Builders' merchants are missing out on a significant profit boost if they don't use loyalty schemes to target customers, according to Ikano Insight's senior consultant.

Barry Smith, who specialises in developing and managing loyalty and customer relationship schemes for household brands, believes that trade counters have a greater opportunity to make stronger returns on their investment than many other types of retailer.

"The nature of working in trade is that buyers are always going to need the goods, but they have plenty of choice of where to go. It’s about giving them a reason to want to buy it from you,” Mr Smith said.

“Trade counters work well with hard rewards, such as reductions for achieving threshold spends, in the form of cash back or a percentage, to encourage a higher frequency and consistency of customer spend.

“Softer benefits can still work though, as perks such as onsite delivery will be particularly attractive to busy contractors. There is a careful balance to be had between the two in order to retain consistent business and optimise customer engagement.”