Building Loyalty among Contractors -- Risks and Rewards
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Transcript of Building Loyalty among Contractors -- Risks and Rewards
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WELCOME TO THE ERIC MOWER + ASSOCIATES
WEBINAR SERIES
EMA GROUP B2B BUILDINGS + CONSTRUCTION
SPECIALTY
NOVEMBER 15, 2016
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Building brand loyalty among contractors −Risks and Rewards
PLACE HOLDER FOR WORK GLOVES AND HEART SHOT
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Brand loyalty is alive, well and worth
the investment.
You can’t build loyalty in a specs-oriented, channel-sourced product
environment.VS
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YOU CAN POSE QUESTIONS
TO OUR PANELISTS THROUGHOUT THE PROGRAM
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Building brand loyalty among contractors −Risks and Rewards
Hosted by John Favalo, Managing Partner, EMA Group B2B
PLACE HOLDER FOR WORK GLOVES AND HEART SHOT
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PLACE HOLDER FOR HARLEY SHOT
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PLACE HOLDER FOR HARLEY SHOT
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Building brand loyalty among contractors −Risks and Rewards
Our panelists:
Towanda LongSenior Marketing Manager
Charlotte Pipe and FoundryManufacturer of Plumbing Pipe
and Fittings
Bill BurnsExecutive Vice President
Benfield ElectricElectrical Distributor
Todd AndersonPresident/Owner
Fortress Enterprises Contractor
Sue SmithProfessor of Marketing Practice
Whitman School of ManagementEducator and Consultant
FORTRESS
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WHAT DO WE MEAN BY LOYALTY?
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Lo∙yal∙ty noun
A strong feeling of support or allegiance .
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Cus∙to∙mer Lo∙yal∙ty very nice to have
The likelihood of previous customers to continue to buy from a specific organization.
−The Business Dictionary
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Brand Lo∙yal∙ty holy grail
The extent of faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands.
−The Business Dictionary
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THE AND OF BRAND L YALTY
UPS
DOWNS
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FIRST OFF, ARE BRANDS REALLY
IMPORTANT TO CONTRATORS?
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FIRST OFF, ARE BRANDS REALLY
IMPORTANT TO CONTRATORS?
VALUES
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FIRST OFF, ARE BRANDS REALLY
IMPORTANT TO CONTRATORS?
VALUESRELIABILITY
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FIRST OFF, ARE BRANDS REALLY
IMPORTANT TO CONTRATORS?
VALUESRELIABILITYPRICE, UNIQUE
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FIRST OFF, ARE BRANDS REALLY
IMPORTANT TO CONTRATORS?
VALUESRELIABILITYPRICE, UNIQUEMIND SHARE
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BRANDS MATTERTO CONTRACTORS
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BRAND IMPORTANCE“How influential is a strong brand name when it comes to purchasing tools?”
Source: EMA Contractor Study
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BRAND IMPORTANCE18%
10%
3% 2%1%
18%
8%7%
1%
4%
0% 0%
13%
9%
2% 2%
0%2%4%6%8%
10%12%14%16%18%20% What is the TOP reason the brand of BUILDING MATERIALS is
important to you?
Price
Convenience
Value
Recommendations/requests
Familiarity/past experiences
Performance/productivity
Source: EMA Contractor Study
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BRAND IMPORTANCE“How influential is a strong brand name when it comes to purchasing building materials?”
Source: EMA Contractor Study
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BRAND IMPORTANCE
The equipment we use is highly regulated in regard to the standards we must meet.
Today’s specialty contractors have a lot of decision-making power because oftentimes specs are not complete or
conclusive about brands.
Source: EMA Contractor Interviews
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WAIT A
IS IT BRAND L YALTYOR
DISTRIBUT R LOYALTY?
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DISTRIBUTOR IMPORTANCEFor what reasons do contractors prefer one source over another?
Source: EMA Contractor Study
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DISTRIBUTOR IMPORTANCE
I prefer the personal relationship…you build trust…they help you out if you make a mistake…you can get a lot of help if you build a good relationship.
Source: EMA Contractor Interviews
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DISTRIBUTOR IMPORTANCE
“It’s critical to me that the product be available at distributor locations all around town or in the areas where I work. It does me no good if what I need is in Georgia, when I’m on site in South Carolina.”
Source: EMA Contractor Interviews
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RESEARCH SHOWS DISTRIBUTOR LOYALTY
CAN SHIFTIN FAVOR OF BRAND LOYALTY
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RESEARCH SHOWS DISTRIBUTOR LOYALTY
CAN SHIFTIN FAVOR OF BRAND LOYALTY
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“L.E.K.’s findings clearly show that building products manufacturers with strong brands have more pricing powerthan originally thought.”
−Robert RourkeVice President
L.E.K. North American Building and Construction Practice
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“Small residential contractors tend to be loyal to distributors. By default, the contractor’s brand loyalty will be to whatever brand is carried by his favorite distributor. On the commercial side, brand loyalty is both short-term and fluid. (Manufacturer) People and policies change very frequently…and the contractors’ loyalties shift with those policies.”
−John SaucierPresident
Temperature Inc.
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YES, CONTRACTORS CAN BE FICKLE
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YES, CONTRACTORS CAN BE FICKLE
Source: EMA Contractor Study
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INNOVATIONCAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped connector leads
Tougher polycarbonatebody
Mechanical shuttersprevent insertion of foreign objects
UL finger-safehousing
Audible “snap” Assures connection
Strap tabs hold face and back together
Self-contained leadscut install time and enable apprenticesto finish job
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INNOVATIONCAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped connector leads
Tougher polycarbonatebody
Mechanical shuttersprevent insertion of foreign objects
UL finger-safehousing
Audible “snap” Assures connection
Strap tabs hold face and back together
Self-contained leadscut install time and enable apprenticesto finish job
SO CAN… BROKEN PROMISES
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INNOVATIONCAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped connector leads
Tougher polycarbonatebody
Mechanical shuttersprevent insertion of foreign objects
UL finger-safehousing
Audible “snap” Assures connection
Strap tabs hold face and back together
Self-contained leadscut install time and enable apprenticesto finish job
SO CAN… BROKEN PROMISESNOT EVOLVING
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REPEAT PURCHASESTRY NEW PRODUCTS
LESS TIME AND INVESTMENT TO CLOSELARGER SHARE OF SPEND
WILLINGNESS TO PAY A PRICE PREMIUMLESS SENSITIVITY TO PRICE INCREASES
ADVOCATEMORE RESISTANT TO COMPETITIVE OFFERING
THE BENEFITS OF BRAND LOYALTY
Source: Kotler and Pfoertsch
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REPEAT PURCHASESTRY NEW PRODUCTS
LESS TIME AND INVESTMENT TO CLOSELARGER SHARE OF SPEND
WILLINGNESS TO PAY A PRICE PREMIUMLESS SENSITIVITY TO PRICE INCREASES
ADVOCATEMORE RESISTANT TO COMPETITIVE OFFERING
THE BENEFITS OF BRAND LOYALTY
Source: Kotler and Pfoertsch
Loyalty leaders grow 4% to 8% over market.
- Bain and Co
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THE KEY QUESTION IS THIS:CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
AND, IF SO, HOW?
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THE KEY QUESTION IS THIS:CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
AND, IF SO, HOW?
2 to 1- Source: L.E.K.
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DERIVING STRATEGIC ADVANTAGE FROM LOYAL CUSTOMER RELATIONSHIPS
REQUIRES
TRUE DIFFERENTIATION
- Bain and Co
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DIFFERENTIATION IN COMMODITY CATEGORIES
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DIFFERENTIATION IN COMMODITY CATEGORIES
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EDUCATION AND TRAINING IMPERATIVE
PROJECT AND CODE IMPLICATIONS
HELP WITH NAILING THE SPEC
THE IMPORTANCE OF SERVICE
Source: EMA Interviews
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THE KEY QUESTION IS THIS:CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
IF SO, HOW?
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PRODUCT AND BRAND FUNCTIONAL CONSIDERATIONS
• Contractors seek products and brands that enable them to save time and minimize the exertion of unnecessary labor. In most instances, contractors are comfortable paying higher prices for elevated and differentiated value.
Work Efficiently(this need is more pronounced for
products being installed)
Work Smartly(this need is more pronounced with
“personal” tools)
• Seek products and brands that shave installation time
• Seek products and brands that deliver consistency throughout installation
• Seek products and brands that require less muscle
• Seek products and brands that multi-task (E.g. drill with light attached)
Source: EMA Interviews
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PRODUCT AND BRAND FUNCTIONAL CONSIDERATIONS
• Contractors seek products and brands that enable them to save time and minimize the exertion of unnecessary labor. In most instances, contractors are comfortable paying higher prices for elevated and differentiated value.
Work Efficiently(this need is more pronounced for
products being installed)
Work Smartly(this need is more pronounced with
“personal” tools)
• Seek products and brands that shave installation time
• Seek products and brands that deliver consistency throughout installation
• Seek products and brands that require less muscle
• Seek products and brands that multi-task (E.g. drill with light attached)
Source: EMA Interviews
CUSTOMER CENTRIC
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PRODUCT AND BRAND FUNCTIONAL CONSIDERATIONS
• Contractors seek products and brands that enable them to save time and minimize the exertion of unnecessary labor. In most instances, contractors are comfortable paying higher prices for elevated and differentiated value.
Work Efficiently(this need is more pronounced for
products being installed)
Work Smartly(this need is more pronounced with
“personal” tools)
• Seek products and brands that shave installation time
• Seek products and brands that deliver consistency throughout installation
• Seek products and brands that require less muscle
• Seek products and brands that multi-task (E.g. drill with light attached)
Source: EMA Interviews
CUSTOMER CENTRICPRODUCT + RELATIONSHIP + SERVICE = LOYALTY
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PRODUCT AND BRAND FUNCTIONAL CONSIDERATIONS
• Contractors seek products and brands that enable them to save time and minimize the exertion of unnecessary labor. In most instances, contractors are comfortable paying higher prices for elevated and differentiated value.
Work Efficiently(this need is more pronounced for
products being installed)
Work Smartly(this need is more pronounced with
“personal” tools)
• Seek products and brands that shave installation time
• Seek products and brands that deliver consistency throughout installation
• Seek products and brands that require less muscle
• Seek products and brands that multi-task (E.g. drill with light attached)
Source: EMA Interviews
CUSTOMER CENTRICPRODUCT + RELATIONSHIP + SERVICE = LOYALTY
STRONG RELATIONSHIPS
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PRODUCT AND BRAND FUNCTIONAL CONSIDERATIONS
• Contractors seek products and brands that enable them to save time and minimize the exertion of unnecessary labor. In most instances, contractors are comfortable paying higher prices for elevated and differentiated value.
Work Efficiently(this need is more pronounced for
products being installed)
Work Smartly(this need is more pronounced with
“personal” tools)
• Seek products and brands that shave installation time
• Seek products and brands that deliver consistency throughout installation
• Seek products and brands that require less muscle
• Seek products and brands that multi-task (E.g. drill with light attached)
Source: EMA Interviews
CUSTOMER CENTRICPRODUCT + RELATIONSHIP + SERVICE = LOYALTY
STRONG RELATIONSHIPSLISTENING TO FEEDBACK
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PLACE HOLDER FOR WORK GLOVES AND HEART SHOT
Contractor loyalty programs
A look at loyalty programs
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Manufacturer/distributor combo
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Distributor to contractor
“With Ferguson PRO Plus™, your company can use Ferguson Online to earn points for every online purchase. Access to the industry's leading wholesale web site makes it easy to earn points for products you buy every day. Your company can also earn Bonus Points on specially featured products that are part of a specific promotion.”
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Big box to contractor
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Co-op/coalition rewards from third party
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Manufacturer endorsement
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Business benefits to contractor
• Consumer Financing
• eNewsletters
• Customized Marketing Support
• Exclusive Tech Support Hotline
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PRINCIPIA CONSULTING RESEARCHSUPPORTS
EFFICACY OF LOYALTY PROGRAMS
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FASTER GROWTH FOR PARTICIPATING FIRMS
PRODUCT KNOWLEDGE AND TRAINING YIELD HIGHEST VALUE
LOW RANKING FOR TRIPS AND CASH
THE BENEFITS OF LOYALTY PROGRAMS
Source: Principia Consulting
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CPG PRO Rewards landing page launched at the 2016 Builder Show
CPG PRO Rewards handout used at the 2016 Builder Show
FOR EMA CLIENT CPG, WE LEVERAGED BEST PRACTICES FOR A
BETTER PROGRAM
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FOR EMA CLIENT CPG, WE LEVERAGED BEST PRACTICES FOR A
BETTER PROGRAM
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INCLUSIVE ENROLLMENTPARTICIPATION VIA MULTI-TIERS
MULTIPLE BENEFITSPRIME THE SALES CHANNEL
LEVERAGE TECHNOLOGY
BUILDING BLOCK OF SUCCESSFUL LOYALTY PROGRAMS
Source: Principia Consulting
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BRAND L YALTY ISALIVE AND WELL
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THERE IS NOSILVER B LLET
POINT ONE
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POINT ONE: THERE IS NO SILVER BULLET
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DEVELOP THE OPTIMUM
BALANCE
POINT TWO
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POINT TWO: DEVELOP THE OPTIMUM BALANCE
Building Brand Loyalty
INNOVATIVE/ DIFFERENTIATED
PRODUCTSBrand must
deliver products that are
consistently better and smarter
DURABLE Brand must deliver
products with longevity, “that
endure over time”
SERVICE + RELATIONSHIPManufacturer, or
its rep, must deliver 1:1
personal service and proactive relationship
PROMISEBrand must
deliver on its promises: e.g.
reliability, consistency, availability,
warranty
Where are your areas of strength or where can you develop them?
Rarely can strength in one element build sustained loyalty.
Products, performance or innovation aren’t the only factors. You can build loyalty in commodity categories.
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WHAT IS REALLY IMPORTANT
POINT THREE
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POINT THREE: REMEMBER WHAT IS REALLY IMPORTANT
Source: Bain and Co
CREATE STRATEGIC AND ECONOMIC VALUE FOR THE CONTRACTOR’S BUSINESS
PROVE YOU CAN BE TRUSTWORTHY
SIMPLIFY DAILY OPERATIONS AND THE CONTRACTOR’S WORK LIFE
BE LIKED IN THE WORKING RELATIONSHIP
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BUILD FRIENDSHIPS
POINT FOUR
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POINT FOUR: BUILD FRIENDSHIPS
The nine key drivers of friendship that activate brands more personally, more powerfully, more pervasively.
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Building Affection among steel buyers for Nucor
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BUILDING AFFECTION
By telling stories that surprise the audience and demonstrate caring and listening, we made a pound of Nucor steel worth more than 16 ounces of ferrous oxide.
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BUILDING AFFECTION
In a commodity industry, perceived to be archaic, dirty, uncreative and environmentally insensitive, Nucor Steel has become one of the most admired brands in the United States.
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Building Relevance among contractors for Lenox
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BUILDING RELEVANCE
You can launch a product in the same way as always. Or, you can make it more relevant to the contractor’s need to save time and the rapid growth of digital technology among the trades.
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BUILDING RELEVANCE
Take advantage of the growing medium.
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BUILDING RELEVANCE
Tell a great story about a great product and enable easy connections online and on the phone.
Demonstrate the advantages to promote switching.
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Building Trust among plumbing contractors and specifiers
for Charlotte Pipe
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Build trust and differentiate by the way you make it…
BUILDING TRUST
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…by the way you deliver it...
BUILDING TRUST
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…and by the audience.
BUILDING TRUST
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©2015, Eric Mower + Associates (EMA). Brand as Friend is a registered trademark of EMA and its methodologies are proprietary information. All ideas, concepts, strategies, recommendations, trademarks and materials presented in this document by EMA are provided to you to help make an informed decision regarding the use of our ongoing services, and will remain the property of EMA unless otherwise negotiated in a formal agreement with our agency. The use of any EMA presentation concepts and materials outside of a contracted relationship with our agency is prohibited, including the use of this material in-house or with other
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