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Mike Aylen, writing in Hardware Retailing’s “Inside the Margin” series, recommends that hardware retailers use customer groups and category-specific price plans for contractor and professional customers. His guidance includes reviewing allocations at least twice a year, avoiding blanket discounts and using trial periods for new customers. The source provides recommendations and examples, but no data showing measured financial results.
Hardware Retailing has published an industry viewpoint by Mike Aylen recommending that retailers build customer groups and set category-specific price plans for contractor and professional customers. The guidance argues that tailored discounts can help stores pursue more customer business while avoiding margin losses from broad, across-the-board price cuts; it is advice, not a report of measured results.
Aylen, identified by the publication as an industry expert and NHPA strategic consultant, presents the article as the fourth installment in the “Inside the Margin” series. He says retailers starting from scratch should generally keep customer groups to 10 or fewer, with individual plans added where customer volume warrants them. Possible groups might include plumbers, painters, builders, concrete workers, property maintenance businesses and local councils.
He recommends defining clear allocation criteria, such as a customer’s day-to-day work and monthly sales. A retailer he worked with, Aylen writes, divided plumbers into large, medium and small groups and linked discount rates to monthly sales. He also says retailers can take customer loyalty into account: a customer whose volume places them in a middle tier could receive a stronger offer if they consistently direct all of their business to the store.
Aylen recommends reviewing customer sales information at least twice a year, using reports by customer to reassess group assignments and spot declines that may warrant a conversation. He also advises retailers to estimate a customer’s potential spending, identify products the customer buys elsewhere and explain what additional business could qualify them for. For new customers, he suggests a 60- or 90-day trial group rather than granting the best permanent discount immediately.
How Targeted Discounts Can Protect Margins
The central issue is how retailers balance customer growth with the profit available on individual products. Aylen warns that a single discount across all departments can cut prices where a lower offer would have been enough, or make already low-margin products unprofitable. A plan organized by department, and when needed by class, fineline or individual item, gives retailers a way to set offers closer to the economics of what customers buy.
That approach could matter for hardware stores competing for repeat contractor business, where purchase patterns and margins vary between categories. Aylen’s examples illustrate the risk he describes: he says a 15% global discount could leave little room on hot water units or result in ladder sales at a loss. These are examples from his consulting experience, not independently verified or quantified outcomes, but they show why a discount that appears simple to administer can have different effects across a store’s inventory.
The customer-group process also gives staff a basis for discussing what a customer must do to qualify for better terms. For retailers, the practical payoff Aylen proposes is a more deliberate link between sales opportunity, customer loyalty and discount levels, rather than relying on a uniform price reduction.
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From Customer Tiers to Item-Level Pricing
Aylen’s article focuses on two decisions: which customers belong in each group and what discount each group receives across the store’s categories. He recommends using a retailer’s existing customer base to choose relevant groups and sales records to support assignments. Where volume varies widely within a trade, separate tiers may be more useful than treating every plumber or painter alike.
For the pricing work, Aylen says retailers can use tools such as Margin Master or Epicor Pricing Planner to examine selling prices by department, or build the calculations manually in Excel. He advises checking whether discounts need to vary further by class, fineline or SKU. He cautions against locking a SKU exception at a fixed price and says exceptions should have an expiration date.
One example in the article concerns a retailer’s plumbing plan, set at cost plus 28%. Aylen says he found the plan priced a clamp at 94 cents while a major competitor charged $1.64. The comparison is presented as his account of a retailer’s pricing review; the article does not provide the product details, date or independent verification.
“The main advantage is that you can use it to grow sales.”
— Mike Aylen, industry expert and NHPA strategic consultant, in Hardware Retailing
Results and Pricing Benchmarks Not Provided
The source is an industry viewpoint offering recommendations, not a controlled study or a retailer’s financial results. It does not quantify how much sales, margins or customer retention might change under the proposed plans, or compare outcomes across stores that use different pricing methods.
Some details behind Aylen’s examples are also absent, including the time period and product specifications for the clamp comparison. The article does not set out a universal discount schedule or explain how retailers should account for every cost, local competitor or customer agreement. Each store would need to test the approach against its own pricing data and business conditions.
Retailers Would Need to Test Their Plans
Aylen’s recommended next steps are for retailers to define customer groups and eligibility rules, calculate discount rates by category, load the resulting plans into their pricing system and assign customers accordingly. He advises reviewing customer sales at least twice a year, and using a 60- or 90-day trial for new customers before moving them into a permanent group.
The article does not announce a rollout, deadline or follow-up study. Aylen says the “Inside the Margin” series will continue with another topic, but the supplied source does not specify when the next installment will appear.
Key Questions
What is the article recommending?
Mike Aylen recommends grouping contractor and professional customers by relevant criteria, then setting category-specific discounts rather than using one discount across every department.
How often should retailers review customer groups?
Aylen recommends reviewing customer sales and allocations at least twice a year, using sales-by-customer information to identify changes or declines.
Why does Aylen oppose a global discount?
He says product margins vary. A uniform discount may cut prices more than needed on some items and leave too little margin on others, including low-margin, high-value products.
How should a store handle a new contractor customer?
Aylen suggests starting the customer in a 60- or 90-day trial group and explaining the criteria for a permanent plan, rather than immediately offering the best ongoing discount.
Does the source show that these plans increase profit?
No. The article provides advice and examples but reports no measured sales or profit results from the approach.
Source: hardwareretailing.com
