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Increasing Margins Through Strategic Promotion Management and Customer Insight

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Increasing Margins Through Strategic Promotion Management and Customer Insight

Understanding Customers Who Buy on Promotion

Why Focus on Promotional Buyers?

Promotional buyers are a distinct segment of your customer base that predominantly engages with your brand during sale events or when discounts are offered. By identifying and understanding this segment, you can tailor your marketing strategies to convert occasional shoppers into regular customers, thus increasing their lifetime value.

Analyzing Purchasing Patterns:

Begin by examining the purchasing habits of your customers who frequently buy on promotion. This involves looking at sales data to identify common characteristics and behaviors of this segment.

  • Customer Data Platform (CDP) Usage: Utilize your CDP to track and segment customers based on the share of product that they buy on promotion thanks to the pre-computed attributes.

  • Behavioral Analysis: Assess which promotions have been most effective in attracting these customers and analyze the types of products they are most likely to purchase thanks to the Custom Audience filters.

Targeted Engagement Strategies:

  • Personalized Marketing: Develop personalized marketing campaigns that resonate with this segment, highlighting products they are likely to purchase even outside of promotional periods.

  • Exclusive Pre-Access: Offer early access to sales for these customers, controlling the promotion rates, enhancing their engagement and making them feel valued.

Controlling Promotions Through Your Loyalty Program

Leveraging Loyalty for Controlled Promotions:

Using your loyalty program to manage promotions allows for refined targeting and better control over discount strategies, which can help preserve margins while fostering customer loyalty.

Strategic Promotion Management:

  • Targeted Discounts: Offer special promotions tailored to the buying habits and preferences of loyalty members, which can encourage full-price purchases alongside discounted items.

  • Reward Points Incentives: Instead of direct discounts, use reward points as a way to incentivize purchases, which can be a less costly way to drive sales and encourage repeat business.

Integration and Personalization:

  • Seamless Experience: Ensure that the loyalty program is seamlessly integrated with the customer’s shopping experience, making it easy for them to utilize their benefits.

  • Dynamic Offers: Dynamically tailor offers based on customer data from the loyalty program, ensuring that promotions are both timely and relevant.

Implementation and Optimization

Measuring Success and Making Adjustments:

  • KPI Monitoring: Regularly monitor key performance indicators such as redemption rates of promotions, changes in customer buying behavior, and overall sales growth.

  • Feedback Loops: Establish feedback mechanisms to gather insights from customers on their perceptions of the promotions and loyalty benefits, using this data to refine your approach.

Conclusion

By effectively understanding customers who buy on promotion and strategically controlling the promotions you offer through your loyalty program, you can increase both customer satisfaction and your profit margins. This targeted approach not only helps in managing discounts more effectively but also enhances the overall value proposition of your brand to your customers.