Promo Close-Up - A Different Way to Network

One Distributor Scores Big By Expanding A Program

Case StudyOne distributor scores big by expanding a program.

Billy Booe, vice president of business development with Activate! Promotions + Marketing (asi/141964), enjoys turning friends into customers. Near the start of his career, in fact, Booe tapped a former classmate to win a significant program with an air conditioning distribution company. Booe actually went to school with several people at the firm. "When I got into the business, I called up one of those people and they said they wanted to buy some stuff," he says. "This all started from a childhood relationship."

The program started with some pens, screwdrivers, and other giveaways. In the first 10 years of the relationship, the client was a drop-ship customer who might have needed 15,000 hats or 50,000 pens shipped to a distribution center. "In turn, they would ship those products out to the branches as they needed them," he says.

But then, in 2009, Booe formalized the ordering and combined the process with a customer-reward program. It was a good choice – for Booe and his client. "We printed customer membership cards with a bar code," he says. "Every time the guy in the van would get parts, he would scan that card and a program would automatically pick two people per branch per day for a prize."

Through a program called Select Rewards, Booe's customer gave away 6,000 pieces of a product every month. The goal was to focus on customer retention. "They knew exactly who their buyers and clients were, everyone from the independent guy to Brothers Heating," Booe says. The program could create daily engagement by rewarding frequent buyers who show up at the branches. "We had a day-to-day customer engagement program by which we gave away two prizes per store every day," Booe says. "They had 120 stores. That program was worth a good $500,000 in sales."

Booe would bring the merchandise samples to the CMO, who would select the products for the following year. In the summer, Activate! would cut six to 12 orders for 6,000 pieces to be delivered in November and December for the following year. On top of that, Activate! handled the distribution.

According to Harvey Briggs, a marketing consultant who's developed campaigns for Chevrolet, Kimberly Clark, Kraft and Pepsi, Booe's strategy was successful because it delivered value to the intended target. "By providing an easy way for distributors to reward their customers for their loyalty, Activate! was able to help the distributor demonstrate his appreciation for the business," says Briggs.

Since 2005, Booe's client has increased its customer engagement almost 11% and upped its revenues about 13%. Briggs points out that loyalty programs may add an expense to a business in the short run, but will save big time in the future. "You don't have to be constantly identifying and selling new customers," says Briggs. "Also, this kind of service helps build word-of-mouth, which is the most effective way to attract new customers."

Briggs believes that Booe was able to demonstrate that finding unique and relevant ways to say "thank you" goes a long way in keeping a customer happy. "Obviously it doesn't outweigh more important business issues like price, service selection, etc.," says Briggs. "But all other criteria being equal, people will continue to do business with those that show how much they appreciate it."

Booe notes that his biggest hits have been associated with distribution networks. "From my perspective, major league home runs come from associating with companies that have to market to large numbers of people or a pre-built distribution network within the company or enterprise," he says.