Promotion Effectiveness Analytics Solution
Plan promotions strategically with an always-on promotions effectiveness solution
Promotions typically constitute a significant percentage of the marketing budget for most companies, depending on the industry they operate in. However, the real effectiveness of promotions can be extremely difficult to measure and understand due to the multiplicity of variables involved.
- Firstly, promotions can take on dozens of forms and combinations – simple discounts, Buy One Get One (BOGO) and variations thereof, buy product A and get a discount on product B, couponing, special packs and many combinations of these.
- Secondly, variables such as the timing, length and frequency of promotions and depth of discounts offered.
- And thirdly, seasonality, weather, competitor activity and your own marketing and other promotional activities that might be running concurrently.
All of these factors can have an impact on the success and profitability of promotions in terms of the incremental sales and revenues they generate. Or not.
Analytic Edge’s Promotion Effectiveness Analytics solution comprehensively looks at all these variables and continuously analyzes data to provide an ‘always-on’ solution that delivers insights and detailed recommendations to help companies maximize promotion effectiveness. The solution helps companies take data-based decisions on the following key aspects of their promotion strategy.
Choosing the Right Promotion Formats – Different types of promotions can vary considerably in terms of their impact on volume, value and profitability. For example, Buy One Get One (BOGO) type promotions may work well for certain categories of products or in a certain market, while a flat discount or price-off may work better for other product categories or markets. Understanding the promotion categories or formats that are most effective for your business, product lines and markets is key to building a successful promotions strategy that delivers on the desired objectives.
Promotion Timing, Duration and Frequency – When you run your promotions, for how long and how often can have a material impact on the results they deliver. Very long or frequent promotions and discounts might make consumers price sensitive so that it becomes difficult to revert to your regular pricing. Analyzing the performance of past promotions taking into consideration the time of the year they were run (e.g. months, seasons, holidays etc.), length of the promotions (e.g. number of days or weeks) and frequency of promotions (e.g. weekly, once a month, once a quarter etc.) and looking at the incremental bump in sales and revenues can guide you on the optimal promotions calendar for your business.
Depth of Discounts & Price-Offs – Deciding the quantum of discounts to offer in promotions can be a delicate balancing act. Too low a discount might not achieve the objectives of getting customers to try or buy your product, while offering too high a discount might cause cannibalization of your other products, or bring down overall profitability, or even negatively impact brand equity and brand perception of the product. Determining the right discounts to offer needs an in-depth analysis of past promotional campaigns to understand what level of discounting is right for your product under various circumstances.
Combining Promotions with Other Marketing Campaigns – Running a particular promotion in combination with other promotional or marketing campaigns can deliver a multiplier effect in terms of improved results in some instances, while it may reduce effectiveness in other cases. Leveraging analytics to look at past performance data can help you understand which promotions and marketing programs work best together in order to determine a winning promotions strategy.
Continuous Promotion Effectiveness Measurement – In today’s dynamic marketplace environment with many ever-changing variables, a promotion effectiveness analytics solution that provides a one-time set of insights based on past data from a fixed period can deliver only limited benefits. Analytic Edge’s ‘always-on’ solution goes beyond this and continuously measures effectiveness of your promotions based on the latest weekly or monthly data. This means you get frequent near real-time insights that allow you to continuously tweak your promotions strategy and calendar for each week or month – What promotions to deploy? For which products? At what level of discounts? At which stores? – based on what has been delivering the best results and what has not been working.
Promotion Effectiveness Analytics Solution Benefits
- Continuously refresh your promotions strategy and calendar based on real-time data
- Determine the right promotion formats for each product and market
- Plan when, how long and how frequently to run different promotions
- Decide the optimal depth of discounting that provides the maximum volume, value and profitability lift
- Combine promotions and marketing programs intelligently for maximum sales impact