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How to Guide


How to evaluate Sales Promotions

How to evaluate Sales Promotions

1. Initiate evaluation activities by designing an overall measurement framework that includes all the ‘hard’ and ‘soft’ measures your organisation needs to monitor the overall impact of communications on sales.
2. Create a ‘dashboard’ which encapsulate both macro and micro measures such as:

MACRO: Sales (volume, value and rate); Distribution; Price vs competition; Market share; Brand image and attributes versus competition; Customer satisfaction; Customer acquisition and retention volumes year to date; Key customer segment membership status (and movements since last measurement); Churned customers (volume and value); Customer lifetime and value

MICRO: Promotional ROI; Target versus responder profile; Response volumes; Response distribution over time
3. Involve the operational teams (either in-house or supplier partners), who will be required to deliver data and information to underpin the evaluation – agree service levels, business processes and accountability.
4. Apply the ‘so what’ rule to the measures you are considering. If you can’t change anything in your business as a result of that measure then it’s probably just ‘nice to have’, and of no real value.
5. Harmonise evaluation activities with your market and customer segments so that you can be sensitive to critical areas of your marketplace.
6. Develop performance benchmarks by media, channel and promotion type to support an ongoing ‘Champion/Challenger’ approach.
7. Don’t be daunted by data challenges – do the best you can and keep focused on what needs to change to deliver the optimal information.
8. Ensure your communications planning process allows the results to influence promotional rollouts and future communication plans in a timely way.
9. Allocate a discrete R&D budget for testing to ensure it can be incorporated in every promotion.
10. Centralise results so that the whole team has easy access to lessons learned and relevant trends.
11. Design global evaluation templates for multinational companies to ensure the viability of like for like comparisons.
12. Remember: not all volume sold on promotion is extra volume. Some sales may be brought forward or diverted from elsewhere, and some are sales that you would have made anyway.

Credits: Shelagh Regester from Arc Marketing


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