Need to stop price erosion Instead of growing categories, current promotions erode prices and leave retailers with shrinking margins.
Need promotions to drive growth Instead of attracting new customers, boosting sales, and growing the top line, current promotions serve only a small fraction of “deal-prone” buyers.
Need more trade dollars Because so many current promotions fail to deliver sufficient growth, retailers require even more trade spend dollars from manufacturers to make up the difference.
Need to proceed with confidence Given the hazards involved with rolling out untested promotions, retailers are understandably reluctant to try something new, preferring to stick to what they did in the past.
Need to grow Consumer goods manufacturers spend money to make money, yet are stuck with promotions that don’t attract new customers, increase basket share, or boost volume.
Need to lower trade spend Much to sales leaders’ dismay, consumer goods manufactuers are increasing the portion of revenue that they devote to promotions — from 17% of revenue in 2012 to up to 25% by 2016.
Need promotions to perform Because more than 50% of today’s promotions fail to deliver an ROI, the majority of manufacturers believe promotions provide little or no incremental value. Yet they are critical to the business.
Need to proceed with confidence Since sales teams don’t have a crystal ball, they can’t predict how consumers will respond to new, untried promotions.
Offer Innovation – A radically different approach
Offer Innovation is a new, proven, low-risk way to methodically and quickly design effective promotions.
- Combines the latest insights from behavioral economics with multivariate testing techniques, patent-pending data science algorithms, advanced data analytics, and cloud-based architecture
- Delivers confidence with extremely high levels of statistical significance
- Provides results — not just insights — in days instead of months
- Uncovers unique, counterintuitive promotions that generate ROI and 10-25% sales lifts
Offer Innovation is based on insights from modern behavioral economists, who have discovered that consumers behave in surprising and counterintuitive ways.
Over the past few decades, Nobel-Prize-winning behavioral economist Daniel Kahneman and others have uncovered dozens of heuristics, or “rules of thumb,” that help explain why consumers make the decisions they do. Some well-known heuristics include information framing, loss aversion, naive diversification, anchoring and affinity — and there are many more.
The key is that consumers, driven by a variety of subconscious social, emotional, and cognitive biases, actually make decisions that are “predictably irrational,” a term coined by behavioral economist Dan Ariely. In other words, consumers make decisions based on more than just price. To understand what consumers truly want, testing is critical. That’s where Offer Innovation comes in.
A $300B Opportunity
Sources: Gartner; Nielsen
In a $300 billion industry where more than half of promotions lose money, retain a competitive advantage by producing unprecedentedly-effective trade promotions with Offer Innovation.
*Blue dots in the chart on the right represent examples of unique offer variations that result in “off-the-curve” promotions, delivering more sales lift vs. traditional offers at the same or lower discount level.
Eliminate risk. Confidently run new promotions with very little risk, knowing how they will perform ahead of time.
Make every dollar count. Get maximum ROI for each trade dollar by only running promotions that have been demonstrated to grow volume, trips, and basket size.
Get more. Grow your share of trade spend by delivering the best ROI for a manufacturer’s trade investment.
Uncover game-changing promotions. Put an end to stale promotion calendars by easily building and testing thousands of unique promotions to find the best ones, with absolutely no risk.
Exceed volume and ROI targets. Experience the impact of innovative promotions that outperform traditional offers by 20-50%.
Transform the retailer conversation. Bring retailers to the table with radically better promotions, demonstrated to work with real shoppers.