for loyalty programs is impacted by more factors. Meanly, the industry is one of them. Apex Loyalty is especially powerful in this sense because our know-how comes from a vast variety of industries. Our skills in understanding your customer behavior and preferences result in perfectly tailored reward campaigns for your brand.
For channel members, points collection and redemption are probably among the most memorable components of their membership experience. We make sure to build your unique programs on this basis and making this memorable experience an exceptional one.
You can click the link https://www.apexloyalty.com/what-is-enrollment-rate-in-loyalty/ to read our previous article.