Contractors and other industry professionals weigh factors such as price, reputation and availability when purchasing building products and supplies for commercial or residential jobs. When all things are relatively equal in the buyer’s mind, an incentive can swing a product purchase decision one way versus another. But buyers report that the incentives have to be worth their while and that obtaining—and keeping—their loyalty can be a tricky balance of offering enough value to tip the scales in their favor.
James Nowakowski, president of Accountability Information Management Inc., a Palatine, Ill., firm that develops and operates various types of incentive programs for manufacturers, says that many contractors find that the effort to enroll and qualify products for these programs is worth the trouble as long as the pay-off is substantial and realistic to attain. “Companies need to be committed to their customers on all levels and that includes customer incentive programs,” says Nowakowski. “It’s important to have strong customer relationships, and it all comes down to building loyalty and maintaining trust. Rewarding customers for their faithfulness is part of that relationship.”
The president of a Cincinnati-area commercial contracting firm with more than 100 employees recounts how he knew nothing about incentive programs until he placed a large order with a manufacturer’s representative several years ago. The salesman informed him that his purchase would qualify for thousands of points in the manufacturer’s loyalty rewards program, and the president discovered how quickly the points added up. “Once I saw the points collecting, I kept doing it,” he says. “It got to be part of a game.”
The contracting firm president says an incentive program itself isn’t enough to warrant purchasing from one manufacturer instead of another; good service and product quality are most important to him. But the incentive program is a “motivator” to specify that manufacturer’s products, as long as the prizes are worthwhile. Trading earned points for money or a catalog item, such as a laptop computer, sports tickets or a home entertainment system, is much more persuasive than promotional trinkets.
Nowakowski says what’s interesting is how participants who essentially “lock in” their loyalty to win these prizes usually have higher opinions of these manufacturers. Research conducted by Accountability has found that participants rate the manufacturer more favorably on factors such as customer service, dependability and product performance. “This loyalty translates into much greater value for the manufacturer over the long run than simply beating the competition on a single job bid,” he says.
ACCOUNTABILITY INFORMATION MANAGEMENT INC., located in Palatine, Illinois, is a marketing research and marketing communications company with extensive knowledge in branding strategies and print advertising behavior through database management and technologies. Clients of Accountability include magazine publishers, associations, and public and private companies in manufacturing, construction and other industrial markets.
For more information on designing and administering a market-specific program, please contact Sue Garrison, Interline Creative Group, 847-358-4848, sueg@interlinegroup.com.
