Many HVAC distributors, and some manufacturers, run incentive programs, for their customers in efforts to curry favor (loyalty) and/or to drive incremental business.
In the current economic environment, an incentive program can help you take market share and drive growth, for a very nominal (if any) net investment, especially if the program is based upon customer-specific growth goals (funding for loyalty on a first dollar basis is, as they say, “a fools game” given distribution margins.)
And while many think programs should only be run on an annual basis, I’ve had clients have very good experiences launching at any time. Why? Because it is a new strategy for them, disruptive in the market, and unexpected by their competition. Further, your customers are buying from you throughout the year, why not capture the opportunity?
Incentive travel programs can help accelerate sales, especially for contractor-oriented distributors, as well as share appreciation for a customer’s support. And over the past few years, we’ve all endured much!
Why do these programs work? Because they provide contractor management with another reason to consider a distributor when they have discretion in whom to award business too (assuming other business parameters are “close) and are a marketing platform for distributors.
Recently our sister publication, ElectricalTrends, shared an article highlighting an initiative from a South Carolina-based distributor, Atlantic Coast Electric Supply (ACES), who ran an incentive program in 2022, which spurred the thought of “why wait?”
According to ACES’s press release:
“On April 23, 2023, Atlantic Coast Electric Supply (ACES), headquartered in Summerville, SC, welcomed a group of their customers in Nashville, TN for a 4-Day/3-Night customer incentive program. Nearly 200 customers, employees, and their guests attended. Customers earned points for their purchases during the qualification period from January 1 – December 31, 2022. Dean B, “I have no idea how you could have made that experience any better, what a great once in a lifetime event it was. I can’t wait to be a part of the ACES Going Places again.”
The program kicked off with an ACES exclusive event for guests at The Grand Ole Opry House. John Marshall, President and CEO, opened the evening proudly announcing that this was the first time ACES has ever hosted an incentive program. Guests enjoyed an all-inclusive experience featuring a songwriter showcase by The Warren Brothers, Liz Rose, and Josh Kear followed by dessert and beverages on stage where they could step inside the iconic circle. The evening ended with a backstage tour and departure through the artist’s exit.
The Country Music Hall of Fame was the location for the second private evening event. Guests enjoyed touring the museum, reception in the hallowed Hall of Fame Rotunda, and an ACES business meeting was held in The Ford Theatre. During the meeting ACES took the opportunity to recognize the premier trip sponsors, Legrand, ABB, and Siemens presenting each with their own platinum record. The stand-up comedy from one of Nashville’s favorites, Aaron Weber, gave some good laughs to close out the very special evening.
Lastly, they said farewell to Nashville with a party at the iconic Wildhorse Saloon. Bull riding, live band, caricatures, dancing, and everyone grabbing a Nashville hat to take home with them from the ACES hat wall. Jennifer W., “This was the best customer appreciation experience I have ever witnessed or been a part of. I’m grateful that I was able to attend and meet such wonderful people.”
The accommodations were through The Gaylord Opryland Hotel and Resort in Nashville, TN. Guests enjoyed a daily breakfast buffet, a choice of daily optional activity that ranged from mixology class, clay target shooting, and Spa treatments to Nashville tours, golf, and even a personal experience with Meghan Linsey at her home! Sara E., “Honestly it will be hard to top. It was an incredible experience!”
When asked why to conduct such an event at this time, John Marshall commented, “Of course, the trip is a way to reward those customers that are growing their business with us, but our goal for doing this trip is to strengthen and deepen our relationships with customers, on a more personal level, building a higher level of trust, which will benefit all of us.”
Takeaways
The key with an incentive program, from a business perspective, is that it needs to be much more than a “trip”. It needs to be performance-oriented as well as rewarding customers and being memorable.
And ACES delivered on the business-aspect of the incentive program. They shared that:
- The 200 attendees represented approximately 50 different contractors with a number of companies earning multiple sets of trips. The takeaway – broad-based customer support and ACES was able to “take share” within their market.
- The company achieved “Healthy double-digit growth from the participating customers overall during the program with those that went to Nashville and those that were part of the year long program. This was a first for some of the customers and most of the ACES team that attended.”
- Suppliers benefited from the program through sponsorship but, more importantly, they were integrated into the program with monthly specials, bonus points, and promoted (with their products) throughout the year via a robust communications campaign. In the words of one manufacturer, “It was awesome.”
- Feedback from one contractor summed up the experience, “This trip was nothing short of amazing. It was not just a trip; it was an experience of a lifetime. Left with new friends and contacts, as well as a lifetime of memories. The entire ACES team was helpful, whether they were helping coordinate/direct or just enjoying it with us. John Marshall, the ACES team, as well as the event coordinators, literally thought of everything going above and beyond. Each guests needs and wants appeared to be met above their expectations. We greatly appreciated the opportunity and look forward to qualifying again. ACES Going Places!
- While South Carolina has had a growing market, the incentive program enabled the company to further capitalize on its opportunities and achieve above market growth.
Congratulations to Atlantic Coast Electric Supply for a creative marketing strategy, utilizing an American destination (shows people can be very happy without going out of the country to travel), and being willing to market even in good times!
And if you’re running an incentive program, check out this article on regarding taxes on incentives and how to manage them.
If you currently run an incentive program, perhaps now is the time to re-evaluate the structure of the program and determine if it is achieving your goals? If you are not / haven’t consider one, perhaps looking at it as a marketing initiative that cost-effectively drives revenue, and not a “trip”, should be a consideration?
As an aside, Channel Marketing Group has extensive experience in designing the program structures for incentive programs. Years ago, I spent 15 years in the incentive industry and continue to have clients use these strategies. Over the years I’ve helped clients in over 60 industries develop incentive programs … from $10 million distributors to multi-billion companies (and for manufacturers.) The award component (trip, merchandise, gift cards, cash rebate, etc.) is outsourced; however, the program structure is developed, a pre-program proforma is developed, supplier engagement can be supported, and program management support is provided. Give me a call if we can be of service. I was not involved in the Atlantic Coast Electric Supply program, however, Ken Cain, a member of the CMG Executive-in-Residence Program was involved.
