Although I travel regularly and have done so for years, it took me a while to make sense of all the travel loyalty programs out there and how to capitalize on them (for that, I highly recommend How to Win at Travel by Brian Kelly). My travel reward credit card points are just starting to accrue, but I am excited about the potential perks and benefits.
Similar programs have begun to take off in the B2B world, and I think they will be complete game changers in the home décor industry. That became clear when I spoke with manufacturers who are leaning into these programs, and the retailers who are seeking them out, for our February print issue.
Tiered discounts and partner perks are changing how home décor retailers choose vendors, turning loyalty from a nice-to-have into a bottom-line strategy. One vendor told me that before his company established a loyalty program last year, he lost business to a key competitor who did. “We found ourselves lacking in something customers put a premium on,” he said. “It was almost a qualifier if we were going to do business.”
Loyalty programs in the trade can take many forms. Many have spending tiers that grant a certain percentage off all orders the following calendar year. One vendor offers retail showroom styling assistance and free marketing assets after a particular spending level is reached, while another models its program after Amazon Prime — retailers can purchase an upfront pass that grants them free shipping on all orders over $3,000 for the entire calendar year.
Regardless of structure, loyalty programs benefit manufacturers in three critical ways: They spur growth — anywhere from 5% to 10% or more year-over-year, according to Brandmovers, a tech company that structures loyalty programs. They increase customer retention, which is important considering the high cost of new customer acquisition. And they strengthen relationships. Unlike consumer incentive programs, loyalty in the trade world develops over long-term partnerships that are based on trust.
Retailers said loyalty programs are more valuable to them than one-time free-freight specials or other at-market incentives, and many have shifted their buying to vendors that have loyalty programs. A few said they wished more companies would offer them. Considering the new programs that cropped up over the past year, and the enthusiasm they generated at the winter markets last month, that wish may soon come true.
