Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #467: Leaders in Customer Loyalty: Brand Story | From Rural Roots to Loyalty Innovation: How Tractor Supply is Driving Deeper Customer Connections

Transcript

#467: Leaders in Customer Loyalty: Brand Story | From Rural Roots to Loyalty Innovation: How Tractor Supply is Driving Deeper Customer Connections · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:02
  Speaker 1: I want to welcome everyone back to our Leaders in Customer Loyalty series, the Brand Stories Edition, where we spotlight strategies, successes and standout voices shaping the future of customer loyalty.
• 0:12
  Speaker 1: We're glad to have you with us every Thursday.
• 0:16
  Speaker 1: In today's episode, we're going to be joined by Joe Leone.
• 0:19
  Speaker 1: He's the Vice President of Marketing at Tractor Supply, known for a life out here with a deeply customer-centric approach to their customers, Very focused on customer experience and driving emotional connections to their loyalty program.
• 0:35
  Speaker 1: Tractor Supply recently earned silver in the Customer Loyalty Transformation category at the 2025 Loyalty Expo, a recognition that reflects their ongoing commitment and evolution to their Neighbors Club loyalty program.
• 0:51
  Speaker 1: Joe's going to join us today to discuss that transformation, the strategic vision and importance of the Neighbors Club, and how Tractor Supply continues to meet its unique customer needs in a rapidly shifting and shaping retail environment.
• 1:05
  Speaker 1: Joe, congratulations on the award.
• 1:07
  Speaker 1: Thank you very much for taking the time to meet us today.
• 1:09
  Speaker 1: How are you Doing?
• 1:11
  Speaker 1: Great Thanks for having me.
• 1:12
  Speaker 1: Absolutely Looking forward to the discussion.
• 1:14
  Speaker 1: First off, for those who may not be familiar with Tractor Supply, can you tell us a little bit about the company, a little bit of a backstory?
• 1:21
  Speaker 1: How, why was the company started?
• 1:23
  Speaker 2: Yeah, so Tractor Supply has been around for the company a little bit of a backstory, you know how.
• 1:27
  Speaker 2: Why was the company started?
• 1:28
  Speaker 2: Yeah, so Tractor Supply has been around for a while now.
• 1:32
  Speaker 2: We celebrated our 85th birthday anniversary a couple years ago.
• 1:34
  Speaker 2: We were founded back in the 30s and it started as a mail order parts catalog.
• 1:38
  Speaker 2: And today fast forward.
• 1:41
  Speaker 2: We're the largest farm and ranch retailer in North America.
• 1:45
  Speaker 2: We have about 2,500 stores.
• 1:47
  Speaker 2: It's 2,200 or 2,300 tractor supply stores and about 200 pet cents by tractor supply stores and counting.
• 1:53
  Speaker 2: We're adding more every year.
• 1:54
  Speaker 2: So clearly there's been a little bit of an evolution there from a parts catalog back in the 30s.
• 2:03
  Speaker 1: Okay, what's led to?
• 2:08
  Speaker 2: the great success that Tractor Supply has.
• 2:10
  Speaker 2: I think lots of factors go into sustaining success as a retailer.
• 2:16
  Speaker 2: The one thing I'd mention here at Tractor is our culture and our mission and values.
• 2:18
  Speaker 2: We really work well together as a team and everyone is kind of aligned around serving our customers.
• 2:24
  Speaker 1: There is a team and everyone is kind of aligned around serving our customers.
• 2:27
  Speaker 1: Ok, let's talk about you a little bit.
• 2:28
  Speaker 1: Can you tell us a bit more about your role at Tractor Supply?
• 2:31
  Speaker 1: You know how did you get to where you are today?
• 2:33
  Speaker 1: Have you been in customer loyalty for a while?
• 2:35
  Speaker 1: You know what led you to this role?
• 2:38
  Speaker 2: Yeah.
• 2:39
  Speaker 2: I was recently given a new opportunity to kind of lead the broader what we call the LEAP team at Tractor L-E-A-P.
• 2:53
  Speaker 2: So that's loyalty, engagement, analytics and personalization, so all related to our customers and all under, like, the marketing umbrella.
• 2:56
  Speaker 1: I've been with.
• 2:57
  Speaker 2: Tractor a number of years now.
• 2:59
  Speaker 2: I've had the chance to work in a handful of different teams in different departments.
• 3:02
  Speaker 2: I've been on both the merchandising and marketing side now, so it's been fun.
• 3:09
  Speaker 1: Okay, when you look at your role a new role in Leap what kind of keeps you up at night?
• 3:15
  Speaker 1: What are the biggest challenges, opportunities that you face with your position?
• 3:19
  Speaker 2: Yeah, I mean, it's retail, right, so everything keeps me up at night.
• 3:22
  Speaker 2: I think the challenge of knowing that every day, somebody somewhere is out there trying to do what you're doing better than you are, so you never sit still, you always have to move forward and constantly be looking for the next thing and kind of peeking around corners that's the fun of retail.
• 3:43
  Speaker 2: It's also the challenge of retail is there's always somebody you're competing with.
• 3:48
  Speaker 1: Okay, at the 2025 Loyalty Expo, you were given an award for your customer loyalty transformation, which was great to hear and see.
• 3:56
  Speaker 1: Can you tell us a little bit more about the transformation of your customer loyalty program, the Neighbors Club, which originally I think was launched in 2015?
• 4:04
  Speaker 2: Yeah, so back then we started Neighbors Club, which originally I think was launched in 2020, 2015?
• 4:08
  Speaker 2: Yeah.
• 4:13
  Speaker 2: So back then we started Neighbors Club as more or less an email list back kind of mid last decade, and over time it's evolved.
• 4:17
  Speaker 2: So it's evolved into full-fledged loyalty program.
• 4:19
  Speaker 2: Today We've added a tiered points-based program back in 21, and we've continued to add and kind of evolve benefits and features over time.
• 4:29
  Speaker 2: And specifically last year we took some pretty big steps in the program so we really wanted to make it more rewarding for our customers.
• 4:37
  Speaker 2: We listened to our customers and the number one thing they told us was it took too long to earn rewards.
• 4:44
  Speaker 2: So we addressed that directly.
• 4:46
  Speaker 2: We introduced a lower reward value and so they saw more benefits more often.
• 4:51
  Speaker 2: At the same time, we lowered our tier thresholds so they don't have to spend as much to get additional benefits in the program, and both of those were really big hits.
• 5:00
  Speaker 2: We saw large increases in engagement and customer satisfaction with the program.
• 5:05
  Speaker 2: And then separately we also kind of ramped up our personalization efforts, worked to be even more relevant and more personalized to our customers.
• 5:14
  Speaker 2: And lastly, we also rolled out our Hometown Heroes program last year, which is our first responder and military program and veterans and we tied it into Neighbors Club to give customers an everyday benefit, put them in the top tier and give them other special benefits and discounts.
• 5:32
  Speaker 2: So pretty busy last year.
• 5:33
  Speaker 2: A great year, fun to see all the work we did kind of come to life and we saw big increases in more or less all the metrics.
• 5:42
  Speaker 2: We track around our customers and their engagement with the program.
• 5:46
  Speaker 1: Okay, excellent.
• 5:48
  Speaker 1: When you look at customer loyalty very important now and we heard at the 2025 Loyalty Expo that many brands are really leaning into customer loyalty and moving away a little bit maybe from acquisition and trying to leverage the very rich data set and kind of emotional connections they may have with their customers.
• 6:03
  Speaker 1: So, when you look at customer loyalty, what does customer loyalty mean to you and to Tractor Supply?
• 6:09
  Speaker 2: Yeah, I think the best definition I've heard on what is customer loyalty is whether a customer is willing to drive past your competitor to shop in your store, and that's really what we're trying to drive.
• 6:25
  Speaker 2: Is we're trying to drive that extra trip?
• 6:27
  Speaker 2: Our stores are in rural communities.
• 6:30
  Speaker 2: People don't always live super close and they might have to drive past a Walmart or a Home Depot or another farm store to find us.
• 6:38
  Speaker 2: And that's really what we're striving for.
• 6:41
  Speaker 1: Okay, and how does the neighbor club, neighbors club program fit into that vision for customer loyalty?
• 6:48
  Speaker 2: Yeah, so I mean, we're building it every day, right?
• 6:50
  Speaker 2: So Neighbors Club is basically like the connective tissue that ties together a lot of things at Tractor.
• 6:57
  Speaker 2: It's kind of the foundational platform for everything that we're doing to encourage and build loyalty over time, and it's the starting point for not only customer data but also benefits offers program.
• 7:15
  Speaker 2: Everything that we do flows through Neighbors Club.
• 7:18
  Speaker 1: Okay, when you look at the Neighbors Club program, efficacy is very important, especially we heard again at the 2020 Heart Bulletin Expo getting those within the C-suite to understand the program, buying the program.
• 7:32
  Speaker 1: Having that organizational alignment is very important.
• 7:35
  Speaker 1: So you know what KPIs and metrics do your team do they use to measure the effectiveness of your customer loyalty strategies.
• 7:45
  Speaker 2: Yeah, there are a lot of KPIs.
• 7:46
  Speaker 2: I think they're similar probably to KPIs you'd hear from any retailer that you'd ask Things like annual spend, customer lifetime value, retention, trip frequency.
• 7:57
  Speaker 2: There's a lot, including things like engagement with different digital properties or click rates on emails, just all kinds of things.
• 8:05
  Speaker 2: I mean I don't know that there's any one that we only focus on.
• 8:11
  Speaker 2: We focus on a lot of different things one that we only focus on.
• 8:17
  Speaker 1: We focus on a lot of different things.
• 8:18
  Speaker 1: Okay, are there KPIs that you maybe don't have?
• 8:19
  Speaker 1: You've heard about others, maybe at a recent conference, that you would like to have as part of your kind of list of metrics that you have.
• 8:28
  Speaker 2: Yeah, I don't.
• 8:29
  Speaker 2: I wish I could like snap my fingers and have every metric we want all in one place just from day one.
• 8:35
  Speaker 2: But you have to kind of work to get there.
• 8:37
  Speaker 2: So you have to build the right tools, you have to invest in different capabilities, and that's what really.
• 8:43
  Speaker 2: What we've been focused on for the last five, six years or so really is investing in the right tools and the right capabilities.
• 8:49
  Speaker 2: So I think today, generally, if there's something we were missing, we already would have figured out how to get that.
• 8:56
  Speaker 2: So I don't feel like we're missing anything massively, but we could always do it better.
• 9:02
  Speaker 1: Okay, big discussion within our community and we meet with our brands once a week understanding customers, how they change, how they may have changed going through and coming out of COVID.
• 9:13
  Speaker 1: But now, with some of the search for value or, you know, kind of looking for value from brands that they seem to be changing a little bit as well, making sure that the experiences online, offline, social are all consistent.
• 9:26
  Speaker 1: You know, how do you see your customers changing at Tractor Supply and how are they maybe changing within the industry holistically, I think that's just retail.
• 9:37
  Speaker 2: Customers are always evolving.
• 9:39
  Speaker 2: I think they're always looking for you to try and make their lives easier and we really Tractor.
• 9:44
  Speaker 2: We view ourselves as an omni-channel retailer, so a big part of our strategy is really letting the customers dictate how they want to interact with us.
• 9:52
  Speaker 2: We're not trying to force them into anything.
• 9:54
  Speaker 2: So the key is to try and build an experience that enables that right.
• 9:58
  Speaker 2: So it includes having strong digital properties, having strong store processes, having stores where they want to shop being available when they need us to be available and, I think, thinking through those integration points when you have any changements or enhancements.
• 10:14
  Speaker 2: So there's planning up front.
• 10:16
  Speaker 2: But if you do it well, then you design in an omni-channel experience, a cross-channel experience, instead of having to kind of think about it after the fact and come back and change things.
• 10:26
  Speaker 1: Okay, when you look at the next big thing for customer loyalty, what do you think the next big thing for customer loyalty, customer experience, is for Tractor Supply.
• 10:37
  Speaker 2: Yeah for us, we have a lot of opportunities.
• 10:39
  Speaker 2: Still, I think we're just starting to scratch the surface on things like partnerships and affiliates and figuring out who we want to partner with for our customers.
• 10:48
  Speaker 2: I don't know that it's the next big thing in all of loyalty.
• 10:51
  Speaker 2: I know a lot of people do that well today and we already have a few ideas, but it's one that we're thinking more about definitely.
• 10:59
  Speaker 1: Okay.
• 11:00
  Speaker 1: Were there any presentations or insights that you gleaned from the 2025 Loyalty Expo that you feel could be a good addition into your customer loyalty processes?
• 11:14
  Speaker 2: addition into your customer loyalty processes.
• 11:15
  Speaker 2: I think I really I just valued being able to connect with others in the industry and hear the stories, hear what they're working on.
• 11:19
  Speaker 2: I don't know that there was any one big thing, but you get a lot of inspiration from others when you attend an expo like Loyalty360, because you're constantly talking about loyalty for multiple days straight and getting to know people in other industries in retail who maybe aren't in your vertical.
• 11:36
  Speaker 2: So it's just, it's good for kind of inspiration and thinking through.
• 11:41
  Speaker 2: Yeah, just the industry in general.
• 11:44
  Speaker 1: OK, you know what are two or three things that you're most proud of.
• 11:48
  Speaker 1: You know the Neighbors Club program.
• 11:52
  Speaker 2: Our growth.
• 11:52
  Speaker 2: So we've grown from this email list to over 40 million members in the past six, seven years.
• 11:59
  Speaker 2: Now Over 80% of our sales are now made to Neighbors Club members.
• 12:04
  Speaker 2: So you know we've had some good, positive momentum for a number of years now.
• 12:09
  Speaker 2: Hometown Heroes it was really gratifying to kind of finally bring that to fruition, be able to offer that benefit to those customers, the first responders, the military that support all of us, and it also really helped tie together a lot of the things Tractor has historically done a lot with military and veterans causes, and having the Hometown Heroes there allows us to tie all that together under one banner and one program.
• 12:40
  Speaker 2: You know we donate money.
• 12:41
  Speaker 2: Our customers now have a direct line to us and can use their benefits with us.
• 12:44
  Speaker 2: So, yeah, just really happy we were able to bring that to life.
• 12:51
  Speaker 1: That's awesome.
• 12:52
  Speaker 1: And last question, a little bit self-serving what can Loyalty360 do to help you and your team regarding your customer loyalty journey?
• 12:58
  Speaker 2: I mean, can you fund us like a whole bunch more customers or I don't know?
• 13:02
  Speaker 2: No, I think it's just continuing to support the industry right, connect loyalty, folks like us across companies, across industries, bringing people together like at the expo.
• 13:13
  Speaker 2: You know, as I talked about we're, we're considering some different partnership opportunities and things like that.
• 13:19
  Speaker 2: You know that's where knowing who else is doing what in loyalty helps us make some decisions on who we might, who we might want to partner with in the future.
• 13:29
  Speaker 2: So yeah, just kind of being there and supporting the industry.
• 13:33
  Speaker 1: Okay, excellent, well, joe, thank you very much for the first part of the interview.
• 13:36
  Speaker 1: Now we have our rapid fire questions, so let's keep them to a short phrase or a couple of words, so I don't get in trouble with Hannah and Nick and the content team.
• 13:44
  Speaker 1: The first question we have for you what is your least favorite word that others use Me?
• 13:51
  Speaker 2: What is your favorite word?
• 13:53
  Speaker 2: What is?
• 13:55
  Speaker 1: your favorite word, us or we.
• 13:56
  Speaker 1: Okay, what excites?
• 14:00
  Speaker 2: you at work, I think, working with a team that all pulls in the same direction.
• 14:03
  Speaker 1: Okay, awesome.
• 14:08
  Speaker 2: And what do you find tiresome at home?
• 14:09
  Speaker 1: or at work, sitting in traffic.
• 14:17
  Speaker 2: Is there a book that you've read, or you read frequently, that you'd like to recommend to your colleagues In retail?
• 14:27
  Speaker 1: there's a book called why we Buy, written by an author named Paco Underhill, who was one of the kind of initial pioneers of customer research in retail.
• 14:32
  Speaker 1: Ok, what?
• 14:36
  Speaker 2: profession may you like to attempt, if you weren't in the one you currently are in?
• 14:38
  Speaker 2: Really can't think of anything.
• 14:40
  Speaker 1: Something in finance, maybe, Okay, what do you enjoy?
• 14:47
  Speaker 2: doing that.
• 14:48
  Speaker 2: You often don't get the time to do Traveling.
• 14:49
  Speaker 2: We do some.
• 14:50
  Speaker 2: I'd like to do more.
• 14:56
  Speaker 1: Okay, who inspired you to be the person that you are today?
• 14:59
  Speaker 1: My family, okay, what do you typically?
• 15:03
  Speaker 2: think about at the end of the day.
• 15:06
  Speaker 1: Tomorrow's work schedule.
• 15:07
  Speaker 1: Okay, and last question how do you want to?
• 15:09
  Speaker 2: be remembered by your friends and family, I think, always willing to help.
• 15:12
  Speaker 2: It would be good if they thought I was a little funny too, but just kind of nice person always willing to help it would be good if they thought I was a little funny too, but just kind of nice person Always willing to help.
• 15:22
  Speaker 1: Okay, awesome.
• 15:22
  Speaker 1: Well, joe, thank you very much for taking the time to speak with us today.
• 15:24
  Speaker 1: It was a pleasure getting to know you a little bit more but also getting kind of an update on Tractor Supply and their customer loyalty efforts.
• 15:28
  Speaker 1: You guys obviously are an award-winning program, so it's great to hear what you guys are, what you're working on, so thank you very much.
• 15:33
  Speaker 1: Yeah, or what?
• 15:33
  Speaker 2: you're working on.
• 15:34
  Speaker 2: So thank you very much.
• 15:34
  Speaker 1: Yeah, thanks for having me Absolutely, and thank you everyone else for taking the time to listen to us today.
• 15:39
  Speaker 1: Make sure you join us back every Thursday for additional episodes in our Leaders in Customer Loyalty series and until then, have a wonderful day.