Growing Sales & Market Share With a Targeted Customer Loyalty Program
How one expertly designed program in the crowded building supply industry has leaned into expert incentive strategy, execution and tactics to drive year-over-year profits for more than a decade.
In the wake of a market recession, one leading retailer needed to activate customers to grow market share and increase customer lifetime value (CLV) among nearly 600 retail stores in more than 40 states. Growing sales was key, and brand leadership knew retailers had interest in a customer loyalty program. But without the expertise to build and manage a profitable initiative, the brand engaged ITA Group to consult on driving loyalty among its retailers’ customer audience.
Engaging an Industry Leader to Maximize Value
What would’ve been a heavy lift for a retail brand on its own turned into an expert-led loyalty program that created value up and down the distribution chain. Customers at a local level were the initial focus because growing their books of business would ensure wallet share and growth. But, further audience assessment through tactics like surveys, research and analysis ultimately revealed clear benefits for all.
A Self-Funding Model Targeting Customer 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 sponsoring manufacturers and retailers to buy in, literally and figuratively, meant offering an initiative with manageable bottom-line impact to stores while creating an opportunity to offer unexpected earning opportunities for program participants.
The strategy? Assign customers a goal beyond their previous year’s business, and unlock earnings when they’ve reached it, guaranteeing retailers a positive ROI by offsetting program costs.
Program Design Targeting a Customer Audience Primed for Purchase
Identifying existing customers who could grow their business with retail stores ensures wallet share growth. And because awards are tiered and unlocked as participants advance in the program, the program guarantees profitability.
A Simple Customer Targeting Process
Retailers can review sales figures, potential ROI and margin, and filter those they'd like to include within the program.
Data tools show projected margin and ROI if contractors achieve goals based on historic performance while recommendations from ITA Group's data analysts guide the process.
Expert Guidance Each Step of the Way
Data analysis allows ITA Group to recommend ideal customers retailers should target, associated individual goals, award type and projected ROI, ensuring a truly turnkey program. In tandem, retailers benefit from the freedom to target customers autonomously, including award type (trip or points) and custom goal (which connects customers with Tier Two benefits).
Technology Tailored to Each User Audience
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.
User Experience at the Forefront
Ongoing upgrades to the custom technology platform simplify the user experience.
Flexible technology empowers contractors and local sellers to engage anytime, anywhere, and features real-time reporting to track purchases.
Motivational Award Opportunities Tailored to Customers
The ability to consistently balance targeting customers for loyalty and growth while rewarding and recognizing top customers came to life through two unique award avenues. Determined up front (during the targeting process) by retailers, the strategy ensures a flexible, relevant customer award experience.
Positioning Retailers to Succeed With Customer Marketing
Often lacking marketing expertise or background, retail stores benefit from a communications investment that doubles as consistent customer marketing.
An annual strategic mixed-media campaign supports each retail store as they work toward an individualized ROI by customer.
- Program overview and customer targeting training
- Launch kit mailing with program and customer guides
- Program website
- Promotion and transaction emails and text messaging
- Conference materials
- Segmented communications engage customers.
- Comprehensive launch guide
- 1:1 automated email for promotions and goal tracking
- Multimedia engagement campaign
- Mobile site to check earnings
- Award redemption reminders
- Award and travel mailings
Extending Manufacturer Brand Connections
Ongoing touchpoints keep program sponsorship benefits top of mind.
- Push reports to guide quarterly promotion strategy
- Multimedia communications reminding sponsors to:
- Plan for the program’s top-customer trip
- Access geographic pull-through data to guide business decisions
- Leverage digital messages
Customer Engagement Benefits the Entire Channel
An initial strategy positioning the brand to rebound from a market recession ultimately morphed into a long-term customer marketing program that continues to instill local market loyalty today. The initiative reflects a 56% increase in purchases by customers who unlock Tier 2 benefits.
A Self-Funding Loyalty Initiative
Building a customer loyalty program designed to generate customer purchase growth, targeting the right customer participants—those with profitable growth potential—and working with product manufacturers to help fund the ongoing effort ensures a self-funding loyalty 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 retailers orchestrating relationships, increasing sales and benefiting from a risk-free customer incentive; sponsoring manufacturers enhance brand awareness, secure data they wouldn’t otherwise have access to, and generate additional revenue through strategic promotions.
$82M annual sales revenue average
$15M annual average growth margin
447% average program ROI over life of program
187% greater purchases by targeted customers vs. non-targeted