How to measure the real effect of a promotion?

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Thus, the effect of a promotion should be measured comprehensively. A direct increase in sales of a product is not always a positive result of a campaign, and a decrease is not always a negative result. For example, the same big discount on chips may seem unprofitable for a retailer when the sales amount is lower than the purchase costs. But this does not mean that the promotion worked poorly.

If we use analytics skillfully, we will see in the receipt namibia whatsapp phone number data how, when buying chips at a discount, people also buy lemonades. That is, you can put a discount on chips - and this will provoke an increase in sales of lemonades at a regular price, compensating for the losses from a large discount on snacks.

Only a deep comprehensive analysis of all important components based on the collected data makes it possible to objectively evaluate the effectiveness of the promotional campaign.



On the topic: Why discounts don't always work and how to correctly create a price list



How not to become a hostage to promo?
The longer the discount is used, the more its effectiveness dissolves in time, leaving only the direct effect of increased sales significant. But it gradually decreases. The buyer quickly gets used to the promotional price and is reluctant to return to purchases at the base price.

The discount gradually loses its appeal, and the buyer begins to perceive the reduced price as a regular one. And the next time the retailer wants to set a promotional price for a product, consumers will expect an even greater discount, and sales will not increase. Buyers' attention will switch to cheaper similar products from another manufacturer or to purchases in another retail chain.



Retail Promotions

Promotions should be planned carefully: the buyer should not get used to the reduced price



It turns out that a new advertising campaign must offer the consumer an even bigger discount, otherwise it will have no effect. In retail, this process is called "promo needles", since sellers become dependent on discounts as the only way to increase sales - and are forced to keep discounts constantly and often increase their depth.

So, you should plan your promotions carefully so as not to spoil your customers and not reduce your profitability by reducing the margin between wholesale and retail prices.