Boston, MA – July 27, 2009 – The combination of a strong strategic focus built around a sound “platform” (i.e., the right categories, brand, products) is what leads to successful retail promotion campaigns, according to the strategic consulting firm L.E.K. Consulting.
In a recently published white paper, Retailers: Making Promotions Pay Their Way, the firm details how retailers can use promotions offensively to achieve more than just awareness and a short-term sales lift.
The best promotional campaigns use “right-to-left” thinking – pinpointing a specific goal for the campaign and working backwards to design all of its key elements. Instead of trying to accomplish too broad a set of objectives, the most successful campaigns begin with the desired result(s) and establish clear operating principles to ensure that they are achieve (see Figure 1, below, for examples).
Getting the “Platform” Correct
Choosing the right “platform” - be it a product category, brand, or simply a specific SKU - is critical. Retailers must have a thorough understanding of the role that an item plays in their stores.
Based on its experience, L.E.K. Consulting recommends that retailers answer the following questions before selecting the right “platform”:
- How does the item relate to the category?
- What does this promotional item say about our store?
- What kind of store does this item best serve?
- Product or price – which are you promoting? It is important not to over-promote when you have already created a reason to buy.
- Can promoting one item help sell other, higher-margin items?
1. What is the overall strategy the promotion is supporting and what specific goals should it achieve?
2. What is the best offer (e.g., price discount, “two for one,” etc.) for the promotion?
3. Where should we run the promotion – in all stores, in some stores, in some departments in some stores?
4. When, and how often, should we promote?
5. What is the best way to communicate the promotion? What is the right combination of media, shelf location, external signage, in-store displays, etc.?
6. How can we ensure the promotion generates a return? Is the minimum expected lift in sales realistic? Do we need vendor support? Are there longer-term metrics and if so, what are they?
7. How will we monitor performance so that we can refine and improve future promotions?
The firm also offers advice on how to evaluate previous promotional campaigns and measure their success.
Click to receive a copy of the L.E.K. white paper Retailers: Making Promotions Pay Their Way
To arrange an interview with one of the authors, please contact us at email@example.com
About L.E.K. Consulting
L.E.K. Consulting is a global strategy consulting firm that specializes in corporate strategy, transaction services, and performance improvement. Founded in 1983, L.E.K. currently employs over 900 professionals in 20 offices worldwide. Global clients include Fortune 500, FTSE 100, Eurotop 300, and many of the largest firms in Asia-Pacific. With a reputation for solving the most complex issues, L.E.K. collaborates with business leaders to accelerate the pace and precision of strategic decision-making. http://www.lek.com
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