December 10, 2025 Smart Incentives Fuel Loyalty for Tariff-Hit Manufacturers

Strategic incentives help manufacturers navigate tariffs, boost loyalty, and maintain sales without cutting into margins.

By Devin Ferreira, 360insights

With tariffs rising on imported lumber, kitchen supplies, HVAC components, and a growing list of homebuilding materials, companies across the home and construction sector face a familiar dilemma. Costs are going up. Margins are tightening. And the decision of whether to pass those costs on to customers or absorb them internally is not getting any easier.

For manufacturers in the HVAC, kitchen, bath, and broader home improvement space, the stakes are especially high. Most products in these sectors rely on global sourcing, and many are sold through complex networks of dealers, installers, and distributors. As the market tightens, both professionals and consumers are becoming more cautious. That means longer sales cycles, more price sensitivity, and a renewed focus on value.

Smart brands are turning to a third option. Instead of raising prices or shrinking profits, they are deploying strategic incentives that help them maintain sales momentum, build trust, and position themselves for long-term growth.

Why Incentives Work in a Tariff-Constrained Market

Incentives have always been part of the sales toolbox, but in a market shaped by supply chain volatility and tariff complexity, they are more than just short-term promotions. Used correctly, they become strategic tools to protect customer relationships, support the channel, and move product in the face of external pressures.

Incentives can offset cost increases without damaging brand value. They provide reasons to buy now instead of delaying. They show partners and customers that you are investing in the relationship even when times are tough. And importantly, they offer flexibility. Unlike permanent price cuts, incentives can be scaled, paused, or restructured as the market shifts.

Incentive Strategies that Work for Home and Trade Brands

The following strategies are particularly effective for homebuilding and trade-focused brands navigating tariff-driven pressure.

1. Consumer Rebates

Rebates are one of the most effective tools for addressing price sensitivity in tariff-affected markets without lowering your base price or compromising your brand’s perceived value. Whether you’re selling HVAC systems, kitchen packages, or cabinetry lines, rebates offer an immediate benefit to the customer while preserving your standard pricing structure and long-term margins.

Consider this example: a home improvement retailer launches a “Tariff Relief Rebate” program, offering homeowners a $200 rebate on qualifying window and door purchases made within 60 days. For price-sensitive buyers, who might otherwise delay their projects in hopes of lower prices, this creates the confidence to move forward now. Similarly, in HVAC and kitchen categories, targeted rebates tied to high-efficiency upgrades or bundled purchases can encourage spending and protect average selling prices, even as input costs rise.

2. SPIFFs for Sales, Distribution, Contractor & Installer Teams

Sales representatives, dealers, and distributors form the foundation of the home supply industry. When economic uncertainty takes hold, these professionals often focus on the quickest or easiest sales—moves that may not always align with your highest-value goals. Strategic SPIFF programs can redirect that energy toward the products and services that matter most to your business.

Offering bonuses for selling tariff-impacted items or higher-margin alternatives can keep attention where it’s needed most. Incentivizing value-added services such as extended warranties or installation packages helps protect profitability while rewarding effort. Publicly recognizing top performers and tracking results in real time keeps the field motivated and aligned with shared objectives.

One example comes from a building materials manufacturer that faced rising steel costs. To maintain momentum, the company launched a 60-day SPIFF program for distributors and installers who continued specifying its higher-end framing products. Participants earned $100 for every qualifying project completed during the promotional window. The initiative not only preserved sales velocity but also reinforced loyalty among partners who appreciated the brand’s proactive support during a challenging period.

3. Bundled Offers That Enhance Perceived Value

Instead of discounting heavily, consider bundling additional services or products to increase perceived value. For example, offering a free installation kit with a faucet or an extended service warranty on a water heater can differentiate your product and increase customer satisfaction. These offers do not reduce your base price, but they give the buyer a compelling reason to choose your brand. And because the value is delivered in the form of service or accessories, you retain control over margin impact.

One example comes from an HVAC manufacturer that wanted to maintain momentum on its mid-tier units amid rising component costs. Rather than lowering prices, the company launched a limited-time “Comfort Bundle” that included a complimentary maintenance plan and a smart thermostat upgrade with every qualifying system purchase. The result was a clear uptick in dealer participation and homeowner satisfaction, driven by added value rather than price reductions. By packaging convenience and peace of mind together, the brand reinforced its premium positioning while protecting profitability.

4. Loyalty Programs for Contractors and Consumers

Loyalty programs are often underutilized in home-related industries but can be powerful tools for maintaining engagement and preventing customer churn during challenging economic cycles. For contractors, points-based programs that reward repeat purchases can secure brand preference and increase share of wallet. For consumers, loyalty tiers or seasonal reward offers can extend engagement well beyond the initial sale.

The most effective programs are built around long-term value rather than one-time discounts. Rewards such as exclusive promotions, access to training and certification resources, or expedited technical support create a sense of partnership rather than a purely transactional relationship.

An example of this would be a strategic contractor loyalty program designed to strengthen retention during a period of rising material costs. Contractors could earn points for every dollar spent on qualifying HVAC systems, fixtures, and cabinetry products, which could be redeemed for tool credits, co-branded marketing support, or attendance at exclusive product training events. This loyalty program could go even further and offer a referral bonus to reward contractors who brought new business partners into the program. The result?  Stronger repeat purchase behavior but also deeper brand alignment across contractor networks, even as competitive pressures increase.

5. Channel Partner Incentives to Protect Sell-Through

Distributors and dealers face real pressure in tariff-heavy markets. Rising costs make inventory riskier, while pricing uncertainty clouds purchasing decisions. To keep sell-through strong, brands need to offer meaningful support to their partner network.

Strategic incentives like volume bonuses, early payment discounts, or early access to limited SKUs can help improve sales velocity and maintain partner commitments. When your partners feel supported, they’re more likely to double down on your products rather than switch to a competitors’.

For example, a building products manufacturer can launch a short-term incentive for distributors who continue to stock tariff-impacted SKUs. By offering a tiered bonus for meeting quarterly targets and providing early access to new products, the company is able to help partners manage cost pressure without sacrificing sales momentum. Even in unpredictable markets, the right incentives can turn hesitation into action—and keep your brand prioritized.

Make Incentives Strategic, Not Reactive

To succeed, your incentive programs need to be rooted in data, transparency, and adaptability.

Start by mapping your product lines according to tariff exposure. Identify which items are most at risk of being affected and structure your incentives to protect those categories without blanket discounting. Use your CRM and sales data to personalize rewards and segment outreach. For example, you might offer a loyalty bonus to contractors who buy frequently from your higher-tariff SKUs or develop bundled offers around lower-exposure alternatives.

Communicate clearly. In times of uncertainty, people want clarity. Let customers and partners know why incentives exist and how they are designed to support them. This is especially true as businesses continue to navigate the current challenges brought on by tariffs. If prices or policies change, your partners and customers will want to know about this up front. This builds trust and positions your brand as a proactive, thoughtful player in the market.

Finally, make your programs flexible. Build in options that allow you to scale rewards, adjust thresholds, or reallocate funds as the trade landscape evolves. This keeps your business agile and helps you avoid overcommitting to fixed discounts that may not be sustainable.

Incentives as a Competitive Advantage

For HVAC, kitchen, bath, and homebuilding brands, the challenges of tariffs and trade policy are not going away. But smart companies can use incentives to maintain control, foster loyalty, and win business while others pull back.

These programs are not just about cushioning the blow. They are about reinforcing relationships, building trust, and setting up a resilient framework for growth. As new tariffs take hold and economic pressures continue, now is the time to ensure your incentive strategy is working strategically.

Because in a market shaped by uncertainty, the brands that support their partners and customers the best are the ones that will build the strongest foundations for the future.

About the Author:
Devin Ferreira has a passion for incentives. At 360insights, Derreira focuses on creating a variety of impactful content that helps educate and enlighten channel leaders across a variety of verticals about the power of incentives management, ecosystem strategy, and partner engagement.

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