In anticipation of a major promotional launch CG companies plan compelling sales collateral and a set of economic enticements aimed at winning existing shoppers but also persuading potential customers who currently buy competitor’s products. But you may be missing one critical piece of the puzzle – timing.
It’s not just about what you have to offer – it’s also about when and where your promo offer will stand the highest likelihood of success.
This is especially true when a potential customer would be most inclined to consider switching can mean the difference between a successful or unsuccessful promotion. Guesswork won’t help you win new business. Instead, let the data point the way – from the ground up. You have the data. What you need is a rigorous process to use it effectively.
Breaking the Habit
Getting a potential customer to switch to your product is all about breaking existing habits. That’s an extraordinarily hard thing to do. Our brains are wired to convert active decision making to passive habits wherever and whenever possible. It’s how the brain conserves energy. It’s also why those excellent promotional discounts and attractive collateral may fall flat if the offer doesn’t catch the customer at a time when he or she might be more willing to actively engage with the possibility of change.
Here’s where good data comes into play. You have an extensive trove of data relating to timing, execution, quantities, prices and promotions of past sales. Trade Promotion Optimization (TPO) is all about eliciting valuable insights from this data around targeted objectives. So, to continue with our example, if “getting more potential customers to switch to our product” is the objective, then important answers about optimal timing likely reside in that sea of past sales data.
Think about products with a high seasonality factor. Simple guesswork – which is still how most decision makers approach the problem – might suggest that the best time to approach a potential new customer is right when the seasonal peak is at hand. After all, that’s when purchasing incidence will be higher. But our comments above about breaking habits would argue that peak season could in fact be a poor time to induce a customer to switch. Think about it – in the middle of peak season, the retailers main concern is probably keeping the shelves stocked, at whatever cost.
Promotional offerings are likely to make little impact here, and valuable trade spend will be wasted.
For e.g. in summers you rarely see half price promotion on ice-cream.
What a close analysis of the data may elicit, however, is that first-time purchases (buy-in) of highly seasonal products tend to occur a couple months before peak season. There is a logic to that: peak season is close enough to be on the customer’s mind – hence openness to ideas about how to make it work better – but not so close that the brain is overwhelmed with the immediate priority of stocking shelves. A thoughtful promotional campaign could make a real impact here. The data can give you further insights into the kind of price discounts, promotional displays and supporting collateral that would resonate best with particular product-customer combinations.
Right Product, Right Customer, Right Time
For companies with thousands of products and thousands of customers, the potential number of product-customer configurations around key value drivers like price and promotional benefits is exponentially massive – too massive for simple human computation. Trade Promotion Optimization offers a way to tease valuable insights out of the data that you already have so that your promotional spend has the best chance of connecting the right customer with the right product – at the right time. The Promax Optimize solution takes your promotion returns to a new growth trajectory with ROI Analytics and Predictive Planning complemented by insights from skilled CPG domain experts and data scientists.
Promax TPO has predictive planning capability – providing users the ability to quickly and efficiently conduct ‘what – if’ analysis to model different promotion scenarios, and review systematically generated business outcomes to determine the best combination of promotional inputs. It enables a powerful planning and analysis ecosystem that can be tailored to the needs of each business stakeholder.
Our data science and professional services teams are led by experienced domain experts to give you competitive advantage through best practices in trade promotion optimization.
For more information, visit our website http://promax.wipro.com
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