J.J. Haines Rolls Out Loyalty Club
Article Number: 1024

Top Dealer - Bill’s Carpet & Flooring in Ephrata, Pa.
By Steven Feldman
Atlantic City, N.J.—J.J. Haines, the second-largest flooring distributor in the nation with 2005 sales eclipsing $300 million, unveiled the latest version of its retailer support program—aptly dubbed the J.J. Haines Loyalty Club—at its annual convention held here last month.

The retailer support philosophy is not foreign to Haines. In fact, the Loyalty Club concept dates back to 1980, when the original Carpet Studio was rolled out. And Carpet Studio was the forerunner of Flooring Plus, the distributor initiative currently shared with Belknap White and Ohio Valley Flooring.

According to Bruce Zwicker, president and CEO, the Loyalty Club begins with Haines’ vision. “We want to be a customer-focused company. It’s all about the notion of retailers needing more help than ever before. And when that strategy came into play, we asked ourselves what a loyalty program should look like. We want to be the best industry partner a retailer can have.”

Previewed in January, the Loyalty Club takes the Flooring Plus program to the next level. According to Scott Roy, vice president of sales for Haines, while Flooring Plus deals more with marketing and advertising, the Loyalty Club is more comprehensive. “We realized outside of this circle were products, programs and promotions.”

This does not mean Haines is abandoning Flooring Plus. Roy noted that Flooring Plus has been viewed separately from the distributor’s product offering and day-to-day services. “Flooring Plus remains important to our program, but it is just a piece of this bigger offering.”

The loyalty program begins by rewarding retailers for purchasing products through Haines. It’s nothing new for the distributor, just more significant. “We had rebates before, but they were much less,” Roy said. “They were tied into what the manufacturers were offering.” But now Haines is contributing to the rebate. “It’s a combination.”

He added the advantages of purchasing product through Haines goes beyond rebates. They are products that move at retail. “We have the best consumer brands in every product category we sell.” Those would include Armstrong, Bruce, ShawMark, American Olean, etc. “And where we have private labels we have the best lines as well.”

But the program doesn’t end with rebates. The Loyalty Club was designed to offer services that will help retailers become more efficient—business support, marketing, promotions and pricing. “The Loyalty Club puts all J.J. Haines products, services and programs under one umbrella,” Roy said.

As an example of business support, Haines offers financial consulting services. Its credit managers will take a look at their retailers’ books (at their request), help them apply for a loan if needed, even make sure they are working with the proper margins.

As the program evolves, Zwicker and Roy see more benefits to members, especially in the realm of technology. These include services like B2B and customized Web sites. “System technology will have a big impact on everyone, particularly on the retail end,” Zwicker said. “This is a relatively unsophisticated industry, so you have to hand them the tools. This will become a bigger part
of the tie between us and our customers.”

Purchase Driven

But at the very core of the program is retailer purchases as Haines seeks to drive volume. “We would like to see between 60% and 70% of each Loyalty Club member’s total purchases be through J.J. Haines,” Zwicker said. “That’s where you really need to be. The more our retailers buy, the better marketing and advertising programs we can offer.”

There are requirements for membership into the club. For example, retailers must carry a minimum of four Armstrong branded lines in their showroom and at least two of the non-Armstrong brands that Haines carries. “You really have to want to be a partner,” Roy said. “We want committed partners to be part of the club.” As well, a retailer must spend a minimum of $50,000 with Haines before the wholesaler will even consider inclusion in the club. “These retailers are the creme de la creme; membership is by invitation only.”

A good number of Loyalty Club members have been part of Flooring Plus. “Right now it’s a transition,” Roy said. “What they are doing is taking a step up. They may need to buy one or two new displays to get into the club.” He believes the company will benefit from retailers shifting some of the business they are doing with other distributors to Haines.

Aside from Flooring Plus members, there are Haines customers coming on board who weren’t in the program at all. Then, as the program establishes itself during the course of this year, J.J. Haines will approach retailers with whom it has not been doing business. “We’ll start pulling those in once the program starts to pick up strength,” Roy said.

Eventually, Zwicker concluded, the goal is to have between 20% and 25% of Haines’ 1,500 active customers as Loyalty Club members. “But this isn’t a pure numbers program. We want people who are really loyal.”
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4/30/2006 11:25:15 AM
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