Promotions are one of the biggest drivers of sales and traffic in the retail world. While it can be easy to measure success rate and track your promotions’ effectiveness for one store, it can be more complicated to do the same for multiple stores in a chain. There are multiple variables that may affect a promotion’s success.
Define Clear Promotion Goals and a Timeline
As you launch a new promotion you need to establish a goal for it. It’s easy enough to want to have a promotion that increases sales overall, but is that a defined goal? Assess your goals for promotions on a more granular level for better measurement.
Sample goals could include the following:
- Increase sales or awareness of brand or product
- Improve sign-up rate for a loyalty card or program
- Boost sales in a particular product category
- Clear out seasonal stock
- Reduce overstock
Even if your store launches a promotion during a popular sales period, such as Christmas or Back to School, it’s not enough to have a goal for simply more sales during that time. As you formulate your goals, be sure you clearly define a dollar amount or a units sold figure. The goals listed above will come with their own needs of measurement so set a benchmark for the previous sales (or sign-ups), then when the promotion ends, you can measure your performance against the benchmark and see how you succeeded.
Above all, be sure you communicate your goal to your staff so they can actively be part of it — if they’re unaware you want to hit a certain target, they won’t participate in the promotion as needed. Once you’ve defined and staked your goal, use a strategy where you can track the progress towards that goal.
A goal needs a specific stated timeline for accurate measurements. Not only do you need a benchmark for comparison’s sake, but you’ll also need a timeline as to when that goal should be achieved. Your timeline should also include any set up that needs to occur for the goal, such as installing a new display or signage.
Once you’ve decided on the goal, timeline and the individual elements, it’s time to look at the best way of tracking promotions. There are multiple ways to track promotions. Let’s look at a few ways you may track with your POS:
- Inventory numbers – If your goal was to sell consistently in a certain product category, then you can keep an eye on the diminishing inventory and restock requests
- Flag or filter data – Your POS might have a way to flag or filter certain data points among your sales, such as average sales of a certain item or average sales amount in a category
- Tracking promotions fully in the POS – If someone is responding to an offer, such as Buy One, Get One, be sure that you enter they used a BOGO in the transaction data
- Loyalty card holders – With certain promotions specific to loyalty programs, attach the purchase amount and when it was used as you input loyalty card members’ information
Be sure you’re tracking promotions consistently and look at the sales data multiple times to ensure everything is accurate. If you’re using coupons or promotional codes, run a few tests to see if they apply correctly to the items as they’re scanned. Merely discounting the item by hand will not show accuracy in terms of how many discounts were redeemed, so let the POS apply the discount and have the information of purchase price + difference in price recorded. Again, this ties into defining a goal since you’ll have your POS set to reflect the accomplishments of those goals.
Calculate Your ROI
Running a promotional campaign across your chain of stores unfortunately isn’t cheap. For every $1 you spend, you probably want to make 5 times that. New signage, shelf talkers, and other displays cost money, but are effective in getting the customer’s eye. Once you’ve figured out the cost for any promotional efforts you need to compare it the sales of each store. You should conduct this study during and after the promotion. If you notice a store flagging in its sales, you can make a note to improve their performance. Perhaps they weren’t able to put the signage out or the staff weren’t well-versed with the products in the promotion. Tools like CB4 can send a store’s staff alerts if the item isn’t selling to its full potential to ensure the item is displayed and marked down appropriately. Keep an eye on the individual store metrics and you’ll be able to address the operational issues as they arise. Was there a store where the promotion was more successful? You can look at how they performed and see what sets them apart from the other stores across your chain.
Your customers want promotions that they deem valuable. Before you start tracking promotions, be sure there’s value added or your efforts may be met with lackluster response. Once you define your goal and timeline, and have your data set to record the promotion response, then you can break down the data both during and after the promotion.
Learn more about how CB4 helps to track the success of promotions across your chain or contact us today for a short demo.