ROI Driven Promotions Strategies
The festive season is always very important to Indian marketeers and consumers and has become even more so in the post-pandemic world that has left everyone with fewer reasons to celebrate and indulge.
According to Deloitte’s annual holiday retail forecast, holiday sales are likely to see increase between 7-9% to a total of approximately $1.3 trillion during the November to January timeframe. Deloitte also forecasts that e-commerce sales will grow by 11-15%, year-over-year, during the 2021-2022 holiday season.
Need for promotional analytics
In the current increasingly challenging and competitive environment, retailers rely heavily on promotions and offers to generate higher returns. And even though promotions are powerful tools for enhancing sales, for many businesses, effective execution still remains a challenge.
Marketeers shoot up their marketing budget by driving numerous promotional campaigns and offers across multiple channels and sales avenues but they find it difficult to understand why there wasn’t a noticeable lift in revenue despite aggressive promotion planning. This can be attributed to the lack of clear insight and disparity between activities associated with promotional campaigns.
Types of promotions
Today, consumers are left with a range of promotions to choose from, in almost all the product categories and at all sales avenues, be it in-stores, digital, ecommerce or hyper-markets. Retailers are offering mix of different types of promotions techniques:
- Advertising
- Visual Merchandising and in-store decorations
- Price Discounts
- Quantity Discounts
- Free Shipping/ Shipping discounts
- Loyalty and Rewards Programs
- Coupons
Despite spending so much effort and money on marketing and promotions, on the basis of a comprehensive research study by Harvard Business Review, only 16% of the trade promotion events are profitable and in more than half of the promotions by established brands, increased advertising did not result in more sales.
Pre-launch promotional analytics
Retailers often fail to realize that a consumer can have their own parameters like age, gender, requirement, income and preference to evaluate a promotion. Customer behaviour and past performance analytics is extremely important before launching an effective and ROI driven campaign.
Customer Analytics
RACE Framework is a popular technique to prepare an overall marketing strategy by getting a comprehensive view. Collect the data at every touchpoint across the customer journey and get critical insights. Customer analytics is not limited to customer demographics but also includes analysis of customer buying patterns, preferences and choices, previous purchases, customer loyalty and much more.
Past Performance Analytics
Past performance analytics, also known as Intervention analysis, can be another way to analyse historic sales data with respect to promotions and thus help in framing future promotions. Intervention analysis technique rests upon historical data and judgment of a practitioner. The end result using intervention analysis is that practitioners have better understanding of their past promotions and hence can design near accurate attractive future promotions.
Post-launch promotional analytics
Promotional analytics also includes measuring KPIs of different promotions and campaigns, analysing the performance of each channel and to evaluate the contribution of each promotional campaign to sales.
The most important aspect of campaign evaluation is to review the pre-decided objectives and goals and outcomes to see if they are met or not.
Market Mix Modeling (MMM) is a technique which helps in quantifying the impact of several marketing inputs on sales and helps in ascertaining the effectiveness of each marketing input in terms of Return on Investment. Measure and report key performance indicators from the campaign and extract critical insights.
Solutions by TransOrg Analytics
At TransOrg, we enable retailers and consumer goods companies to derive maximum gain from promotions through advanced analytics. Our solutions offer valuable insights on customer behaviour, marketing channels, campaigns performance and other critical insights that facilitate better planning, assessment, forecasting, tracking and execution of promotional campaigns.
Check out our comprehensive suite of marketing and customer analytics solutions, here, that helps in customer segmentation and profiling, to understand customer behaviour, to evaluate customer buying patterns and to provide critical market and sales insights. We connect the customer, the product and the retail organization on a centralized platform, giving a single view of the promotion to all decision makers. The promotion, customer transactions and inventory are managed and viewed on a single platform.
Also, check out our Market Mix Modelling solution, that provides deep understanding on the performance of each marketing channel and promotions and helps in measuring the contribution of each campaign on sales.
