Case Study:
Wholesale Tire Distributor Changes Dealer Engagement
with Data-Driven Reward Program
CLIENT
A wholesale tire distributor selling their product through distributors.
THE CHALLENGE
How to create a B2B loyalty program that engages customers in a highly competitive marketplace?
KEY RESULTS
Increased member purchase frequency
Increased average transaction size
Increased average total spending
Increased ROI
BACKGROUND
A Midwest wholesale tire distributor was looking for a cost-effective way to grow sales and market share with their customer base. Knowing their dealers bought from multiple distributors, they had historically offered discounts to incentivize the dealers. Now they were looking for something different to make them stand out from the competition while addressing their strategic sales objectives.
Offers
Multiple tire offers:
2X the points when purchasing tractor tires; brand specific light truck tires; inner tubes or from their agricultural tire line.
The offers were promoted in the members monthly email statement, and on the rewards website.
STRATEGY & IMPLEMENTATION
Lift & Shift created a points-based dealer reward program, now in its fifth year, designed for long-term customer retention and strategic sales growth. Dealers earn rewards on every dollar spent, reinforcing the Thank you for your business retention message. The key focus of the program is to target dealers with tactical reward offers tied to the distributor’s strategic sales goals in order to grow more profitable sales and market share. Regular customer contact is achieved using a customized, responsive, easy-to-navigate website that contains their account balance, available bonus offers and a points redemption portal. Customers also receive a monthly reward statement, which includes their point balance along with monthly bonus offers tied to seasonal products, certain product categories, volume purchasing or featured vendor brands - all of which encourage increased purchasing, which helps to drive sales objectives and increase market share.
(Industry Average 12.8%. Source: campaignmonitor.com)
Because the monthly reward statements contain information the participating dealers want to see, the email open rates are exceedingly high, averaging 48% (266% higher than the industry average), ensuring the distributor remains top-of-mind with the dealers. In addition, a wide-array of different and exciting reward options ensures there is something for everyone, no matter how many unique tastes their customers may have, which has enabled our client to engage with and motivate their customers much more effectively.
REWARDING
Having the right rewards matters as customer interests vary. With a Lift & Shift Reward Program, Dealers have a wide selection of reward options to choose from, including:
- Gift and debit cards
- Over 20 different categories of popular merchandise
- Leading airline travel loyalty programs
- Events and experiencial travel
- Account credits
- Branded apparel, products and swag
- Charitable donations to any non-profits you already support
MAKING TRACKS
While some B2B loyalty programs sign-up members automatically, participants in this program self-enroll, ensuring higher levels of engagement from its members. This gives us a control group against which to measure program performance among members.
In the five years since implementing the program, our client has seen consistently positive results across all key sales metrics for participating dealers: increased purchase frequency, increased transaction size and increased total spend.
Reward-earning dealers increased purchase frequency by 3.3% in the last 12 months and by 28.9% over the past 5 years. Comparatively, dealers who did not join the reward program decreased purchase frequency by about 1%. On average, reward-earning dealers made more than 4X the number of purchases than non-reward dealers.
Dealers who joined the program increased their average transaction size by 13.1% over the past 12 months and about 5% over the past 5 years. Reward-earning dealers spent 10.3% more per transaction than non-reward dealers over the past 12 months and 12.7% more over the past 5 years.
MORE SPENDING
Over the past 12 months, reward-earning dealer total spend has increased 16.8% and the results are even better when looking at total spend from 2015 to 2020, with reward participants increasing their average annual spend by 35.4%. Comparatively, non-reward dealers increased their total spending by about one third less (10.8%) than reward-earning dealers in the past 12 months, and actually declined by about 2% over the 5 year program life.
ROI
Overall the company has seen a 14.8% lift in total sales dollars to the reward-earning dealers in the past 12 months and a 77% lift in total sales dollars in the past five years.
ROI - IMPACT OF $ INVESTED
One of the key benefits of this reward program is the ability to measure the impact of every dollar invested, as all rewards are tied to purchasing.
For the past 12 months, each dollar invested in rewards was tied to $87.76 in total sales. This includes rewards for retention (the Thank You for ongoing purchasing) and for sales growth.
In terms of increased sales, each reward dollar invested resulted in $11.32 in increased sales over the past 12 months and $38.19 in increased sales over the past 5 years.