What is a Contractor Incentive Program?

Manufacturers and dealers/distributors want independent contractors to use their products in client projects. Independent contractors can include general and trade contractors, builders, and remodelers. It's the Contractor that recommends the best products to use, whether they are building a house, renovating a bathroom, or installing a swimming pool. Getting these contractors to choose a particular product or product line can take time because there are often many competing brands offering similar products. 

A contractor incentive program is a great way for manufacturers or distributors to develop strong relationships with independent contractors that encourage long-term engagement and loyalty. In this blog, we'll look at what a contractor incentive program is, including industries where it works best. We'll also offer guidance to get started and key considerations.

What is a Contractor Incentive Program

How to Get Started

Getting started with a contractor incentive program is slightly different depending on whether a manufacturer or a distributor initiates it. 

If it’s a manufacturer-run program, the manufacturer works with dealers and distributors to create the ideal contractor profile and build the list of contractors. If it’s dealer-initiated, the dealer would first work to select the manufacturer(s) they want to include in the program and define what the manufacturer's involvement is. At the same time, the dealer can start building the contractor list.

Creating a tiered program works well for a contractor incentive program. Independent contractors spend differently based on the amount of work they have and the type of work they do. A tiered program, based on the amount of spending, is one approach with greater perks and rewards offered at higher tiers. The rewards should be something contractors want but must also align with the program's goals (e.g., sell more products, create more product-line experts, etc.).

An Independent contractor incentive program needs to be easy to understand and work with, so it’s essential to provide clear communications on how the program works, what the rewards are at each tier, how to redeem rewards, and what’s required to move to higher tiers. A loyalty portal where contractors can see their program status, including the status of any rebates, and get access to training and product information is critical to keeping contractors engaged. 

Ensuring that incentive payments for independent contractors are fast is also important. Here, a digital rebate solution can ease the work required by contractors to submit receipts or invoices, have them processed, and offer the Contractor multiple ways to receive their rebate.

Industries Where Contractor Incentives Work Best

Contractor loyalty programs can be effective in industries where independent contractors play a significant role. The success of these programs often depends on the nature of the work, the frequency of engagement, and the potential for long-term relationships. 

Construction and Home Improvement

Independent contractors, such as roofers, carpenters, plumbers, and electricians, are prevalent in the construction industry. They select the products to use in their work, so incentive programs that reward them for using certain products work well.

Outdoor Living Contractors

Contractors involved in improving the exterior living of homeowners are also a great example. Swimming pool installers, decking, property maintenance, and landscaping contractors also use a number of products in their work and would benefit from an incentive program. 

3 Examples of Contractor Loyalty Programs

Let's look at a few examples of contractor incentive programs working today.

IKO Creates a Loyalty Program for Contractors

IKO wanted to improve contractor and distributor satisfaction, particularly around invoicing processing and reporting. To speed up the process and increase accuracy, they implemented Snipp's C.A.R.E hub that helped process invoices uploaded by Contractors and bulk sales files uploaded by Distributors. In addition, Contractors and Distributors were given multiple options for how they received their rebates.

AZEK Company Leverages Contractor Loyalty Program for Data Insights

A lot of good insights can be gleaned from a Contractor Loyalty Program. The AZEK Company wanted more product and dealer-level sales data to help them update their CRM and expand acquisition. To do this, they moved their contractor loyalty program to Snipp, where they integrated invoicing processing with their CRM/Contractor Portal. Now, Contractors can easily upload invoices to earn points and get a number of different rewards, and AZEK gets the data they need for better decision-making. 

Hayward Rewards Installers

Hayward, a manufacturer of industry-leading equipment, filters, and pumps for pools and outdoor living, created a digital rebate program to encourage installers to use their products and get rewards. Installers submit before and after photos showing Hayward’s products installed, and valid submissions get to select a $50 digital gift card from a range of companies. 

Key Considerations for Your Contractor Incentive Program

Like any incentive program, there are many things to think about. Let's look at some key considerations to keep in mind and plan for as you design your program.

Know Your Audience

The first thing you must do is define the audience you want to reach with your incentive program. Not all contractors are alike. Some are big companies, others are independent, locally operated companies. If you are a manufacturer, you must also consider your dealers and distributors and how they are involved in your program. If you are a distributor or a dealer setting up a contractor incentive program, think about how to involve manufacturers to take on some of the costs of running the program.

Don’t Ignore the Independent Contractors

As you define your audience for your loyalty program, don't ignore small, independent contractors. At first, it may seem like they don't bring much value to your company, but small contractors tend to have loyal customers who continually return for more work or are more willing to refer friends and family to the contractor. Also, small contractors have the potential to grow into large companies, so creating that relationship from the beginning can ensure you are top of mind as they grow (and that means growing your revenues as well!).

Offer a Combination of Rewards 

You can offer many types of rewards in a Contractor Incentive Program. If you've defined your target audience well, you should know the rewards your Contractors want. Rewards can be:

• Educational - Training and certification courses
• Monetary - Rebates and discounts
• Merchandise - Company branded merchandise, free products
• Sales and Marketing Support - Co-marketing/branding opportunities, sales support

You'll want to build an incentive structure that includes a combination of these rewards, depending on what your Contractors are looking to get. 

Create a Tiered Program

Along with a combination of rewards, consider creating a tiered loyalty program. For example, you could create tiers based on the number of contractor sales and provide incentives and rewards at each tier that support the Contractor's effort. 

Another way to tier your contract loyalty program is by the Contractor's size. In this case, you could have a level specifically for independent contractors and tailor the incentives to this group.  

Don’t Forget Mobile

Many independent contractors are constantly on the go and don't have access to desktop computers. Be sure to create a mobile-optimized experience that allows them to participate in the program no matter where they are from their mobile device. This includes uploading invoices and receipts, checking rebate status, and even viewing training modules or product information. 

Focus on Relationship Building

A Contractor Incentive Program is about building stronger relationships with contractors, so they think of your products first when starting a new project. Ensure the communications and rewards are in line with growing the relationship. Consider marketing programs that publicly recognize your best contractors and training programs that help contractors become experts in your product line. Contractors want to be rewarded for their loyalty. The key is to offer the right combination of rewards that work for them and you. 

Track, Measure, and Adapt

Utilize rebate management software and implement a performance measurement process that continually tracks and measures how your contractor incentive program is working. Also, regularly ask contractors for feedback to ensure they get the rewards that keep them returning. Developing an incentive program that builds long-lasting relationships that benefit everyone means continually reviewing and adapting it.  

Final Thoughts

Whether run by a manufacturer, dealer, or distributor, a well-designed independent contractor incentive program can foster strong relationships with contractors, encouraging long-term engagement and loyalty. The key is creating a B2B partner program that offers rewards and perks that incentivize independent contractors to choose and remain loyal, including financial and non-monetary rewards. The program must also be easy to understand and use, and rewards should be fast to redeem. And remember to implement a loyalty program solution to help you set up and run the program, giving you the insights you need to continually adapt and deliver the best contractor incentive program possible.

To brainstorm with a loyalty expert on how to foster loyalty and incentivize contractors, contact us here!