How to measure the success of your promotions

How successful are your promotions? What are your promotional objectives? Which promotional levers are most efficient to achieve your objectives?

If you can’t answer these questions, there’s a good chance you are stuck in a price erosion slide, offering deeper and deeper discounts to achieve the same uplifts as the year before.

Instead of throwing money away while eroding brand value, retailers and manufacturers who are winning in retail have clear promotional objectives, know which promotional levers drive positive customer behavior, and have access to timely, actionable insights.

Without access to customer insights, retailers and manufacturers can only see how much volume they have sold when on promotion. Customer insights allow you to understand where this volume came from. Did the promotion attract new or existing customers? Did the promotion increase basket sizes or drive higher frequency of purchasing? Was there a long-term impact after the promotion or did customer behaviour return to pre-promotion?

By analyzing your promotions with customer insights, you can understand which promotional levers drive the desired customer behavior for each brand/category, create efficient promotional plans with clear objectives and measure the ongoing impact of your promotions.

Like all aspects within retail, promotional effectiveness is an ongoing cycle of continuous improvement. To win in retail, you must have actionable insights that allow you to make the right decisions for your brands and categories.

In order to take your promotional effectiveness to the next level and make the right choices, retailers and manufacturers must understand 5 Key Insights:

Key measures – What is driving sales? Loyalty/non-loyalty members, penetration of customers/transactions, purchase frequency, units per transaction or price per unit.

Who buys? – Easily see who buys your brand/competitors/category. Age, gender, price profile & loyalty profile.

How do customers cross shop? – What other products within the category have my product buyers purchased? How loyal are shoppers to SKU/brand/pack format? Is competition for my shoppers & their dollars increasing or decreasing?

What else does my customer buy? – Understand what else is in your customers’ transaction and what the total transaction is worth to the retailer. Where are opportunities for cross promotions or line extensions?

Trial and repeat – Understand success of new product launches, major price/promotional changes and overall Brand health. How many customers trialed my product and what % re-purchased? How many times do customers repurchase my product and how many units to they buy per transaction.


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