How To Design Sales & Marketing Promotions

Analytics and Insights Team

Identifying true revenue incrementality of Sales incentives and promotions is one of the biggest challenges faced by companies. This problem gets magnified when mutiple promotions are launched in close proxomity to one another. At Prescriptive Insights we have a developed an advanced methodology for desiging and conducting experiments that enable companies to isolate and launch the promotions that have the highest ROI. Leveraging our analytical framework, we enable companies to Рa) Test the hypothesis b) Allow what-if scenarios and c) Generate a series of action steps. We recommend that the developers of sales and marketing promotions ask the following questions while designing  and testing promotions

  1. What is the objective of the promotion?  Is it to increase frequency of purchase or increase order size? Can specific outcomes be developed to meet ROI goals?
  2. What is the target group? How should the control group be selected?
  3. How big should the test and control groups be for results to be statistically significant? How long does the test need to run?
  4. What is the analytical design to compare test and control groups? Can the design ensure that noise and normal performance be isolated from true incrementality? Can the results be deemed to be statistically significant?
  5. Can pre-test factors influence the subsequent behavior of the test group? Are there specific maco and seasonal trends that need be incorporated in the design of the promotion?

Promotion designed with the above principles will ensure the accurate analysis of promotions and allow key stakeholders to extract defintive conclusions. It is essential for companies to develop and maintain a comprehensive repository / catalog containing the design and analysis of all promotions tested and launched. These insights contained in the respository should be presented to decision makers via advanced visualizations which will enable them to quickly identify the promotions that are successful versus those that have minimal impact. This in turn will ensure that all stakeholders arrive at the same conclusions regarding the ROI of the various promotions.


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