The term ‘successful promotion’ is one of those that has been around for many years, but like the ‘selfie’, has only recently gained an increasing amount of attention. For the ‘selfie’, the advance of technology and software has led to a generation of phones capable of taking and rapidly sharing photos. For the ‘successful promotion’, it is the rapid and ongoing increase in promotional activity driven by retailers that has led us to that all important question; what really makes a promotion successful?
Here at FuturMaster, we compiled our top five contributors to running a successful promotion.
1. Profitability and Margin Management
It goes without saying that, in most cases, promotions should be profitable (occasionally strategic promotions may be loss leaders). The measurement of that profitability should be included at the planning stage. However, a promotion that makes a profit may not be good business if the total margin on that promotion is less than if it had not been ran at all. This should be evaluated before agreeing a promotion.
2. Accurate Forecasting
Getting an accurate volume forecast throughout the promotion duration is vital for improving promotional margins and closing the gap between base sales and budget. Indeed, a good volume forecast not only ensures the right materials are in the right place at the right time for customer service levels to be maintained, but also that waste and obsolescence are minimised.
3. Capacity and Material Management
Having the right production capacity and the right materials available for the promotional product is another key factor for a successful campaign. Clear and accurate production and supply planning tools are central to being able to respond effectively to the volatility of demand and to optimise stock accordingly.
4. Merchandising and In-Store Execution
Delivering the right promotional product, at the right place and right time, ready for display has an enormous impact on your brand imaging and reputation. If it goes wrong, the promotional products aren’t there or the display isn’t right, not only will your brand suffer, but also the trusted relationship you built up with the retailer. The key to getting this right is to have the best tools in place to collaborate with the retailer throughout the promotion life cycle, from the promotion idea to the retailer’s EPOS sales.
5. Post-Promotional Analysis
Do you know what types of promotion are most profitable? For many companies, this is a difficult question to answer with any degree of certainty since ERP systems often don’t distinguish between promotional and non-promotional orders. Rapid and effective analysis of promotional performance using customer orders or EPOS data is fundamental to post-promotional learning. Having this insight at your fingertips enables you to improve the profit performance of future promotional activity.
What do you think are the key factors for a successful promotion? We’d love to see your comments below.
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