According to the National Association of Manufacturers, in 2019 manufacturers in the United States accounted for 11.39% of the total output in the economy and employed 8.51% of the workforce. New growth and opportunities are attracting new competitors and as a result, manufacturers are finding it more challenging to retain and grow their customer base.
In a Bain & Company study B2B companies with high customer loyalty were linked to higher sales growth, increased market share, more employee engagement and retention, and greater profitability. It was also found that such loyalty leaders tend to grow 4 to 8 points above their market’s annual growth, further demonstrating the value of investing in customer loyalty and incentive programs.
Yet 68% of B2B executives say customers are less loyal than they used to be. Investing in customer loyalty and incentives programs is a proven method for accelerating organic growth; however manufacturers struggle with out-dated technology and inadequate analytical tools that lack the modern capabilities for generating long-lasting customer loyalty.
Technology Is Lacking
According to Precision Marketing Group 71% of B2B buyers start researching products and suppliers via online resources before even speaking to a representative. The majority of B2B purchases are driven by information; providing clear product recommendations supported by specific rationale was found to increase purchases by 86%. This means B2B brands can better differentiate themselves to prospective customers by engaging and providing beneficial product information on digital channels.
Yet manufacturers are lagging behind in technical sales and account capabilities. A study by Deloitte revealed that “despite their customers’ increasing preference for digital engagement, few B2B manufacturers have made significant investments in digital commerce capabilities.”
This slows the sales and negotiation process for digitally-savvy buyers who are looking for relevant data on product performance, maintenance, and service. The lack of sales automation and integrated data systems also affects manufacturers’ ability to gather actionable insights into their buyer’s journey.
Channel Partner Relationships
Channel partners who act as advocates and provide product recommendations are vital to manufacturing companies' success. When asked, the customers of one large industrial manufacturing company revealed they follow 90% of the recommendations made by the channel partners. But the internal systems used by manufacturers and channel partners to collaborate are often outdated, relying on manual inputs/updates and lacking information in real-time. This makes it challenging for manufacturers to:
educate and train channel partners on new products
streamline pricing and deal approval process
provide seamless and responsive sales, service, and support across various business units and geographies.
Loyalty and Incentive Platforms Help Manufacturers:
In one example, Davi Kahn, vice president of Hospitality Supply group within HD Supply, explained that their Voice of the Customer program is “focused on assessing the customer experience from start to finish, capturing customers’ needs and desires, and using that input to drive our business decisions.”
Like HD Supply, other manufacturers can utilize loyalty programs to gather actionable customer data via feedback channels, surveys, and product reviews. Developing a better understanding of their customers’ priorities, drivers, and values can also assist manufacturers in proactively addressing any potential risks of customer defection or attrition.
Create more personalized customer experiences: Manufacturers gain a significant advantage over competitors by focusing on customer experiences. Boston Consulting Group found that brands who integrate digital technology and proprietary data to create personalized experiences “are seeing revenues increase by 6% to 10% --- two to three times faster than those who don’t.”
Traditionally the desire for attentive, one-on-one customer experiences was a B2C customer trait; but now B2B industry customers are beginning to demand the same. In one study 71% of manufacturing service teams say they’ve become more focused on creating deeper customer relationships, and 63% also say they’ve increased focus on personalizing service interactions.
Manufacturers can increase sales opportunities by utilizing personalization approaches to provide customers with the right information at the right time and on the right device. A loyalty or incentive platform helps manufacturers collect and analyze the customer data used for developing personalized interactions, such as:
Leveraging data-powered insights, manufacturers can create more valuable sales offers, smarter product recommendations, and tailored incentives that help current and future customers make smarter buying decisions.