From push to pull: Digital loyalty programmes and their impact on industrial buying behaviour

Digital loyalty programmes are emerging as an attractive strategy for business-to business (B2B) marketers hoping to increase repeat sales through deeper customer engagement. While loyalty programmes are well-known in consumer markets, evidence from industries like grocery stores, hotels, and airlines (Sharp & Sharp, 1997) indicates that such programmes may not significantly influence actual behavioural loyalty.

Beyond the fundamental questions of whether and how a digital loyalty programme might enhance repeat buying within its B2B scheme membership, further questions arise as to how and why such a marketing intervention might be adopted in channel marketing and at various levels within the supply chains.

The study adopts a mixed methods approach. In-depth exploratory interviews were conducted with a purposive sample and analysed thematically. Subsequently, observation, benchmarking, and modelling of repeat buying patterns were performed using loyalty programme membership data from two heavy industrial goods manufacturers in the United States. This research introduces a systematic framework for measuring the effectiveness of loyalty programmes in this industry, utilising two datasets. The first comprised an existing distributor rebate scheme with 1,896 distributors over twelve months. The second tracked membership buying data over eighteen months, supplied by 90 distributors in exclusive territories during the scheme's introduction, expanding from 10 to 263 end-user firms.

Findings contribute to the knowledge of long-term loyalty in the industrial customer base, particularly their response to loyalty programmes. They align with the idea that such schemes first recruit the heaviest brand buyers while having minimal impact on overall revenue (Meyer-Waarden & Benavent, 2006). Despite rigorous testing using the nine-test framework based on established empirical generalisations, the buying behaviour of programme members was found to be normal and predictable by the NBD model, indicating no change in repeat buying behaviour as a result of programme interventions.

The findings challenge prevailing beliefs in relationship marketing and present novel and independent contributions to both theory and practice, mainly (1) offering more theoretically robust tests for evaluating behavioural loyalty in B2B programme membership (2) the need to shift programme objectives to maintain sales from the lightest rather than the heavy buyers, and (3) using digital loyalty programmes for a range of wider benefits beyond changing the behaviour of existing members. A programme of future research is also specified.