Finding Actionable Market Differences to Improve Effectiveness

The Challenge

National coupon redemption rates may hide important market differences. Coupon tactics that work well in one market may not work as well in another. A national packaged-goods marketer was interested in finding out how their offers performed in various markets across the country. So, they turned to Inmar VSI Promotion Consulting for help in gaining a better understanding of the redemption rates generated in selected markets.

The Solution

Inmar VSI suggested the client use market-level coding to collect important information on the variability of redemption rates from market to market. Using different coupon offer codes for different markets and analyzing the resulting data helps determine where more or less help (budget) is needed to generate volume.

The client gained valuable market-level knowledge on shoppers' response to coupon offers. Coupling this redemption information with other market attributes -- such as the brand's sales by market and Inmar VSI's proprietary knowledge of retail coupon doubling policies by market -- the client's coupon promotions could be optimized for maximum efficiency (cost per unit moved) and effectiveness (redemption rate/volume).

The Results

In one promotion, the brand had a national redemption rate of 2.0%. However, when looked at from a market-by-market standpoint, redemption rates generated ranged from 0.3% to 6.0% across the markets. This is a significant (and actionable) spread!

Using market-level redemption rates and information, Inmar VSI was able to work with the client to develop a market coverage approach and promotion strategy that aligned their offers with varying values with the best markets for those offers. They were able to redeploy circulation and modify values to best meet their objectives. This market-by-market approach allows Inmar VSI to help the client get better redemption rates, volume and retailer coverage with a more effective spend of promotional funds.

Inmar VSI further suggested that the client use market-level coding across several FSI drops to collect marketing data and information that could be used to further optimize future coupon drops and help shape the overall coupon approach and tactics.

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