Reducing Promotion Spend While Protecting Volume
Analytics in Action
A large, category-leading CPG company with a history of heavy promotional investment wanted to take a fresh look at their brands’ collective promotion strategies. Their goal was to identify opportunities to significantly reduce promotion spend while minimizing any potential negative impact on units moved.
Inmar Promotion Analytics was enlisted to aid in the effort and immediately initiated an analysis of the last five years of promotional events and redemption history for all the client’s brands. Opportunities for potential cost savings were identified in three areas: circulation, offer values and page size.
The Inmar team developed an annual promotion plan for the client that included specific strategies for addressing the indentified savings opportunities. In addition to modeling the financial impact of the plan, the team also developed a custom budgeting tool that allowed the client to input proprietary margin and profitability metrics to more accurately predict ROI of planned promotional events. Inmar’s Promotion Analytics team also monitored results from the implementation of the plan – analyzing outcomes from the application of new tactics as offers went to market. This close observation and study enabled Inmar to provide refined ongoing recommendations as shoppers responded to new, optimized offers. Application of the recommendations from Inmar Promotion Analytics saved the client $750,000 in upfront distribution costs while saving an additional $4.5 million in redemption and overall program costs throughout the year. The net result was a 22 percent reduction in promotion costs with minimal effect on units moved.