So, Why do contractor loyalty programs work for HVACR distributors?
- HVACR Contractors are in the service repair and the specify, bid, and buy business. Both types of work require a competitive bid for them to win and complete work. So, when two distributors are bidding for the same project and have similar prices and service who wins the jump ball? Simply put a loyalty program where a contractor earns something extra helps them win more jump balls.
- Loyalty programs are everywhere in your contractor’s personal life. We all are enrolled in loyalty programs for groceries, food, clothing purchases, and many more programs. We want to earn something extra for our loyalty and purchases in our personal life, and you expect the same in your business life.
The right loyalty program can move business to distributors from contractors who are motivated by these programs.
Why should you consider a Loyalty program as a HVAC distributor, or support a distributor program as a manufacturer?
If they do not work would Ferguson, Home Depot, WESCO, and other leading contractor focused partners year after year support a program. Ferguson’s program is in it’s tenth year (started in 2016). Public Companies do not support programs that do not generate a proper ROI.
Why do Contractor Loyalty Programs Work?
Loyalty programs drive growth because of the structure: The more you buy the more points and stuff you earn.
Here’s how it normally works:
- The contractor is rewarded when they increase business with the Distributor
- The contractor earns points for every sale they make with distributor (often they don’t get paid until they hit a preset threshold).
- Supplier partners help pay for the programs
- The distributor only pays for points contractors redeem.
A contractor loyalty program structure increases top-line sales with disengaged (or only slightly engaged) contractors. It also allows the organization to centralize development funds from multiple vendors into a single program that benefits everyone.
What does the research show on Contractor Loyalty Program?
At Channel Marketing Group we do a lot of research with distributors and contractors on these programs. We partnered with leading loyalty provider ITA Group on an in-depth report. The full report is available to Download. [Exclusive research] Drive more purchases with a contractor loyalty program that work. I’ve highlighted a few items from the full free report below.
Loyalty Drives Sales Growth
Loyalty programs have proven to increase purchase frequency and volume, with 49% of contractors reporting increased order frequency and 39% providing increased volume to sponsoring distributors after joining a program.
Positive Brand Perception
A loyalty program significantly improves contractors’ perception of a distributor’s or manufacturer’s overall value, with 63% reporting improved perception of channel partners with a program.
Untapped Market Potential
About 50% of contractors are not enrolled in any loyalty programs, and 22% of them are unaware of such programs—presenting a major opportunity to gain market share for distributors and manufacturers who have loyalty programs.
Contractor loyalty programs offer valuable data to segment contractors, analyze spending habits, and refine marketing campaigns—helping to optimize ROI while nurturing relationships.
Investing in a loyalty program isn’t just about incentivizing purchases; it’s about differentiating your brand, building stronger partnerships, and creating sustainable growth. With these insights, leadership teams can confidently position such programs as integral to their strategic roadmap.
Key Takeaways
A successful contractor loyalty program offers something to each audience segment.
- Manufacturers/vendors often don’t know who the end customer is or what is actually being sold. But with a loyalty program to track it, you will. Plus, they’ll have the margins to support purchase incentives (which you need).
- Contractors/customers have a lot of options when it comes to buying products, and they typically don’t have a lot of loyalty. They tend to buy products in spurts as supported by their individual business cycles, so rewards can incent them to purchase from you.
- You (i.e., the distributor/wholesaler/dealer) can use the program to connect the dots between vendors and contractors to sell more! Help manufacturers make their money go further through sales and brand awareness when they invest in your loyalty program. Give customers an incentive to buy the manufacturer’s products again and again.
[Exclusive research] Drive more purchases with a contractor loyalty program that work. or reach out to ITA Group for more information
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