How one expertly designed program in the building supply industry has leaned into expert incentive strategy, execution and tactics to drive year-over-year profits for more than a decade.
Growing Sales & Market Share With A Contractor Loyalty Program
In the wake of a market recession, this leading distributor of residential and industrial supplies lacked necessary market share among its 569 local independent sellers in 40 states. Growing sales was key, and distributor leadership knew local sellers had interest in a contractor loyalty program. But without the expertise to devise and manage a profitable initiative, the wholesale distributor engaged ITA Group to consult on driving loyalty among its contractors, service shops and replacement parts retailer audience.
Engaging an Industry Leader to Maximize Value
What would’ve been a heavy lift for a slim-margin wholesaler on its own turned into an expert-led loyalty program that created value up and down the distribution chain. Contractor customers at a local level were the initial focus because of their purchase potential, but further audience assessment through tactics like surveys, assessments, research and analysis ultimately revealed clear benefits for all.
A Self-Funding Model Targeting Contractor Growth
Designing the program to generate incremental growth versus rewarding customers for business they were already doing ensured a self-funding distributor model. But getting local sellers and sponsoring manufacturers to buy in, literally and figuratively, meant offering an initiative with manageable bottom-line impact.
The strategy? Assign contractors a purchase goal beyond their previous year’s business, and unlock earnings when they’ve reached it, guaranteeing local sellers a positive ROI by offsetting their program participation buy-in fee.
Program Design Targeting a Contractor Audience Primed for Purchase
Identifying existing contractors who could grow their book of business with local sellers ensures wallet share growth. And because awards are not released until contractors’ personalized Base Goal is met, the program guarantees profitability.
Expert Guidance Each Step of the Way
Annual data analysis allows ITA Group to recommend ideal contractors, associated individual goals, award type and projected ROI, ensuring a truly turnkey program. In tandem, local sellers benefit from the freedom to target contractors autonomously including award type (trip or points) and custom Stretch Goal.
Technology Tailored to Each Stakeholder
A custom web platform includes views personalized for each stakeholder audience, encouraging engagement according to their role in the program. ITA Group manages program administration, lessening the administrative burden for program owners.
Motivational Award Opportunities Tailored to Contractors
The ability to consistently balance targeting contractors for loyalty and growth while rewarding and recognizing top contractors came to life through two unique award avenues. Determined up front (during the targeting process) by local sellers, the strategy ensures a flexible, relevant contractor award experience.
Positioning Local Sellers to Succeed With Contractor Marketing
Enabling local sellers to successfully operate an ongoing loyalty program continues to drive year-over-year growth. Often lacking marketing expertise or background, local resellers benefit from an investment that doubles as consistent customer marketing.
Educating Local Sellers
An annual strategic mixed-media campaign supports each local reseller as they work toward an individualized ROI. Communication elements educate local resellers on the program while demonstrating how easy it is to target, enroll and engage ideal contractors.
- Program website
- Program guide
- Engaging End-User Contractors
Additionally, communications and marketing engage contractors on local sellers’ behalf, with elements geared toward contractors in the field (not behind a desk) to maximize participation and goal achievement.
- 1:1 targeted email communications for extra promotions and goal tracking
- Statement mailers featuring progress-to-goal
- Promotional postcards and mailers
- Mobile site to check earnings
- Promotions to cash in points
- Dimensional/promotional items to keep the program top of mind
Contractor Engagement Benefits the Entire Channel
An initial strategy positioning the distributor to rebound from a market recession ultimately morphed into a long-term contractor marketing program that continues to instill local market loyalty today. The initiative reflects a 56% increase in purchase level by contractor customers who achieve their stretch goal.
A Self-Funding Distributor Initiative
Building a contractor loyalty program designed to generate contractor purchase growth, targeting the right contractor participants—those with profitable growth potential—and working with product manufacturers to help fund the ongoing effort ensures a self-funding distributor initiative.
Proven Results Up & Down the Channel
Moreover, the decade-plus program boasts year-over-year success and benefits the entire channel. In addition to local sellers building relationships, increasing sales, and benefiting from a risk-free contractor incentive, sponsoring manufacturers enhance brand awareness, secure data they wouldn’t otherwise have access to, and generate additional revenue through strategic promotions.