Our client, one of the world’s largest premier hotel chains, aimed to increase customer order spending by providing recommendations for combo offers.
To achieve this goal, we undertook a comprehensive approach:
- Exploratory Data Analysis: We conducted a thorough exploration of order data to identify trends in item combinations within various orders.
- Seasonal Analysis: We leveraged order data across different seasons, recognizing that certain menu item combinations varied with seasonal shifts.
- Market Basket Analysis: For each combination of menu items taken two at a time, we conducted market basket analysis. We calculated support, confidence, and lift metrics using transactional data.
- Threshold Determination: By establishing thresholds for support, confidence, and lift, we determined the ideal combinations of menu items to recommend to customers.
Our analysis yielded valuable insights and outcomes:
- The likelihood of finding Belgian waffles in transactions with orders for eggs is 19 times higher than the typical probability.
- Offering new combo deals led to an incremental order revenue gain of 1%.
|Belgian Waffles||Eggs to order||0.1%||49%||19.95|
- Calculation for Incremental Revenue Gain per Day: = (0.9 * 400 * 70 + 200 * 30) – (400 * 50 + 200 * 50) = INR 1,200
- A 10% discount was applied to the combo deal.
- Acceptance probability increased by 20%.
- The price of individual items was set at 200.