Road map to contractor loyalty

Drawing on interviews with over 1,100 contractors across five exterior building product categories, Principia released new research on contractor loyalty programs.

The results show that contractor loyalty programs provide tangible benefits to both product manufacturers as well as contractors. Specifically, well-executed programs results can be seen in:

• Increased share of wallet: Manufacturers’ share of contractors’ wallet increases when contractors are enrolled in a manufacturer’s program. Contractors participating in only one loyalty program give 62% of their wallet to that program's brand, compared with only 21% being captured for brands where no program participation exists. In addition, contractors are far more likely to recommend a manufacturer whose contractor loyalty program they are participating in.

• Higher growth rates: Contractors participating in contractor loyalty programs have realized greater revenue growth than those not participating. This is a powerful incentive for manufacturers to market contractor loyalty programs to contractors.

"Building product manufacturers are creating or refining loyalty programs using Principia’s research as a ‘playbook’ to understand the critical elements to make their programs successful,” according to Rick Dunham, research manager at Principia. “Loyalty programs that follow these prescriptive guidelines will realize a higher return on investment by focusing on the aspects that contractors find most valuable, eliminating extraneous aspects or unused elements of the program.”

Principia’s detailed analysis is in the consulting firm’s research: Best Practices in Contractor Loyalty Programs 2015. The report provides building products manufacturers with a comprehensive breakdown for creating, implementing, promoting and maintaining effective contractor loyalty programs.

In addition, Principia reveals the foundational building blocks of successful loyalty programs and recommended strategies for each, including 1) enrollment, 2) participation, 3) benefits offered, 4) marketing and communication and 5) technology. Each program element is needed and must be structured correctly to be successful, according to the study.