Creating Customer Loyalty & Growing Market Share From the Middle of the Channel
How one building supply wholesaler proved you don’t have to be at the top of the channel to see impressive results.
When this middle-of-the-market wholesale distributor wasn’t seeing the return they expected from their existing contractor loyalty program, they needed to transform it to spur participation at every level and drive year-over-year profits.
Strengthening the Program
Our client’s existing program of contractors and core enablement components provided a strong foundation to grow share with their contractors through higher engagement and incentives that drive the right behavior. ITA Group recommendations to build upon their incentive foundation included:
- Value Proposition
- Program Strategy & Rule Structure
- Awards & Recognition
Ensuring Value for the Entire Channel
To motivate participation, each stakeholder needed to understand the program’s value.
Motivating Participation With Communications
An ongoing strategic communications campaign truly showed retail locations and contractor customers the program value, educated them about updated program details, and encouraged retail locations to participate and contractor customers to enroll.
Communications Campaign Key Messages
Objective: Participate & Target Customers
Why should I invest money and time in this program?
- Great benefits of participation, including opportunity to build business relationships throughout the customer lifecycle to increase invoiced sales
- Easy way to run a customer marketing program without having to manage all the details day-to-day
- Simple targeting process to help cross-sell/upsell with the right offer to the right customer at the right time
- Tracking tool to keep a pulse on customer performance and allow engagement with those who are close to achieving their goals and those whose growth phases are behind them and need a focus on retention and development
Objective: Enroll in the Program
Why should I give the wholesaler my business?
- Rewards of first-rate merchandise and travel for purchasing things they need to do their job
- Exclusivity—they’re specifically chosen to participate because the wholesaler appreciates their business
Simplifying Technology for Improved User Experience
Strategic communication continued on the website, where retail locations and contractor customers saw only what they needed to be successful in the program. The comprehensive website included a simple targeting tool for retail managers to quickly target their ideal customers and a variety of dashboards that allowed contractor customers to see their progress toward goals and shop for awards.
Incorporating a Program Strategy With a Guaranteed Return on Investment
Increasing visibility to goals and ways to earn encouraged customers to go above and beyond the previous year’s sales. Retail locations chose a base and stretch goals (with a requirement the base goal for each contractor was at least 90% of the previous year’s invoiced sales). Each enrolled contractor began earning points at dollar one of invoiced sales, but they couldn’t unlock the earnings until they reached their base goal, guaranteeing retail locations a positive ROI.
Offering Outstanding Awards & Recognition
Once the contractor customer met their base goal, they redeemed points in the program catalog, which featured a personal travel concierge service and the latest items from top brands (including tools contractors could use to advance their business goals)
Reaping Positive Results
The results are clear—a well-planned and executed contractor loyalty program can create a positive impact for stakeholders who participate. Our middle-of-the-market wholesale distributor client saw a considerable increase in invoiced sales for enrolled contractor customers versus a baseline inactive group and a targeted but not enrolled group. The biggest growth comes from the middle, in the small-to-mid-size customers.
6% average YOY sales growth was reached by enrolled customers
275% program ROI
61% of respondents agree the program gives them a positive perception of the wholesaler
93% of points earned were redeemed, and 66% of customers that redeemed points would not have purchased the award they selected without their points