How to generate an 800% promotional ROI?
The current war on price and promotion is a destructive descent into unsustainable prices and shrinking margins – they are driven further and further down as retailers vie to offer the lowest prices and something has to change – but what?
Global retail expert, emnos offers an alternative approach to promotion management and early projects have proved extremely effective. For example, a major French retail chain made an 800% return on its investment by applying this different, more constructive technique.
Courage under fire will be rewarded
Leaflets are currently the mass weapon of choice – you just fire and hope the message lands in the right place. It reduces overall margins, generates unwanted responses and attracts cherry picking shoppers. The weapon emnos has developed to fight this promotional battle shifts the emphasis from mass promotion on every product towards personalized precise targeting, but still on a mass scale.
In order to maximize ROI, it is crucial to identify the promotions which drive value and increasingly, customers are demanding relevance. Often mistakenly perceived as small scale and expensive, personalized promotion can actually be applied on a large scale and is very cost effective. Rooted in measurable customer needs, it delivers on many levels including generating loyalty, supporting selective price reductions and importantly, it is not fully visible to the competition.
Without doubt, it takes courage to jump off the bandwagon and go your own way, but the rewards are significant as it only takes a 10% shift to generate an excellent return. A second retailer saved €100 million simply by rebalancing its promotional channels.
Finding the right balance
Mass and targeted promotions are generally managed in silos and processes have to change in order to create a broader promotional view. To produce the best possible mix, targeted and mass promotions should be planned, prioritized and measured together to ensure each generates the strongest impact and highest customer satisfaction levels.
The bottom line is that balancing promotions and introducing mass personalization increases margins and sustains price flexibility.
The full story in Paris
Elodie Perrigaud, Head of Category Management Solutions at emnos, has been speaking on this subject at the LSA “Marketing du Prix” Conference on Thursday 27th April 2017.