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In a Hardware Retailing industry viewpoint, NHPA strategic consultant Mike Aylen recommends that hardware retailers build customer groups and set discounts by category rather than applying one discount across departments. His guidance includes reviewing groups at least twice a year, using trial periods for new customers and setting expiration dates for SKU-level exceptions. The article offers recommendations, not evidence of measured results from a specific retailer program.
Mike Aylen, an industry expert and National Hardware Show Association (NHPA) strategic consultant, has advised hardware retailers to use customer groups and category-specific price plans to pursue contractor sales while protecting margins. In the fourth article of Hardware Retailing’s “Inside the Margin” series, Aylen recommends setting discounts by department and reviewing customer allocations regularly, rather than offering a single discount across a customer’s purchases.
Aylen recommends starting with a manageable number of customer groups—no more than 10 for retailers building a plan from scratch—while keeping separately negotiated plans for certain high-volume customers as needed. Groups could reflect trades such as plumbers, painters, builders, concrete workers or property maintenance businesses. Retailers should use their own customer base and define clear criteria for assigning customers, including the type of work they do and, where appropriate, their sales volume.
The article describes a retailer that used large, medium and small plumber groups, with discount rates tied to monthly sales. Aylen says retailers can also recognize loyalty when a customer’s sales level alone would place them in a lower group. He recommends reviewing sales by customer at least twice a year, looking for declining purchases and speaking with customers to understand the reasons.
For new customers, Aylen suggests a 60- or 90-day trial group rather than immediately granting the best discount. The retailer can explain the criteria for permanent placement and assess whether the customer meets them during the trial. Once groups are set, Aylen advises calculating discounts separately for each department and, where needed, for individual classes, fine lines or stock-keeping units. He says the work can be done with pricing software or manually in Excel. SKU-level exceptions, he adds, should have an expiration date and should not be locked permanently at a fixed price.
Department-Level Discounts Protect Margins
The advice addresses a practical tension for hardware retailers: contractor customers may bring repeat business, but broad discounts can reduce returns on products with different margin profiles. A single percentage off retail does not account for those differences, Aylen argues, and can cut prices unnecessarily on some items or leave a retailer uncompetitive on others.
Aylen illustrates the risk with examples from his consulting work. He says a 15% global discount could leave little margin on hot-water units bought by plumbers or result in ladder sales below cost for painters. In another case, he says a retailer’s cost-plus-28% plumbing plan priced a clamp at 94 cents while a major competitor sold it for $1.64. These examples are attributed to Aylen; the article does not provide independent verification or broader performance data.
For readers who manage pricing, the central implication is that discounts need to reflect both customer value and product economics. The article presents category plans as a way to target offers and identify opportunities to win more of a contractor’s regular spending, not as proof that a particular plan will increase sales or margins.
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Inside the Margin Series Advice
The piece is the fourth installment in Hardware Retailing’s “Inside the Margin” series. Aylen frames the article as guidance on growing sales and protecting margin among contractor and professional customers through better category price plans.
Its recommendations are based on Aylen’s professional experience, including examples from retailers he says he has worked with. The supplied article does not identify the retailers or give dates, sample sizes or audited results. It is therefore best read as industry advice and illustrative cases, rather than a reported comparison of pricing strategies across the hardware sector.
“If you are starting this from scratch, I recommend limiting your customer groups to no more than 10.”
— Mike Aylen, industry expert and NHPA strategic consultant
No Measured Results Provided
The article does not report quantified sales or margin outcomes from the pricing methods it recommends. It also does not identify the retailers behind its examples, explain how their results were measured or provide enough detail to compare their prices with competitors across markets.
It remains unclear how retailers should set specific discount rates, beyond evaluating departments and customer criteria, or how the suggested group limits and review frequency would apply to businesses with different sizes and customer mixes. Aylen presents the approaches as professional recommendations; their effects will depend on each retailer’s costs, local competition, customer behavior and pricing execution.
Retailers Would Build and Review Plans
Aylen’s proposed next steps are for retailers to define customer-group criteria, analyze purchasing by customer and department, calculate discount rates, then load the plans into pricing systems or spreadsheets. They would assign customers to the groups and review sales at least twice a year, adjusting allocations when the data or customer relationship changes.
New customers could be assessed through a 60- or 90-day trial before receiving a permanent group assignment. The source does not announce a follow-up policy, industry-wide rollout or scheduled outcome report; it says Aylen plans to address another topic in a later installment of the series.
Key Questions
What is a category price plan?
It is a pricing approach that assigns customer groups discounts by product department or category, with more detailed rates for classes, fine lines or individual items when needed.
How many customer groups does Aylen recommend?
For a retailer starting from scratch, Aylen recommends no more than 10 groups, with separate plans for certain high-volume customers when necessary.
How often should customer groups be reviewed?
Aylen recommends reviewing customer sales and group allocations at least twice a year, using sales-by-customer reports to spot changes such as declining purchases.
Why does Aylen oppose one discount across every department?
He says product margins differ, so a global discount can cut prices too far on lower-margin items or fail to price other products competitively. His examples are based on consulting experience and are not accompanied by audited results.
How should retailers handle new customers and item-level exceptions?
Aylen suggests placing new customers in a 60- or 90-day trial group before assigning a permanent plan. For SKU-level exceptions, he recommends an expiration date rather than a permanently locked price.
Source: hardwareretailing.com
