An exploration of loyalty to brands among contractors as seen through the lenses of quantitative research, qualitative interviews and the personal perspectives of a brand marketer, distributor, contractor and professor of marketing.

1. WELCOME TO THE
ERIC MOWER + ASSOCIATES
WEBINAR SERIES
EMA GROUP B2B
BUILDINGS + CONSTRUCTION
SPECIALTY
NOVEMBER 15, 2016

2. Building brand loyalty among contractors −
Risks and Rewards
PLACE HOLDER FOR WORK GLOVES AND HEART SHOT

3. Brand loyalty is
alive, well and worth
the investment.
You can’t build
loyalty in a specs-
oriented, channel-
sourced product
environment.VS

4. YOU CAN
POSE QUESTIONS
TO OUR PANELISTS
THROUGHOUT THE PROGRAM

5. 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

6. PLACE HOLDER FOR HARLEY SHOT

7. PLACE HOLDER FOR HARLEY SHOT

8. Building brand loyalty among contractors −
Risks and Rewards
Our panelists:
Towanda Long
Senior Marketing Manager
Charlotte Pipe and Foundry
Manufacturer of Plumbing Pipe
and Fittings
Bill Burns
Executive Vice President
Benfield Electric
Electrical Distributor
Todd Anderson
President/Owner
Fortress Enterprises
Contractor
Sue Smith
Professor of Marketing Practice
Whitman School of Management
Educator and Consultant
FORTRESS

9. WHAT DO WE MEAN BY
LOYALTY?

10. Lo∙yal∙ty noun
A strong feeling of support or allegiance .

11. 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

12. 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

13. THE AND OF BRAND L YALTY
UPS
DOWNS

14. FIRST OFF, ARE BRANDS REALLY
IMPORTANT
TO CONTRATORS?

15. FIRST OFF, ARE BRANDS REALLY
IMPORTANT
TO CONTRATORS?
VALUES

16. FIRST OFF, ARE BRANDS REALLY
IMPORTANT
TO CONTRATORS?
VALUES
RELIABILITY

17. FIRST OFF, ARE BRANDS REALLY
IMPORTANT
TO CONTRATORS?
VALUES
RELIABILITY
PRICE, UNIQUE

18. FIRST OFF, ARE BRANDS REALLY
IMPORTANT
TO CONTRATORS?
VALUES
RELIABILITY
PRICE, UNIQUE
MIND SHARE

19. BRANDS MATTER
TO CONTRACTORS

20. BRAND IMPORTANCE
“How influential is a strong brand name when it comes to purchasing tools?”
Source: EMA Contractor Study

21. BRAND IMPORTANCE
18%
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

22. BRAND IMPORTANCE
“How influential is a strong brand name when it comes to purchasing building materials?”
Source: EMA Contractor Study

23. 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

24. WAIT A
IS IT BRAND L YALTYOR
DISTRIBUT R LOYALTY?

25. DISTRIBUTOR IMPORTANCE
For what reasons do contractors prefer one source over another?
Source: EMA Contractor Study

26. 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

27. 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

28. RESEARCH SHOWS
DISTRIBUTOR LOYALTY
CAN SHIFT
IN FAVOR OF
BRAND LOYALTY

29. RESEARCH SHOWS
DISTRIBUTOR LOYALTY
CAN SHIFT
IN FAVOR OF
BRAND LOYALTY

30. “L.E.K.’s findings clearly show that building products
manufacturers with strong brands have more pricing power
than originally thought.”
−Robert Rourke
Vice President
L.E.K. North American Building and Construction Practice

31. “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 Saucier
President
Temperature Inc.

32. YES, CONTRACTORS CAN BE FICKLE

33. YES, CONTRACTORS CAN BE FICKLE
Source: EMA Contractor Study

34. INNOVATION
CAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped
connector leads
Tougher
polycarbonate
body
Mechanical
shutters
prevent
insertion
of foreign
objects
UL finger-safe
housing
Audible “snap”
Assures connection
Strap tabs hold
face and back
together
Self-contained leads
cut install time and
enable apprentices
to finish job

35. INNOVATION
CAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped
connector leads
Tougher
polycarbonate
body
Mechanical
shutters
prevent
insertion
of foreign
objects
UL finger-safe
housing
Audible “snap”
Assures connection
Strap tabs hold
face and back
together
Self-contained leads
cut install time and
enable apprentices
to finish job
SO CAN…
BROKEN PROMISES

36. INNOVATION
CAN DRIVE
BRAND SHIFT
PLUGTAIL®
No exposed terminals
Pre-stripped
connector leads
Tougher
polycarbonate
body
Mechanical
shutters
prevent
insertion
of foreign
objects
UL finger-safe
housing
Audible “snap”
Assures connection
Strap tabs hold
face and back
together
Self-contained leads
cut install time and
enable apprentices
to finish job
SO CAN…
BROKEN PROMISES
NOT EVOLVING

37. REPEAT PURCHASES
TRY NEW PRODUCTS
LESS TIME AND INVESTMENT TO CLOSE
LARGER SHARE OF SPEND
WILLINGNESS TO PAY A PRICE PREMIUM
LESS SENSITIVITY TO PRICE INCREASES
ADVOCATE
MORE RESISTANT TO COMPETITIVE OFFERING
THE BENEFITS OF BRAND LOYALTY
Source: Kotler and Pfoertsch

38. REPEAT PURCHASES
TRY NEW PRODUCTS
LESS TIME AND INVESTMENT TO CLOSE
LARGER SHARE OF SPEND
WILLINGNESS TO PAY A PRICE PREMIUM
LESS SENSITIVITY TO PRICE INCREASES
ADVOCATE
MORE RESISTANT TO COMPETITIVE OFFERING
THE BENEFITS OF BRAND LOYALTY
Source: Kotler and Pfoertsch
Loyalty leaders grow
4% to 8% over market.
- Bain and Co

39. THE KEY QUESTION IS THIS:
CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
AND, IF SO, HOW?

40. THE KEY QUESTION IS THIS:
CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
AND, IF SO, HOW?
2 to 1- Source: L.E.K.

41. DERIVING STRATEGIC ADVANTAGE
FROM LOYAL CUSTOMER RELATIONSHIPS
REQUIRES
TRUE
DIFFERENTIATION- Bain and Co

42. DIFFERENTIATION IN COMMODITY CATEGORIES

43. DIFFERENTIATION IN COMMODITY CATEGORIES

44. EDUCATION AND TRAINING
IMPERATIVE
PROJECT AND CODE
IMPLICATIONS
HELP WITH
NAILING THE SPEC
THE IMPORTANCE OF SERVICE
Source: EMA Interviews

45. THE KEY QUESTION IS THIS:
CAN BRAND LOYALTY
AMONG CONTRACTORS BE BUILT?
IF SO, HOW?

46. 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

47. 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

48. 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
PRODUCT + RELATIONSHIP + SERVICE = LOYALTY

49. 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
PRODUCT + RELATIONSHIP + SERVICE = LOYALTY
STRONG RELATIONSHIPS

50. 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
PRODUCT + RELATIONSHIP + SERVICE = LOYALTY
STRONG RELATIONSHIPS
LISTENING TO FEEDBACK

51. PLACE HOLDER FOR WORK GLOVES AND HEART SHOT
Contractor loyalty programs
A look at loyalty programs

52. Manufacturer/distributor combo

53. 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.”

54. Big box to contractor

55. Co-op/coalition rewards from third party

56. Manufacturer endorsement

57. Business benefits to contractor
• Consumer Financing
• eNewsletters
• Customized Marketing Support
• Exclusive Tech Support Hotline

58. PRINCIPIA CONSULTING RESEARCH
SUPPORTS
EFFICACY OF
LOYALTY PROGRAMS

59. 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

60. 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

61. FOR EMA CLIENT CPG,
WE LEVERAGED BEST PRACTICES FOR A
BETTER PROGRAM

62. INCLUSIVE ENROLLMENT
PARTICIPATION VIA MULTI-TIERS
MULTIPLE BENEFITS
PRIME THE SALES CHANNEL
LEVERAGE TECHNOLOGY
BUILDING BLOCK OF SUCCESSFUL LOYALTY PROGRAMS
Source: Principia Consulting

63. BRAND L YALTY IS
ALIVE AND WELL

64. THERE IS NO
SILVER B LLET
POINT ONE

65. POINT ONE: THERE IS NO SILVER BULLET

66. DEVELOP
THE OPTIMUM
BALANCE
POINT TWO

67. POINT TWO: DEVELOP THE OPTIMUM BALANCE
Building
Brand
Loyalty
INNOVATIVE/
DIFFERENTIATED
PRODUCTS
Brand must
deliver products
that are
consistently better
and smarter
DURABLE
Brand must deliver
products with
longevity, “that
endure over time”
SERVICE +
RELATIONSHIP
Manufacturer, or
its rep, must
deliver 1:1
personal service
and proactive
relationship
PROMISE
Brand 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.

68. WHAT IS
REALLY IMPORTANT
POINT THREE

69. 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

70. BUILD
FRIENDSHIPS
POINT FOUR

71. POINT FOUR: BUILD FRIENDSHIPS
The nine key drivers of friendship that activate brands more
personally, more powerfully, more pervasively.

72. Building Affection
among steel buyers for Nucor

73. 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.

74. 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.

75. Building Relevance
among contractors for Lenox

76. 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.

77. BUILDING RELEVANCE
Take advantage of the growing medium.

78. 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.

79. Building Trust
among plumbing contractors and specifiers
for Charlotte Pipe

80. Build trust and differentiate by the way
you make it…
BUILDING TRUST

81. …by the way you deliver it...
BUILDING TRUST

82. …and by the audience.
BUILDING TRUST

83. BUILDING TRUST

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