Manufacturers and distributors face increasing pressure to differentiate their products and build stronger relationships with contractors despite a crowded and uncertain market. Contractor loyalty programs have proven to be a successful way to drive measurable growth, improve customer retention and capture valuable market insights. And yet, many organizations struggle to know what contractors look for in programs.

To address the issue, ITA Group commissioned Channel Marketing Group to survey contractors from a wide variety of businesses in the new study “Building contractor loyalty: Data-backed insights reveal what drives contractors’ purchasing decisions.” The results showed overwhelming interest in loyalty programs, especially when they’re done right. Our strategic insights will help you design a program that delivers measurable results.

Key study findings:

• 57% of contractors reported they’ll make purchases based on rewards they’ll earn
• Half of surveyed contractors were enrolled in a program, but half were not
• Many contractors who weren’t enrolled said being in a loyalty program it would likely influence their purchases

Most contractors who weren’t enrolled were willing to join a program if it was offered to them.

The results show comprehensive and enticing loyalty programs do, in fact, grow market share for the organizations offering them.

The growth can be seen in both increased purchase frequency and volume.

• 49% of contractors said joining a brand’s loyalty program increased their decision to purchase from that brand over others.
• 39% felt that joining the loyalty program increased the volume of products they purchased from that brand.

Backed by this new data and our years of incentives experience, our team next explored ways to use this direct feedback to build a loyalty program that gets results. We organized the results around three key categories.

• How to differentiate your contractor loyalty program in a crowded market
• What incentives and rewards motivate contractors and what they want to see in a program
• Where you can maximize your current (or future) loyalty program to improve its perceived value and, ultimately, drive more purchases

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Key takeaways: 3 steps to build a better contractor loyalty program

1. Ensure rewards resonate with different contractor audiences

Impactful loyalty programs come from offering the right rewards to the right contractors at the right times. Sounds simple, but how do you know what mix of rewards motivates the most contractors? That was one of the key questions we asked, and the research revealed practical rewards get the most attention.

• Contractor size contributed to which rewards were preferred: smaller contractor companies favor rewards that improve profitability and their business, while larger ones seek personal rewards and points.
• Customizing rewards to reach multiple audiences and encouraging low and middle performers helps your program have the broadest appeal.

2. Provide a better contractor participant experience 

Contractors are busy people and a complicated loyalty program will make them disengage quickly. For your program to be successful, it needs to be simple to use with easy-to-track rewards. Add a user-friendly online portal for status updates, program rules, special promotions and new product information to create the program experience that contractors want.

• Loyalty programs in the construction industry can start to feel identical due to product and service similarity—a participant experience that makes contractors feel cared for and appreciated is a huge differentiator.
• Common challenges to the participant experience, such as difficulty understanding the program rules, can be overcome by simplifying the program mechanics. (ITA Group’s incentives experts can help with this!)

3. Listen to what your contractors are asking for

Contractors were clear in their responses that a well-designed loyalty program—one that addresses both their wants and needs—is of great value to them in making their purchasing decisions. They want to deepen their partnership with your organization in a way that’s mutually beneficial.

• 54% of surveyed contractors not enrolled in a loyalty program weren’t aware of any being offered by companies they do business with
• 83% of surveyed contractors not enrolled in a loyalty program said they’d enroll if one were offered to them

Evolve your contractor loyalty program with the help of incentive experts

An effective contractor loyalty experience is at the center of driving engagement, increasing sales and enhancing brand perception. Is yours exceeding contractors’ expectations?

ITA Group’s team of experts is ready to help you build, or refresh, your contractor loyalty program so it provides the rewards and experience that motivate contractors. Backed by data and our full suite of incentive solutions, we’ve helped clients transform how business feels for more than 60 years. Contractor loyalty programs are complex, but you don’t have to tackle it alone.

Check out the insights in our research and then let’s talk about actionable next steps to improve your program.

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