Measuring the Effectiveness of Sales Promotions

Last Updated on Thu, 04 Jan 2024 | Marketing Communications

Sales promotions are not limited to retailers and resellers of products. Sports marketers have found them a very effective way to attract crowds and have been able to measure their relative effectiveness by the number of fans attending games. Major

Figure 19-18 Measuring the effects of FSIs

A study by Promotion Decisions Inc. examined the actual purchase data of users and nonusers of 27 coupon promotions in its National Shopper Lab (75,000 households) over a period of 18 months. The findings:

• FSI coupons generated significant trial by new and lapsed users of a product (53%).

• Repeat purchase rates were 11.8% higher among coupon redeemers than nonredeemers.

• 64.2% of repeat volume among coupon redeemers was without a coupon.

• There was no significant difference in share of volume between buyers who used coupons and those who did not.

• Coupons returned between 71 and 79% of their cost within 12 weeks.

• Full-page ads provided higher redemption rates, incremental volume, redemption by new users, and a higher number of repeat buyers than half-page ads.

• Consumers who used coupons were brand loyal.

League Baseball teams have seen their attendance increase for those games in which promotions are offered.

A number of organizations measure sales promotions. One firm, MarketSource, provides marketers with a basis for measuring the effectiveness of their sampling programs. While too involved to discuss in detail here, the program calculates a breakeven rate by dividing the sampling investment by the profit for the user. If the conversions exceed the breakeven rate, the sampling program is successful.37 Promotion Decisions Inc. examines the impact of freestanding inserts (FSIs) (Figure 19-18).

Other measures of sales promotions are also available. Schnucks (St. Louis), Smitty's Super Valu (Phoenix), and Vons (Los Angeles) have all used pretests with effects measured through scanner data. Others have employed this methodology to examine brand and store switching, alternative promotions, price discounts, and merchandising tech-niques.38 Other advertisers use awareness tracking studies and count the number of inquiries, coupon redemptions, and sweepstakes entries. They also track sales during promotional and nonpromotional periods while holding other factors constant.

One recent technological development designed to track the effectiveness of sales promotions at the point of sale is offered by Datatec Industries. This automated system, called Shopper Trak, places sensors in the store that track whether a person is coming or going, calculate the shopper's height (to differentiate between adults and children), and gauge traffic patterns. The system helps retailers evaluate the effectiveness of promotions or displays located throughout the store.39

Elizabeth Gardener and Minakshi Trivedi offer a communications framework to allow managers to evaluate sales promotion strategies over a given set of specific criteria. Borrowing from advertising applications, and using four communications goals—attention, comprehension (understanding), persuasion, and purchase—the researchers show the impact of four promotional tools and everyday low pricing (EDLP) on each goal (Figure 19-19). In addition, the impact of everyday low pricing,

Figure 19-19 Conceptual framework analysis

Continue reading here: Measuring the Effectiveness of Other IMC Program Elements

Was this article helpful?

0 0

Related Posts

Readers' Questions

  • Brandon Thomas
    How to measure the effectiveness of public relation and sales promotion?
    1 year ago
    1. Measurement of Reach: Reach is the number of people that your public relations and sales promotion efforts have reached. You can measure reach by gathering customer data from various sources such as website visits, customer surveys, tracking customer interactions with your organization, and analyzing customer feedback.
    2. Measurement of Impact: Impact is the degree to which your public relations and sales promotion efforts have influenced the intended target audience. You can measure impact by tracking customer awareness and behaviors, determining how your organization’s reputation and credibility has been improved, and analyzing how customer loyalty has been impacted.
    3. Measurement of ROI: Return on Investment (ROI) is a measurement of how much value has been generated from your public relations and sales promotion efforts. To calculate ROI, you need to compare the total cost of the efforts to the total benefit that has been generated.
    4. Measurement of Conversion Rates: Conversion rates measure how many of the people reached through your PR and sales promotion efforts have chosen to take a desired action. This could include signing up for a newsletter, registering for an event, or making a purchase.
    • Thelma
      How to measure the effectiveness of public relationand sales promotions?
      1 year ago
      1. Measure the Amount of Publicity Generated: One of the most effective ways to measure the success of public relations and sales promotions is to determine the amount of publicity generated in the media. This can be measured through the number of stories in print, broadcast, or online media outlets and the amount of coverage generated by those stories.
      2. Analyze Website Traffic: Measuring website traffic after a public relations or sales promotion campaign can provide insight into the effectiveness of the campaign. If the campaign was successful, you should see an increase in website visits, as well as an increase in user engagement, such as time spent on the website or number of pages viewed.
      3. Monitor Social Media Performance: Social media plays a major role in both public relations and sales promotions. Therefore, it is important to monitor both the number of followers and the engagement of those followers in order to measure the success of a public relations or sales promotion campaign.
      4. Track Changes in Sales: Measuring the change in sales is a key way to measure the effectiveness of public relations and sales promotions. If the campaign has been successful, you should expect to see an increase in sales. You can also track the source of the sales, such as direct or indirect sources, to determine the effectiveness of the campaign.
      • daisy
        How to Measure the Effectiveness of Sales promotions?
        1 year ago
        1. Analyze sales figures: Check sales figures before and after the sales promotion to measure its effectiveness. Compare revenue, profit and unit sales from the same period in the previous year or month.
        2. Observe customer behavior: Monitor customer behavior before and after the promotion to get an idea of how it has impacted customer purchasing habits.
        3. Track website traffic: Track how many people visited the website and what actions they took. Analyze sales funnel data to measure the effectiveness of the promotion.
        4. Monitor social media engagement: Track your social media metrics like web mentions, hashtags and shares. This will give you an idea of how much reach the promotion has achieved and its overall impact.
        5. Customer surveys: Ask customers directly about the promotion to gain valuable feedback. This will help you understand how customers feel about the promotion and what changes you can make for the future.
        6. Offer discounts: Analyze the effectiveness of discounts. Track how many customers took advantage of the offer and how much money was saved. This will help you understand how customers view discounts and how they affect your bottom line.
        • sian stewart
          How can we measure the effectiveness the coupon promotions?
          1 year ago
          1. Track coupon redemption rate: Monitor how many coupons are redeemed out of the total number of coupons distributed.
          2. Track customer purchases: Measure the amount spent by customers who redeemed coupons versus those who didn't.
          3. Analyze customer demographics: Gather data on who redeemed coupons and compare against the total customer base to determine how well the coupons were targeted.
          4. Monitor new customer acquisition: Monitor the number of new customers acquiring as a result of coupon promotions.
          5. Analyze customer loyalty: Evaluate customer loyalty before and after the coupon promotion. Track the percentage of customers who repeat purchase after redeeming the coupon.