Is Tractor Supply barking up the right tree with its new Neighbor’s Club rewards?

Discussion
Photo: Tractor Supply Co.
Aug 23, 2022

Tractor Supply is making changes to its Neighbor’s Club rewards program, putting greater emphasis on building closer relationships with the pet parents who shop in its stores.

The retailer last week said that customers of its standalone Petsense concept will now be eligible to join its Neighbor’s Club program and earn rewards in those stores and at Tractor Supply locations. The company is renaming its pet business Petsense by Tractor Supply to make clear the shared heritage of the two chains.

“Neighbor’s Club has been a true differentiator for Tractor Supply as we’ve seen strong growth in membership enrollment, increased spending levels and industry-leading retention levels with our high-value customers,” said Hal Lawton, president and CEO of Tractor Supply, in a statement. “Finding new ways to provide additional value through the expansion of Neighbor’s Club to pet parents at Petsense by Tractor Supply is a natural fit given the complementary nature of the brands.”

Tractor Supply’s Neighbor’s Club rewards program has been cited by Mr. Lawton as a key to the retailer’s success in recent years. The program’s 26 million and counting members represent about 60 percent of Tractor Supply’s sales.

Neighbor’s Club was updated last year with a three-tier rewards structure that enables members who spend less than $1,000 annually with Tractor Supply to earn a point for every dollar they spend. Those who spend between $1,000 and less than $2,000 move up to Preferred Neighbor status and earn two points. Customers who spend two grand or more become a Preferred Plus Neighbor and can earn up to five points if they use the retailer’s TSC Personal Credit Card. Preferred Plus members have access to perks like free shipping on online orders, access to one same-day free delivery a quarter and a free quarterly trailer rental.

Petsense customers who become Neighbor’s Club members will be able to take advantage of perks that allow them to get a free pet wash when they buy three and a free pet grooming session after they purchase seven.

Tractor Supply is remodeling its Petsense locations with new external signage and internal décor, described by the company as offering “a friendlier, more modern and welcoming experience.” The Petsense by Tractor Supply store in Murfreesboro, TN, is the first location to sport the new look. The remaining 177 stores in the chain will get a makeover by year’s end.

DISCUSSION QUESTIONS: What do you think will be the result of Tractor Supply’s decision to clearly link its name and rewards with its Petsense business? Do you agree with Tractor Supply’s CEO that the company’s Neighbor’s Rewards program is “a true differentiator” for the retailer?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This move makes so munch sense. Pet owners by nature are frequent visitors to stores and make perfect loyalty customers."
"This is loyalty done right. Good for the customer and good for the retailer. Not all loyalty is as engaging and this one clearly is."
"The idea to link Petsense is a step in the right direction. Ask a TS shopper who their favorite retailer is. They will say Tractor Supply."

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15 Comments on "Is Tractor Supply barking up the right tree with its new Neighbor’s Club rewards?"


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Neil Saunders
BrainTrust

Tractor Supply is a fantastic business which has strong loyalty in the locations where it trades. As such, adding Petsense into the loyalty scheme makes good sense. I am sure the loyalty scheme does drive trade and makes a difference – but so too does the good assortment, reasonable pricing and great customer service. Tractor Supply has a really strong proposition so the loyalty scheme is just the icing on the cake.

Richard Hernandez
BrainTrust
Richard Hernandez
Merchant Director
5 months 9 days ago

It is a really smart move. I believe no other farm and ranch store has a program like this. It will definitely increase the loyalty the customer base already has for them.

Andrew Blatherwick
BrainTrust

This move makes so much sense. Pet owners by nature are frequent visitors to stores and make perfect loyalty customers. Tractor Supply is smart to link the two retailers. Providing greater credibility to Petsense and offering membership of Neighbor’s Club can only increase loyalty and spend in the stores. It is also likely to translate to higher sales and new customers for Tractor Supply as Petsense customers see the benefit of the scheme. Good marketing should result in more success for Tractor Supply.

Shep Hyken
BrainTrust

I like the program. First, the rewards program is tiered in a way that is easy for customers to understand. Second, connecting to the Petsense business emphasizes an important group of customers. With fierce competition from other box stores in the area, it’s important to find ways to draw customers to their stores. Petsense customers is a good group of customers to target with special promotions.

Gary Sankary
BrainTrust

I would guess that there is a strong correlation between their customers and pet owners. They aspire to be a one-stop shop for home and garden, so this makes a ton of sense. I think they will do well with this strategy.

Gene Detroyer
BrainTrust

Fifty years ago, I was driving through my territory and saw a Tractor Supply store. I stopped and went in. It was clearly a retailer that knew its business. Rural and farm. Yes, pick-ups were parked outside.

But they didn’t have plastic bags. Strange, I know. Shortly after, I went to their HQ and sold them Hefty Bags. TS quickly became one of my biggest customers.

The loyalty of their customers is impressive. They are the go-to place for a variety of customer needs that are not being served by traditional retailers.

The idea to link Petsense is a step in the right direction. Ask a TS shopper who their favorite retailer is. They will say Tractor Supply.

Chuck Ehredt
BrainTrust

Tractor Supply has built trust and loyalty with a very large customer base over an extended period of time, so linking Petsense extends the value proposition and enables customers to reach rewards faster. This is a smart move that will pay immediate dividends. For 90 percent of loyalty programs, I could poke holes in their look-alike loyalty program design, but for Tractor Supply, they clearly know their audience and make the program simple and valuable for participants. Of course other brands need to get their culture right before they can earn the respect that Tractor Supply enjoys.

Cathy Hotka
BrainTrust

Tractor Supply is a magical company with talented and loyal teams who are in it for the long run. The changes to Petsense by Tractor Supply will definitely bring benefits.

Christine Russo
BrainTrust

This is loyalty done right. Good for the customer and good for the retailer. Not all loyalty is as engaging and this one clearly is.

Di Di Chan
BrainTrust

This is brilliant. Pet parents are expanding as a category of frequent shoppers. Tractor Supply is an early leader in rewarding and retaining their loyalty.

Doug Garnett
BrainTrust

Like many rewards programs, this one may become popular with shoppers yet fail to move the needle for Tractor Supply.

Ryan Mathews
BrainTrust

Tractor Supply is a very, very, good retailer – full stop. They aren’t impetuous and they stay true to brand and, more importantly, true to their consumers. I think this move is just another example of an evolving, considered strategy. Is it a differentiator? Yes. Does Tractor Supply need this move to survive and prosper? No. It’s more like icing on a great cake.

Dave Wendland
BrainTrust

This is a TREMENDOUS move for Tractor Supply. The pet category is exploding and should be very appealing to their already loyal patrons.

Based on the extensive work that Hamacher Resource Group is doing across the pet industry at large, this approach should be differentiating for Tractor Supply while building market baskets among shoppers and driving traffic to their stores. Based on their commitment to the program’s success, I view it as a key initiative, not merely a pet project.

Brad Halverson
Guest

Great move with such a loyal customer base. Loyal customers easily talk up a loved brand, product and experience because they’ve experienced what that means, how it feels. Emotion is a powerful component around family and friends.

Danny Szanto
Guest
5 months 9 days ago

With this loyalty program, TSC customers will have a greater bond with the brand as it is an extension to their pets, since now they will be part of their relationship and will reinforce their loyalty to the channel. It is an opportunity for TSC to strengthen the pet category and move the purchase of customers from specialist channels and supermarkets to its stores and further strengthen benefits.

wpDiscuz
Braintrust
"This move makes so munch sense. Pet owners by nature are frequent visitors to stores and make perfect loyalty customers."
"This is loyalty done right. Good for the customer and good for the retailer. Not all loyalty is as engaging and this one clearly is."
"The idea to link Petsense is a step in the right direction. Ask a TS shopper who their favorite retailer is. They will say Tractor Supply."

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