The Building & Construction Trades Market Won’t Hand You Growth in 2027. Strategic Incentives Will Help You: Take Share. Grow Loyalty. Drive ROI.
Year-over-year growth is always on the list of goals for business owners. It’s definitely a priority with our clients. In a strong market, simple demand for a product does part of the growth work for you:
- More homes get built
- More owners remodel
- More equipment reaches replacement
- Dealers and contractors have more business to place
Just by holding your share you grow.
Our current economic cycle is not helping to feed that kind of growth, however. The economic softness has lasted long enough now that waiting for a turn of events is not a wise plan.
The Economic Forecast Is Not Looking Better
The latest Census data shows single-family construction is essentially flat, and permits issued are decreasing. Remodeling growth is projected to slow to just 0.5% by the middle of 2027, and that does not account for inflation. With inflation running around 3%, 0.5% nominal growth is really a decline.
Distributors are seeing it too. HARDI’s trailing 12-month sales growth masks the current trend. The HVACR distribution association reported member revenue down 4.8% in May. U.S. flooring manufacturer volume fell 5% in dollars and 6% in square feet in the second quarter of 2026, after declines of 7% and 10% in the first.
Some markets are booming. The U.S. now spends more building private data centers than it spends on every public airport, transit system and marine terminal combined, and that’s before the servers even go in.
The pie may not grow next year, and in some categories it will inevitably contract. If you want your numbers to go up, a competitor’s share will have to go down. You need to secure more business from dealers and contractors. You need to engage the people who recommend, quote and sell your products so they choose you more often than your competitor.
Adjust Your Focus to Drive Bigger ROI
A lot of small gains can (and often do) beat one big win. We see it regularly. Most growth plans focus on the largest accounts. They matter, of course, as a dependable staple and foundation to the bottom line, but they could be at their capacity with no room to grow their account with you.
A successful strategy we employ in our strategic incentive programs is to target the large tier of dealers beneath your top customers. Your time could be better spent engaging and motivating this group of the channel rather than going after a new whale; You don’t need one dealer to move all its business to you. You need a large group to move a little more.
Say you have 600 mid-sized dealers averaging $75,000 in annual purchases. That’s $45 million in revenue. A 10% lift across that group produces $4.5 million. This can happen in a variety of ways and is baked into a well-designed incentive program that rewards for:
- Incremental adjustments in orders
- Adding a new category of purchases
- Switching specific products from a competitor
Many of these accounts can be bigger than they look. Your sales file shows what they buy from you, but maybe not what they spend in the category, or what their potential is to move business to you. The share you do not have yet is invisible in your own reporting. But, it’s available to grab with the right tools.
Target the Point-of-Sale Influencers, Too
Sometimes the opportunity for growth is within what the account spends. Other times it sits with the person who decides what gets recommended or quoted first. Targeting both opportunities is a great way to transfer share from a competitor to you.
A distributor salesperson chooses which line to present. A counter team decides what to put in front of a contractor. A dealer salesperson influences the brand that reaches the homeowner. In many channels, the recommendation matters as much as the invoice.
The relationship map is changing too. Building products distribution continues to consolidate. Independent owners are retiring. New leadership can change vendor priorities, sales goals and compensation plans.
Those changes create openings. When compensation becomes harder to earn, a supplier-funded reward carries more weight. The same is true when new leadership reconsiders which suppliers get attention.
Give the account a reason to buy more, and give the people around it a reason to recommend, quote and sell you more often. Our B2B sales incentives strategically do both.
Why A Simple Price Cut Costs More Than You Think
We see the same response in most planning conversations; If we need to be more competitive, get more aggressive on price.
Before anyone approves that move, run the math.
Say you run a 25% gross margin and you give up five points to win a bid. You now keep twenty cents on the dollar instead of twenty-five. Nothing about your costs changed though. To earn the same gross profit dollars you earned before, you have to sell 25% more.
The shortcut is worth remembering: divide the discount by the margin you have left. Five points off a 20% margin leaves you fifteen, so you need a third more volume. Ten points off a 20% margin leaves you ten, and you have to sell twice as much just to break even on gross profit. That is before any added freight, inventory or service cost.
A blanket discount also applies to the business you already had. More importantly, it teaches the channel how to buy from you. The reduced number becomes the expected number. Customers learn to wait for the next deal.
A Discount and a Reward Lead to Different Results
In the programs we’ve built, incentive funding commonly lands around 1% to 3% of sales revenue. It is not a rule, but it is a useful planning range. The investment can be tied to growth above a baseline, a new category or a first order.
A dealer might pass a price reduction through to win the next job. The discount travels with the product. An earned reward stays with the dealer. It reminds them of an added value of working with you. It makes the same dollars more visible when discretionary spending is tight.
Incentive programs use rewards that build stronger relationships, thus increasing loyalty and longevity of a partnership. A competitor can match a discount before lunch. It cannot, however, instantly recreate progress a dealer, contractor or salesperson has already made toward something they want, nor can it replace trust placed with a distributor who values a partnership.
Here’s an important note: an incentive becomes expected, too, if it never changes. The difference is you can easily adjust an incentive program so it’s not stale without putting a lower unit price on every invoice.
2027 Planning Starts Now
A soft market does not eliminate the opportunity to grow. It changes what growth requires.
If you already run an incentive program, decide whether it’s built to take share in 2027 or just repeat last year’s activity. If you do not have one, planning starts with these questions:
- Where is share available?
- Who can influence it?
- What behavior change needs to be targeted?
- How much incremental gross margin is needed to fund the investment?
Motivation Excellence is building 2027 programs right now for companies that want to increase share from current accounts, win new ones and shape what gets recommended through the channel.
Before you lock in a 2027 budget, spend an hour with us. We’ll review your current strategy, work through your channel data to find where share is available, and show you what is working for other manufacturers and distributors right now. That session is on us. Contact us today.
The Human Element in Channel Sales Can’t Be Automated; Why Channel Incentive Programs Win at POS
Across every distribution channel, the person at the point of recommending a chosen product is becoming more valuable. Most distribution companies are investing in them ineffectively or just plain incorrectly.
In HVAC, 68% of contractors say the counter or inside salesperson is the most influential factor in their purchasing decisions, and that influence is gaining importance year-over-year while equipment brand loyalty is declining.
In the automotive aftermarket, brand doesn’t register as a primary selection factor at all on the ordering platforms where over half of independent shops now buy parts. And customers don’t always request specific brands.
In the dealership service lane, tire brand loyalty drops to just 42% when two or more tires are replaced. That’s not because customers stopped liking the brand. It’s because once they’re in the service lane, the choice comes down to what the advisor recommends. The brand didn’t fail – nobody was there to reinforce the preference at the moment it really mattered.
Different sales channels are experiencing the same challenge. The person (counter rep, service advisor, technician) who makes the recommendation in whichever channel is the one who decides which brand gets purchased. This is the last advantage you have that a platform or AI can’t replicate or automate.
The Problem with Paying for the Sale
The standard playbook is straightforward. Offer the advisor or rep a SPIFF for selling your product. It’s simple, easy to explain, and it works in the short term.
A rep with a direct financial incentive to push product X will push product X, maybe regardless if it’s the right fit for the customer. The dealer sees questionable recommendations. Customer satisfaction dips. Returns go up. The manufacturer kills the program. A common conclusion becomes that “incentives don’t work,” when what really failed was the incentive design.
That worry is real for SPIFFs. It’s also the wrong worry for a different kind of program. Even when the SPIFFed rep is recommending the right product, a sale-only incentive has no stability. The rep sells whatever pays more that week. However, a training-based points incentive doesn’t create uneducated, reward-based bias. It creates product knowledge. The rep makes better recommendations because they know more, not because they’re paid more. Same dollar, completely different behavior.
Meanwhile, the annual turnover rate for a service advisor in the dealership service lane is 40% with a median tenure of just 2.2 years. The replacement arrives with no brand preference, or a different brand preference, and no relationship with the customer. The incentive cycle starts fresh. Once again you can’t solve a knowledge and engagement problem with a transaction-based incentive, but a training-based incentive brings newcomers up to speed quickly.
Stop Rewarding Outcomes Alone
The goal is not to stop rewarding outcomes; But, it is to stop rewarding outcomes only.
The best incentive programs reward the behaviors that lead to the desired outcome:
- training completion
- product certification
- new product learning
- cross-category engagement
- consistent participation over time
The Incentive Research Foundation’s 2026 channel research finds best-in-class programs allocate 40% to 50% of their incentive budget to pre-sale behaviors like training, enablement tool usage, and project registration. They reward the work that makes the sale possible, not just the sale itself.
Not everything that builds brand preference shows up in POS data or claim forms. It starts with human interaction, emotional connections and feelings of being part of a team, like:
- a construction supply store counter rep who takes ten extra minutes to walk a building contractor through a new product line
- a service advisor who sets up a compelling product display at the auto parts store
- a branch manager who runs an informal lunch-and-learn to get people through the commercial office furniture showroom
Discretionary rewards can let field managers recognize those moments in real time. That’s the part of brand building no system can track automatically, and it’s often the part that matters most. It’s also another thing you can’t automate. It requires face to face interaction that rewards an all-hands-on-deck mentality at the POS level.
Why Reward Point Programs Change Economics
Cash is the most expensive way to motivate someone. It gets absorbed into the paycheck and forgotten. With inflation above 3% for most of the past three years, extra cash in hand has felt less valuable. A points-based channel incentive program changes the economics of the program itself.
A great advantage to building a points-based incentive program is its flexibility. Business priorities will change. Maybe you’re ready to launch a new product or a competitor enters the market. With a reward points incentive program you can easily adjust what activities can earn and how much each is worth without redesigning the program or renegotiating a SPIFF schedule with finance and sales. They can evolve with your business needs, by:
- adding a training module
- giving points for attending a webinar
- encouraging a specific product category one month
- running a quarterly accelerator
The infrastructure stays the same, but a program that can change as needed remains relevant and engaging. It helps you mitigate risk and maximize gains through real-time program analysis.
Reward point programs can protect budget too. Points accrue as they’re earned, but until the objective is hit, they’re not accessible to redeem. That breakage is real. It means the program only costs budget when it produces results, and the financial exposure stays predictable in a way that cash SPIFFs paid on the spot for each transaction are not.
It also means you can start with a pilot: one region, one product line, one distributor segment. This allows the incentive program to prove the behavior change; Prove the ROI. That’s a lot of flexibility from the very start. Adjusting scale is as easy as adding participants and different reward earning categories. There’s no need to fully rebuild a program with each evolution.
The free marketing is something special too. A points-based incentive program funds rewards people actually talk about. The service advisor who earns a fishing trip or a new TV tells that story to customers, friends and family. That personal story does more to drive brand advocacy and engagement than you can imagine.
What We Build at Motivation Excellence
Price and convenience are not why people buy. If they were, every cost-based platform and every algorithm would have already won. People buy because someone they trust recommended it. That’s the moment that matters for brand loyalty and it’s what we reward with our channel incentive programs.
We design reward point programs for manufacturers and distributors who need to influence the person interacting with the final customer: counter reps, service advisors, branch managers and sales reps. These are the people who matter to the commercial success of your company.
We just completed a program targeting distributor sales reps for a global office furniture manufacturer. The first year delivered more than 400% ROI. The behavior changed during the earning period, before the reward was ever delivered! The reps didn’t sell more because they got paid more. They sold more because the program gave them a reason to engage with the brand and recommend it with confidence. 98% reported in a post-program survey that the incentive motivated them to bring more business to our client.
That’s what a well-designed channel incentive reward point program does. It doesn’t pay for a transaction. It builds the knowledge, the preference, and the habit that leads to long-term loyalty based in human interaction with the people who mean the most to the success of your business. Let’s connect to see how we can help you build a successful program today!
B2B Incentive Programs Solve for Lost Brand Preference in Automotive Aftermarket
In March 2026, IMR (a leading automotive research firm) surveyed 500 independent repair shops about how they actually order parts. The finding that should concern every aftermarket manufacturer and distributor: on the multi-supplier aggregator platforms where 56% of shops now place orders, brand does not register as a primary purchase driver. It wasn’t low. It was zero. Availability is first at 59%. Price is a distant second at 10%. Brand is absent.
This is not a survey quirk. It is a structural shift in how purchasing decisions get made. Platforms like PartsTech consolidate live inventory, pricing, and delivery options from multiple suppliers into a single search. When a technician can compare those factors side by side, the brand on the box becomes secondary to whether the part is in stock and how fast it arrives. The companies that lose share here usually assume the platform is neutral. It isn’t. It actively de-emphasizes the one thing most brand investment is meant to build: preference.
The implication is straightforward. If brand preference does not exist before someone opens the platform, it will not exist when the order is placed. The platform will not create it. An algorithm will not create it. It has to be created by someone who already believes the product is worth recommending. That is the competitive problem most aftermarket companies are not yet structured to solve. Worse, most are only investing in one side of the influence equation.
Incentivizing Buying Behavior on Two Paths
Manufacturers need the installer and counterperson to believe in the brand. Distributors need the shop to consolidate spend. Different levers…same end user…same platform. The question is whether you’re building preference on both paths or just one? Where there’s push, there’s pull…let’s look at both and what they mean to brand loyalty success.
Push: Building conviction in the people with influence
The Incentive Research Foundation’s 2025 study of automotive and manufacturing companies found that 83% run internal sales incentive reward and recognition programs. SPIFFs funded by manufacturers to distributor reps, sales contests, volume bonuses. Most companies already do some version of this.
The problem is the design. A few dollars per unit for a specific SKU this month. The SPIFF expires, the behavior stops, and the brand fails to develop the stickiness that survives a search where a cheaper alternative is one click away. I’ve watched this cycle repeat across industries. A manufacturer invests in a SPIFF, sees a short-term lift, struggles to prove what actually changed, pulls it back, and watches volume settle right back where it was before. That’s not motivation to continue buying from a brand. That’s a temporary discount wearing a different label.
The same IRF study separates top performers from the rest, and the design differences are significant. Top performers are 25% more likely to use incremental achievement targets instead of thresholds. 90% offer uncapped rewards, versus 63% of the rest. In my view, this signals confidence in the design and in the belief that the program funds itself through performance. In IRF case studies, that approach has driven 32% revenue increases and 30% market share gains.
These companies aren’t spending more carelessly. They’re building brand preference through training, expertise, recognition, and rewards that are memorable enough to matter. That conviction is what makes someone stick to a brand even when the platform shows a cheaper option with the same availability.
Pull: Creating structured loyalty with the people who purchase
Here’s the gap. That same IRF study found only 51% have programs reaching their channel partners. The people inside the company get structured motivation. The people outside, the ones deciding where the money goes, get a price sheet and a periodic rebate.
What looks like a pricing problem at the shop level is often a preference problem one layer up. Every shop keeps two or three active supplier accounts, and the first-call supplier captures most of the volume. Most loyalty programs aimed at shifting that ratio look the same: hit a quarterly threshold, earn a percentage back. NAPA Installer Rewards pays 1% once a shop clears $1,950 per quarter. Advance Auto Parts relaunched its structure in February 2026. When every major distributor offers 1 to 3%, the rebate subsidizes the purchasing pattern that already exists. It doesn’t reshape it.
Early in my career, I was designing a program with a building materials CEO who wanted one account removed from a program. “They only buy sticks from me, and I make nothing on them.” He was right. The program was rewarding volume without defining what kind of volume mattered. We restructured it so earnings were tied to the behaviors that actually drove profitability: cross-category purchasing, preferred product lines, and higher-margin items. That is the difference between a rebate and a program. A rebate pays for what already happened. A structured incentive or loyalty program defines what earns, and that definition is where purchasing economics change.
There’s An Urgent Need to Shift Focus from Price to Brand
The price-driven platform shift in automotive did not happen in a vacuum. It is accelerating because the economics are pushing every participant toward price sensitivity:
- Parts costs are up and shops are not absorbing them. Since the 25% tariff on auto parts kicked in May of 2025, pricing across the aftermarket has climbed steadily. Most shops are passing those increases straight through to the customer. That means every repair ticket is higher and every customer is one bad invoice away from asking “is there a cheaper option?”
- Trading down is real and accelerating. 1 in 4 consumers traded down to a cheaper tire on their last purchase. Nearly 9 in 10 shops have increased private label purchasing in two years. When the customer asks “what’s cheapest?” the shop picks whatever the platform shows first. No one is setting out to erode brand preference. It is simply what happens when discretionary spending tightens.
- The next generation doesn’t have brand preference. Two thirds of newer technicians are ordering through aggregator platforms and over 80% of them say availability is the only thing that matters. Not brand. Not relationship. This new generation is replacing the veteran technicians who relied on personal connections with trusted suppliers.
The companies that will hold and gain share in this market are the ones that build brand preference before the ordering moment. Not through advertising. Not through pricing. Through the people who shape the transaction: the counterperson who recommends with conviction because they have been trained and recognized for their expertise, and the shop owner who consolidates spend because the program makes growth feel worth pursuing. That’s where B2B incentive programs can really create stickiness and long-lasting loyalty.
When push and pull work together, preference compounds.
- The counterperson recommends the brand because they believe in it
- The shop buys more because it is earning toward a goal
- The program sponsor sees the lift and reinvests
And that preference becomes the thing a competitor cannot replicate with a lower price or faster delivery on a blind platform search.
The auto aftermarket companies still running flat rebates and rotating SPIFFs are just renting behavior month to month. The ones building programs on both sides of the equation are creating something much harder for competitors to displace: conviction that a brand is worth choosing even when the platform says it doesn’t have to be.
The Right Incentive Structure Delivers Loyalty & Longevity
A smart and strategic incentive or loyalty solution keeps your brand top of mind before a search query is made on an agnostic parts platform. It creates a reward structure that’s compelling enough for the tech to want to connect with you first. And it provides brand training that influences the end user to trust the tech’s first choice.
At Motivation Excellence, we have more than 40 years of experience building successful data-driven loyalty and incentive programs that focus on changing buying behavior over the long haul. Our clients regularly see:
- loyalty to their brand increase
- year over year sales gains for the life of the program
- stronger relationships with partners invested in mutual success
And, they see all of this with their incremental gains paying for the program, and then some. We’d love guide your business through a successful channel incentive program. Reach out via our Let’s Connect button on our website to set up a free consultation. While you’re on our website, explore all of our solutions to help you Inspire Extraordinary Performance with the people who mean most to your success.
Group Incentive Travel Isn’t a Perk. It’s a Performance System that Drives Long-Term Benefits.
It’s March. For many organizations, group incentive travel season is underway. Qualifiers are confirmed. Destinations are locked. Logistics are in motion.
But somewhere in the building, someone is asking: Is this worth it?
It is a fair question. When budgets tighten, travel is one of the first line items that gets scrutinized. To someone who has not experienced what a well-designed program produces, it can look like a perk, not a well-earned piece of a compensation structure. But companies that consistently protect their travel budgets tend to understand something others miss.
Loyalty is an emotion, not a transaction. This is true in B2B situations just the same as personal ones.
Cash treats performance like a transaction. Travel treats it like a relationship. Short-term bonuses and promotions may spike activity, but travel rewards sustain it. And when designed well, it is the most effective motivational tool available…and one that can pay for itself and then some.
Group incentive travel has survived recessions, budget freezes, supply chain disruptions, and global pandemics. Not because it’s a tradition, but because it produces results. The Incentive Research Foundation’s 2025 Top Performer Study found that 93% of top-performing companies use travel incentives, and organizations using non-cash rewards often report stronger revenue growth than those relying on cash alone.
Most people who have experienced it don’t question whether it works. The more important question is why.
The answer is behavioral economics. Every stage of a well-designed travel program activates psychological drivers that influence how people commit, perform, and stay loyal.
Before the Incentive Travel Reward: Ownership, Anticipation, and Urgency
Every qualification cycle follows a pattern. Activity intensifies as the deadline approaches. Conversations sharpen. Effort increases. That acceleration is not accidental.
Once a participant sees a path to qualifying, the experience stops feeling theoretical. It becomes something they expect to attend. When the dates are on a calendar, or a spouse starts looking up the destination, it has moved from a program to a personal commitment. Once it feels like theirs, participants shift from chasing a reward to protecting it.
There is another force layered on top. Experiences motivate differently than cash. Cash rewards become expected. They blend into compensation and often get used for everyday household expenses like gas and groceries. Because a travel experience sits outside normal pay, it is mentally accounted for differently. It stands out as an aspirational element, and that distinction increases its motivational weight. The anticipation alone sustains effort across weeks and months in a way other rewards rarely do.
The data confirms it: 96% of participants report being motivated by the travel opportunity during qualification. 91% of those who did not qualify still report increased motivation. (IRF Participant Study)
Travel does not simply reward the top tier. It influences behavior across the base. In channel and field sales models, it can translate into more:
- product demos scheduled
- cross-category selling
- training participation
- focus
- consistent production during the qualification window
During the Incentive Travel Experience: Emotion and Relationship Equity
The commercial value of a group travel incentive has less to do with the destination and more to do with what happens there (although a great destination can play a role, especially in channels where multiple travel incentives are being offered). Memory favors emotional high points and how an experience ends. Recognition moments, leadership interaction, and farewell dinners become anchors that shape how the relationship is remembered long after everyone returns home. Add in new friendships forged and the desire to meet the following year again, and you’ve got self-sustaining motivation the moment the travel reward ends!
Forrester, a customer event planning firm, published research that shows emotion is the strongest driver of customer loyalty, more than product quality or ease of doing business. Emotion is 1.5 times more influential on loyalty than any other category. When customers feel valued and appreciated, they stay longer, spend more, and recommend them at significantly higher rates.
When a financial services carrier executive looks at an independent agency owner in the eye at a reception and says, “We know you have choices, and we’re glad you chose us,” that lands differently than a commission statement via an email or bank deposit slip. That human interaction builds long-term equity, which translates into future loyalty.
IRF data shows that 89% of group incentive travel participants feel genuinely appreciated by the sponsoring company. Sponsors consistently cite relationship building as the most valuable outcome of their programs.
In competitive environments where offerings are comparable, emotional equity protects share of wallet. Whether that is a dealer deciding which brand to lead with, or an independent insurance agent deciding where to place a policy, the relationship often determines the decision.
After the Group Travel Incentive: Why Experiences Last
Cash fades, and what you did with the money is forgotten. Experiences compound. Researchers have spent nearly twenty years studying what makes people happy. Every time, the answer is the same: Experiences outperform material rewards because they become part of who we are. They are relived, retold, and shared with family, friends and the guy sitting next to you at the airport lounge. That’s marketing that you can’t put a price tag on!
We also form stronger bonds with people who share the same experience. That’s why a group travel experience builds loyalty that no individual bonus can match. When every competitor is facing the same pressures and market shifts, the product stops being the differentiator. The relationship becomes the biggest factor for loyalty.
A valued partner will survive a price increase, stay through a transition, and give you the first call instead of the last one. In sectors where there aren’t tangible products, like insurance, wealth management and financial services, emotional equity can mean placing more business with a preferred partner rather than shopping around. In contractor channels, where there are tangible products, it can mean defaulting to your brand instead of evaluating a competitor.
A check is absorbed into operating expenses. An experience becomes a story. 73% of participants report increased loyalty following incentive travel (IRF Participant Study). Well-designed programs see strong repeat qualifications because participants begin to see themselves as someone who qualifies as an elite performer. Once that identity shifts, behavior tends to follow.
The Motivation Excellence Design Difference
Motivation Excellence knows how to design incentive travel programs that pay for themselves. You read that correctly. When we work with clients, we look at how their goals, obstacles, and audience can create an equation where incremental growth more than pays the cost for each qualifier’s spot.
Dollar for dollar, no other incentive tool comes close to the effectiveness of group travel programs. The magic in travel incentives is what drives their success doesn’t stop when the plane lands. The motivation, emotion, and relationships keep working long after everyone is home.
At Motivation Excellence, inspiring extraordinary performance means harnessing these behavioral dynamics using data, qualification rules, engagement strategies, leadership presence, and post-travel storytelling to transform every program from a discretionary expense into a strategic growth engine.
Let’s connect to schedule a free consultation!
