In the competitive building materials industry, customer retention is as important as customer acquisition. One distributor’s success story demonstrates how a thoughtfully crafted contractor loyalty program not only increased repeat business but also strengthened long-term relationships and drove measurable revenue growth.
Background
A mid-sized building supply distributor in the Midwest served a broad range of contractor customers—ranging from small independent builders to larger regional firms. Despite offering competitive pricing and a diverse product range, the company noticed stagnation in contractor repeat purchases and minimal differentiation from nearby competitors.
Contractors were price shopping frequently and there was little emotional or brand loyalty. The sales team identified a need to deepen relationships with these clients and reward those who consistently did business with them.
The Loyalty Program Strategy
The company launched a contractor-focused loyalty program named “BuildBack Rewards”, tailored specifically for its B2B customers. The goal was to encourage repeat orders, larger bulk purchases, and strengthen brand preference.
Key Elements of the Program:
Points-Based System: Contractors earned points based on order value, frequency, and categories of products purchased. Higher-margin product lines earned more points.
Tiered Membership Levels: Bronze, Silver, and Gold tiers offered increasing benefits such as early access to promotions, exclusive events, and free delivery.
Non-Cash Incentives: Points could be redeemed for tools, branded merchandise, and even business perks like training sessions or fuel cards.
CRM Integration: The program was tied into the company’s CRM, allowing sales reps to view loyalty status and personalize interactions.
Quarterly Performance Reports: Contractors received custom reports showing their loyalty progress, projected tier upgrades, and bonus point opportunities.
Results and Outcomes
Within 12 months of launch, the impact of “BuildBack Rewards” was clear:
27% Increase in Repeat Orders: The frequency of purchases rose among enrolled contractors, particularly in the Gold tier.
22% Growth in Average Order Value: Contractors began bundling products to maximize their points.
Improved Product Diversification: There was a noticeable uptick in sales of underperforming but high-margin products included in double-point promotions.
Higher Engagement: Loyalty members were more responsive to marketing campaigns and 36% more likely to attend supplier events and product demos.
Stronger Sales Relationships: Sales reps reported improved client rapport, as the loyalty program gave them a new way to add value to the contractor’s business.
Lessons Learned
Simplicity Matters: The program was designed to be easy to understand and manage. Complex rewards systems can discourage participation.
Contractor Input Is Crucial: Feedback from key customers helped shape reward tiers and redemption options, ensuring relevance.
Align with Sales Strategy: Loyalty incentives were aligned with sales goals (e.g., moving specific products), not just volume.
Ongoing Communication: Regular updates, personalized messages, and digital access to point balances kept contractors engaged year-round.
Conclusion
Creating a loyalty program for contractor customers is not just about offering rewards—it’s about reinforcing trust, improving engagement, and aligning mutual success. For this distributor, “BuildBack Rewards” transformed occasional buyers into loyal partners, while giving the sales team new tools to grow and retain business. It’s a compelling example of how loyalty programs, when built strategically, can become a catalyst for long-term distributor growth.
