In my experience, contractors can be a fickle bunch. In today’s hyper-competitive HVACR market, contractor loyalty is more important – and more elusive – than ever. A new report from ITA Group and Channel Marketing Group, Building Contractor Loyalty, reveals just how much loyalty programs influence contractor behavior.
Contractor Loyalty by the Numbers
- 57% of contractors say they choose a distributor or manufacturer because they can earn rewards in a loyalty program.
- 50% are enrolled in at least one loyalty program.
- 49% purchase more frequently after enrolling in a program, while 39% increase their total purchase volume.
- 22% of all contractors – over half of those not currently enrolled – are unaware of any loyalty programs from their suppliers.
- 87% of contractors not enrolled in a rewards program say the availability of one would likely increase their purchases.
- 63% say a loyalty program improves their perception of a supplier’s overall value.
The message is clear: contractors are motivated by rewards, but there’s a significant awareness gap. If you’re not offering a visible, relevant program, you’re leaving money, and loyalty, on the table.
How Loyalty Programs Influence Behavior
The report highlights an important nuance: loyalty programs are more likely to increase how often contractors buy from you (frequency) than how much they buy overall (volume). This aligns with the RFM (Recency, Frequency, Monetary) model used in the study. When a program puts your brand top-of-mind, you become the go-to supplier for routine purchases, even if total spend grows more gradually.
Just as important, loyalty programs shape how contractors view your business. In a market where products and prices often look the same, perception can be the deciding factor.
“All products within a category are commodities. Why a customer buys comes down to the relationship, personal or through service(s), that we deliver. The customer can frequently purchase the brand from multiple distributors. I need to promote ‘why me.’”
—Building Contractor Loyalty, ITA Group & Channel Marketing Group
Why Loyalty Programs Miss the Mark
If your past loyalty efforts have fallen flat, you’re not alone. The report identifies three main pitfalls:
- Low awareness: Many contractors simply don’t know a program exists.
- Complexity: Overly complicated rules, tiers, or redemption processes frustrate users.
- Lack of ongoing engagement: Programs that aren’t actively promoted or updated quickly lose relevance.
Contractors want rewards that are straightforward and meaningful—not gimmicks or trinkets.
— Simplifying program mechanics and creating engaging structures can significantly improve contractor satisfaction and participation. If a loyalty program can make it easy to track earnings and tier progress, and if its rewards are valuable enough to motivate additional purchases, it keeps contractors and their teams focused on purchasing from you.—
What Contractors Really Want
Practicality rules. The research shows contractors prefer:
- Discounts on future purchases
- Gift cards
- Billing credits
Smaller contractors tend to favor immediate discounts, while larger firms may appreciate points or personal rewards. The key is relevance: rewards should fit the way each contractor does business.
Best Practices for Building Loyalty
Based on the latest research and real-world feedback, here’s how to design a loyalty program that delivers:
- Keep it simple. Straightforward structures and easy-to-understand rewards win.
- Offer a strong start. Use double points or sign-up bonuses to drive early engagement.
- Promote everywhere. Make sure counter staff, sales reps, and digital channels all push the program.
- Tailor rewards. Match incentives to contractor size and preference.
- Use progress tools and nudges. Show contractors how close they are to their next reward, and send reminders if they haven’t purchased in a while.
The common thread? Keep the contractor at the center of the design. Build around how they actually work, buy, and make decisions.
The Bottom Line
Loyalty programs aren’t a silver bullet, but the data shows they’re a powerful differentiator, especially in a “sea of sameness.” If you’re not using loyalty to drive contractor share, your competitors will. In today’s market, where price, product, and service often feel interchangeable, loyalty may be the only real differentiator left.
Based on “Building Contractor Loyalty,” ITA Group & Channel Marketing Group, November 2024
