Building market share through contractor loyalty

Segmented incentive strategy with points and 
group travel has delivered strong ROI for 10+ years

contractor loyalty program communications on laptop

After a market recession, this leading distributor of construction and industrial supplies needed to grow profits across its 569 independent branches in 49 states. Branch leaders wanted a contractor loyalty program, but corporate leadership knew it had to be the right initiative to reach its diverse contractor, service-shop and replacement-part audiences.

Tailoring objectives by audience

Creating value up and down the distribution chain was the ultimate goal, so the distributor started with an assessment to establish each audience’s objectives. Through surveys and research, they found many objectives were shared. They focused on the contractors because they had the highest purchase potential.

 

incentive objectives by audience type

Growing market share through personalized contractor goals

Incentivizing incremental growth (instead of rewarding current business) ensured a positive ROI. They needed to convince local branch leaders and sponsors to buy in—literally and figuratively—to a self-funding model.

The solution? Identifying the contractors with potential to increase purchases and assigning them tailored goals. Each contractor’s base goal was based on purchasing a predetermined percentage above their previous year’s purchases. Earnings would only be distributed after they hit the goal, motivating contractors to purchase more while protecting the distributor from massive payouts. Stretch goals also unlocked after the base goal was achieved, keeping up their program engagement after the initial payout.

graphic defining base and stretch goals for contractors

Extending the benefits to all audiences

Growing contractor loyalty affected the other audience types. The chart below shows how each segment benefited from the program’s technology, data and unique goal structure. 

graphics showing incentive effects on the entire channel

Using program data to maximize impact

Through annual data analysis, ITA Group recommended ideal contractors to invite to the program, associated goals, reward type and projected ROI, ensuring a turnkey program. Local branch leaders also had the freedom to target contractors autonomously.

target incentive customer data

Configuring the technology by audience

The web platform included on-the-go accessibility, segmented views and a simplified user experience. ITA Group currently manages program administration, lessening the administrative burden for program owners. 

configurable incentive technology
technology by audience type

Motivating with points-based rewards and incentive travel

The rewards that inspire top contractors are often unattainable for middle performers, causing them to disengage. To solve this, the distributor uses two reward types: points-based rewards for most contractors and group travel rewards for high-volume contractors.

Contractor reward options

1. Points-based rewards

Points accumulate with each purchase, tracked via the program website and printed statements.

Online storefront experience

  • Brand-name merchandise and experiential awards
  • Thousands of options carefully curated in 10+ categories
  • Personalized reward experience according to user interest
  • Simple redemption process

2. Group travel rewards

Group travel for high-volume contractors provides fun  networking opportunities.

Group Travel Features 

  • Exclusive experiences, daytime activities and evening events
  • Strategic pre-event, on-site and post-event communications
  • On-site gifting
  • High-touch, concierge-style service

Educating through partner marketing

Local branch leaders gain partner marketing that helps them operate the program without burdening their internal teams. An annual mixed-media campaign supports each local branch, educating leaders on the program while demonstrating how easy it is to target ideal contractors.

Engaging new contractors

Tailored communications feature elements for “deskless” contractors in the field to maximize participation and goal achievement any time, anywhere.

  • 1:1 targeted emails for ad hoc promotions and goal tracking
  • Statement mailers featuring progress-to-goal status
  • Promotional postcards and mailers
  • Mobile site for promotion updates and checking earnings
  • Reminders to redeem points
  • Promotional items for program awareness

Growing year-over-year sales for 10+ years

What started as a need to rebound from a recession developed into a long-term contractor marketing program that continues to drive contractor growth and sales.

For more than a decade, the program has mutually benefited all its audiences through stronger relationships, risk-free incentives, enhanced brand awareness and better data visibility. And it continues to evolve, promising even greater
success in the decade to come.

We were excited to see that we could earn a nice LG dishwasher for our kitchen upgrade. As it wasn’t an out-of-pocket cost, we are very excited to be able to increase our budget for the rest of our kitchen upgrade. Thanks!

Contractor Customer

We work hard ... thank you for making a reward program that benefits not just us, but our employees and our family. Thank you!

Contractor Customer

Results

$82M

annual sales revenue average

$15M

annual average growth margin

447%

average program ROI over life of program

187%

greater purchases by targeted contractors vs. nontargeted

95%

attendee satisfaction (most recent travel incentive operation)

90%

annual catalog award redemption