Every business starts and runs with the primary objective of earning profits in perpetuity. However, evolving industry trends, business requirements, inflation, consumer preferences, channel communication, and increasing competition push businesses to keep testing waters and implement new ideas to streamline operations and stay at par with the competition.
A lot of focus has been put by consumer brands on engaging with consumers as they are a direct source of revenue. For instance, businesses spend nearly 11% to 27% of their revenues on Consumer Loyalty Programs which contributes to a 5% to 10% increase in revenues. But brands often miss out on the underlying opportunities i.e. indirect revenue generators or the industry influencer i.e. Contractors. A few prominent brands such as AkzoNobel and Honeywell have been early movers in the space and have already implemented Digital Loyalty Programs for their Contractors/Technicians, Retailers, and other Channel Partners. Check out their platforms here Dulux Connect & Genetron.
The contractor community comprises hundreds and thousands of small business operators who spend millions of dollars to buy supplies, equipment, and material to perform their jobs. The complexity lies in understanding their purchasing and consumption patterns. The primary objective of a Contractor Loyalty Program is to create additional value for channel partners and dealers while driving certain behaviors that not only push top-line growth but also decrease the cost to serve.
According to Drilling Down: 2022 Contractor’s Loyalty Report, 40% of contractors prefer purchasing online while 60% opt for in-store or via distributors. ~90% of contractors want to be rewarded for every purchase irrespective of the purchasing channel.
The primary driver of enrolling in a program is the benefit aligned with it, which could be winning a cash prize, travel trip, non-cash items such as e-learning modules, webinars, etc. The brand has to ensure that it covers a range of benefits that could encourage contractors to participate in your Loyalty Program.
Points to consider while creating a Contractor Loyalty Program:
- Lock the Objective of the program: Before launching a Contractor Loyalty Program, be very specific about the purpose whether it is driving sales, engagement, loyalty, or participation. You may also assign percentages or targets in case you have multiple objectives.
- Simpler Program for Higher Adoption: This aspect is very crucial as often contractors opt out of a Loyalty Program if the contractor is not able to properly understand it or find the Loyalty Program task heavy. Simple participation steps, proper dissemination of information, easy redemption options, and instant access to reward points, along with timely notifications are essential for higher engagement and participation.
- Versatile Benefits: Brands should not restrict themselves to rewards, instead, they should offer e-learning/training opportunities to contractors to improve their knowledge and skill set. It is a known fact that humans are complex and every individual has their driving force, one contractor might prefer rewards while the other will prefer non-cash items. So, as a brand, you need to make sure that there are ample options to choose from.
- Gamify & Engage: It is advisable to add a Gamification element to Influence & Motivate beneficiaries’ behaviors strategically. Brands can enhance engagement by introducing different kinds of game elements such as Spin & Win, Polls, Scratch Cards, Lucky Draws, Leaderboards, Live Scores, etc.
Trends in the Contractor Incentivization Landscape
A slow and steady shift is expected to take place in the incentivization process with a growing preference for online channels, quicker access to information, and instant gratification, among others. Moreover, the pandemic has changed the dynamics of the industry with increasing migration to the online channel. For instance, Forrester’s research suggests a 200% increase in recognizing e-sellers/retailers and a 571% increase in rewarding non-transactional referral partners.
A steep incline is observed towards the adoption of digital rewards such as Visa/ Amazon vouchers, prepaid gift cards accepted by multiple brands, OTT subscriptions, or various other discount coupons, among others.
Moving away from Invoice-based Incentivization
O4S-Gynger helps organizations digitize their channel partners’ Incentivization Loyalty Programs to incentivize their trade partners to directly maximize sales of their brands. On the Gynger Platform, brands can create and communicate schemes directly to the channel partners and track the effectiveness of these schemes to ensure that the reward for incremental sales reaches the intended beneficiaries. It closes the information and incentivization loop between the brand and channel Partners by connecting them directly. Moreover, it provides a data-driven approach to running trade promotions with real-time analytics to review performance.
O4S-Gynger allows businesses to view their trade promotion effectiveness: rewards disbursed, total participation (engagement & participation), best-performing scheme, and sales generated, among others in a single view. Businesses have experienced unprecedented growth in their incremental sales with 10 times higher participation along with 80% higher MAU.
Know more about the benefits offered by the O4S-Gynger SaaS platform, here.