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Assess In-Store Promotions: How to Measure Promotional Effectiveness

headshot of Jim Koppenhaven

Jim Koppenhaver is the Director of Enterprise Solutions and Product Manager for SPINS Store-Level Data.

In our fifth installment of an ongoing Expert Lens series, we take a closer look at ways Store Level Data helps you measure promotional effectiveness so you can get the results you need on a store-by-store basis.

Are Your In-Store Promotions Carried Out as Planned?

When you run a promotion, both you and your retail partners are anticipating higher sales volume that translates to higher dollars. Whether you’re promoting a product in a retailer’s ad, getting an in-store display, or temporarily reducing the price—or all 3—your net outcome should be mutually beneficial to you and retailers. If you temporarily reduce the price by 20% only to yield a 5% lift, you need to rethink your strategy before the next promotion runs.

SPINS Store Level Data lets you ensure your promotions are performing as planned and provides you with a granular view of your product performance at each retailer’s location and understand the KPI for promotional effectiveness. Dig into your sales data on a store-by-store basis to establish a baseline performance, calculate a promotion’s impact, and learn if the promotion was carried out as planned.

Establish a Baseline to Measure Against

Before you can gauge a promotion’s success you need to know what your baseline performance is. Use SLD to track product performance over a period of time that had no promotions to learn the volume you’re moving at each store on a regular basis. For example, SLD will show you that you sell 100 units at retail in a typical week. From then on, you know that 100 units are your baseline before you run any promotion.

Assess the Incremental Lift from a Promotion

When you do run a promotion, you’re focused on any deviation from the baseline to identify its success or failure. You want to see a lift, or positive growth, as a result of the promotion.

As a KPI for promotional effectiveness, you would consider the incremental lift compared to baseline movement. This is the sales lift for a product compared to its usual movement as a result of a promotion such as an in-store display, an ad in a promotional flyer, a price reduction, or some combination of all three. 

As an example of promotional effectiveness, if your 4-week promotion netted a weekly average of 120 units moved, then your lift was 20 cases above the baseline. However, you know that sales were likely not distributed uniformly across every location. That’s where SLD comes in. Looking at the store-level performance, you might discover this location had a 60% lift, that location another only saw 10%, and another saw no lift at all.

Have Informed Conversations With Retailers About Promotional Effectiveness and Compliance

Now that you have this information, what do you do with it?

First, you want to understand what it tells you about your retailer’s promotional execution. You can see whether they ran the promotions at the price point you agreed upon—and if they didn’t you will see it reflected in the sales lift (or lack thereof). Then you want to ensure your promotions were executed at all. If you agreed to promotion in an ad and a price reduction, but the sales figures appear way off from your expectations, then maybe they weren’t carried out properly or there’s another factor to explore.

Once you have the store level view of your promotional efforts, you can go even further in assessing the effectiveness of your overall promotional strategy with SPINS TradeROI. This tool helps you determine what additional increments will yield in your promotions and what the smartest promotional investment is for your dollars. TradeROI analyzes your promotions through a different lens so you can take your strategy to the next level.

Whether your findings from SLD suggest you have pain points to discuss or successes to replicate, you now have a single source of truth that you and your retailer can point to. Your conversations are that much better because you have the same data to consult as you plan ahead for future promotions.

Take In-Store Promotion Strategy to the Next Level

Once you have the store level view of your promotional efforts, you can go even further in assessing the effectiveness of your overall promotional strategy with SPINS TradeROI. This tool helps you determine what additional increments will yield in your promotions and what the smartest promotional investment is for your dollars. TradeROI analyzes your promotions through a different lens so you can take your strategy to the next level.

Whether your findings from SLD suggest you have pain points to discuss or successes to replicate, you now have a single source of truth that you and your retailer can point to. Your conversations are that much better because you have the same data to consult as you plan ahead for future promotions.

Contact us today to see how
Store Level Data can help you.

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