Sales Promotions

Maximize ROI with better targeting and reduced costs

Context

For several years, distributors have been rationalizing their promotions to reinvest in prices, loyalty programs, and services. There are two main reasons for this:

  • Customers have come to view promotions as negative in the long term, due to their perception of fair pricing and their purchasing frequency
  • Insufficient Return on Investment (ROI), which does not factor in the impact on the margin and operations.

This rationalization trend goes hand in hand with gradually implementing the comprehensive management of all levers, with the aim of more effectively allocating commercial investments.

Challenges

Our experience has taught us that in order to optimize sales promotions, companies need to focus on several areas:

  • Better targeting promotion to maximize ROI:
    • Segmented targeting of customers, based on their promotion elasticity by channel, product type and mechanics
    • Segmented distribution of brochures
    • Decentralization of decision-making or promotional operations to adjust to the local commercial and events management context
       
  • Measuring ROI of promotions as a total cost:
    • Inclusion of the cost of media (media x dissemination), operating costs (from the product manager to the department manager), and total logistics costs incurred
       
  • Cutting promotional costs:
    • Supplier negotiations on price, product, stock, and promotional flow components
    • Optimization of promotion management processes
    • Targeted mailing lists as an alternative to paper media

How can Argon Consulting help you?

Argon Consulting helps distributors to optimize their promotions, from identifying to implementing levers, by assisting in:

  • Establishing your sales promotion strategy by channel/product/customer/mechanics and the targets to pursue (traffic, frequency, basket, etc.)
  • Elaborating customer and distribution market segmentation methodologies
  • Implementing shared cost and ROI calculation models for the business lines concerned (Marketing, Merchandise, Supply, Shops)
  • Implementing management tools and shared stakeholder governance to measure the impact on each stakeholder’s area
  • Defining the best processes for operational management of sales promotion
  • Organizing cost-cutting programs for media production and distribution costs