In tough economic times, customer retention can play a key role in helping maintain revenue and margin stability. While an emphasis on day-to-day customer satisfaction is unquestionably a critical ingredient in fostering loyalty, some companies also use special benefits and rewards as additional motivators to keep customers coming back for more products and services.

 

Although customer retention is a business dynamic that crosses all vertical industries, our recent surveys with research partner IntelliCom Analytics have been examining vendor loyalty programs in the technology space – specifically, their role in business purchase decisions for communication platforms and applications.

 

With over eight hundred decision makers sharing their perspectives from all global regions, the findings revealed some interesting similarities – and differences – between larger enterprises and SMBs when it comes to these types of retention programs.

 

Although participation in vendor loyalty programs is fairly consistent across all size businesses - with roughly half of all businesses electing to participate - the percentage of companies that actually wind up spending significantly more with that vendor differs markedly between larger and smaller businesses.

 

For companies with less that 250 employees, 52 percent of decision makers indicated that participation in a loyalty program resulted in vendor spending that was at least 20 percent higher than it would otherwise have been. For enterprises with more than 250 employees, that level of increased spending was reported by only 35 percent of loyalty program participants.

 

The size of a business also clearly matters when it comes to the particular program incentives that drive increased retention. For small companies, nothing came close to the loyalty-inspiring power of programs that provide credits to offset the cost of future purchases. For enterprises, this type of discount mechanism didn’t even make the top three list. Instead, special privileges such as private R&D briefings, and direct access to vendor champions and executives, came in as the top motivators.