the 3-stage sales promotion strategy blueprint for top

The 3-Stage Sales Promotion Strategy Blueprint For Top Retailers 1

The 3-Stage

Sales Promotion

Strategy Blueprint

For Top Retailers

The 3-Stage Sales Promotion Strategy Blueprint For Top Retailers

Introduction

With the eCommerce retail market saturation at an all-time high and economic downturns still up in the air, brands and

marketing and digital managers must be highly strategic with promotional campaigns.

It’s vital that you use micro-promotions to stand out from your biggest competitors in a volatile, price-competitive market

without sacrificing brand identity, quality, and long-term growth.

To assist top-tier eCommerce marketers and online retail owners, we have created the optimum eCommerce sales

promotion blueprint, taking you through the three critical stages of ensuring campaign success.

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The Three Stages of Building an Optimized eCommerce Promotion Foundation Framework Competitive Edge

1 2 3


Table of Contents

3

Stage 3

Promotions: A Tool for Gaining Competitive Advantage Segmentation, personalization, and profit control + a pro tip …………………………………………………...……..31-38

Stage 1 Laying Down a Strong Foundation for Promotional Revenue GrowthBrand identity…………………………………………………………………. 06Profit and margin goals…………………………………………………....07 Promotional KPIs…………………………………………………….……….10Shopping experience…………………………………………………...…...14Inventory forecasting & promotions ………………………………15

Stage 2 Establishing the Framework for Your Promotional Strategy Promotional customer journey triggers……………………....….20Personalization and Customer Intent ………………………..…...24Personalization from the first contact……………………….…....26Promotional fatigue counter-strategies…………………...……..28

The 3-Stage Sales Promotion Strategy Blueprint For Top RetailersThe 3-Stage Sales Promotion Strategy Blueprint For Top Retailers

Stage 1: Laying Down a Strong Foundation for Promotional Revenue Growth

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Laying Down a Strong Foundation for Promotional Revenue Growth

5

The best place to start when creating and implementing a

highly-converting sale promotion strategy is with a solid

foundation.

This means assessing the market landscape and industry

trends, reviewing your company’s promotional metrics,

profits and margin benchmarks, and your overall

merchandising inventory and limitations.

Every step should line up with establishing a strong

brand identity that drives long-term growth.

Brand identity

Profit and margin goals

Promotional KPIs

Shopping experience

Inventory Forecasting

A

An excellent promotional strategy foundation assesses:

B

C

D

E

Stage 1 - Foundation


A. Brand Identity

6

Brand equity is the number one currency your eCommerce retail store has to

not only differentiate itself from the competition but to drive constant revenue

growth.

Brand equity and identity play a crucial role in promotional profit - the more

favorably a potential shopper sees your brand, the more they are willing to pay,

and therefore the smaller your promotional discount needs to be.

A prime example of this in action is the brand Supreme, where customers are

willing to pay $1,300 for a jacket that retails at other stores for $300.

Their strategy has been about establishing a niche brand identity that’s centered

around exclusivity, resulting in record-time sold-out products, $500 million in

online sales alone, and the establishment of a whole new market: Supreme resells.

The definitive goal with a promotion strategy is to increase sales volumes without diminishing profits.

Finding a harmonious balance

between the two is impossible

without investing in your

brand identity.


https://www.businessinsider.com/supreme-fashion-brand-so-expensive-viral-skateboarding-2019-5#:~:text=When%20you%20look%20at%20the,to%20%24138%20for%20a%20sweatshirt.

https://www.barrons.com/articles/supreme-streetwear-brand-sold-to-vf-in-2-1-billion-deal-51604953762


Implementing a well planned-out promotional strategy will ultimately:

Increase conversion rates

Streamline your shoppers’ customer journey

Optimize your overall site engagement.

However, it’s a balancing act.

B. Profit and Margin Goals

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Find the exact price discount that turns buying intent into a sale without compromising

your profit margins.


You need to ensure you are maximizing your budgets to get the most

revenue for your spend while still being highly in-tune with price

sensitivity.

To do that, first set your profit/margin benchmarks by completing a cost

analysis. You will also want to consider MSRPs (manufacturer

suggested retail prices) and MAPs (minimum advertised prices) if

you’re selling name-brand items.


Influenced by production expenses, customers’

bargaining power, and demand status, niche pricing

models such as MSRP can be limiting.

Deviate from them too much, and you run the risk

of losing manufacturers. However, with the right

fine-tuning, you can stay within your MSRP range

while still offering small incentives.

The key is tapping into intent to find the smallest

incentive a shopper will accept to complete a sale

while positioning your brand around quality.

8

Usually set by big brand-name products, MAPs can be

limiting when running bigger promotions as they restrict

your online advertising price.

Although there are checkout loopholes for online

retailers specifically, with the FTC has declaring that

carts don’t technically fall under advertising, cart

promotions could be bypassed. However, the risk of the

manufacturer pulling products from your brand and all

the negative brand image that comes with that, is not

worth it.

Therefore, despite MAPs meaning less wiggle room like

MSRPs, understanding shoppers' buying intent and

brand image will help you set incentives closely within

these parameters while still generating conversions.

MAPs: MSRPs:


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If you have MSRPs and MAPs in place, you’ll have less leeway when setting

your minimum profit goals per product. But the overall premise is the same

for any significant eCommerce retailer:

When you compromise too much on profit in the hopes that your brand will

make up the earning shortfall with sales volume, you are heading for big

revenue losses while tarnishing your brand.

If you want to drive sales and profit with your promotion strategy, take a

margin-driven view and focus on small increments until you reach the

maximum asking price (and margin) possible for the sale, mitigating any

profit loss.

Drill down your minimum promotional margins on each product, category,

audience segment, and campaign. Current solutions will automatically offer

the minimum promotion to your shoppers.

9

When you compromise too much on profit in the hopes that your brand will make up the earning shortfall with sales volume, you are heading for big revenue losses while tarnishing your brand.




C. Promotional KPI Goals

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The next step is taking a deep dive into your current data and

defining your promotional KPIs.

This will help you get a clear idea of where you are at and what your

goals are, enabling you to more accurately track your promotional

lift, while tweaking and optimizing your promotions along the way.

This ensures you build long-term success and that optimum ROAs

are met.

Here are the seven top KPIs for gauging promotional success and

how they can be used to drive your strategy:

7 KPI's for Gauging Promotional Success

1. CVRs

2. Engaged CVRs

3. Cart CVRs

4. Time to Purchase

5. AOVs

6. RPVs

7. Promotional Lift




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1.CVRsConversion rates are the most obvious metric for

gauging the success of your promotions.

2. Engaged CVRs This is the rate at which customers engaged with your promotion

and are then converted. This metric only accounts for

promotion-related transactions and can be very telling. It

separates your overall store conversion rates from the

promotional CVRs.

Benchmark:

2-5% of CVR increases on implementing an

optimized promotional strategy.Benchmark: 10-15% of engaged CVR increases on

implementing an optimized promotional strategy.

By comparing your pre and post-promotion

CVRs for a product or category you can quickly

determine your promotion performance based

on total traffic. Work out the percentage change between the CVRs and the

engaged CVRs - a dramatic difference between them shows a

highly promotion-sensitive audience.



3. Cart CVRs Measure cart conversion rates before,

during, and after promotional campaigns.

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4. Time to PurchaseThe measure of how long it takes a

potential shopper to turn into a customer -

before, after, and during promotion

campaigns

5. AOVsThe aim of most promotions is to convert at the highest price possible. Don’t assume that your AOVs for a product would naturally be lower for a promotion.

Benchmark:

5-10% cart CVR increases on

implementing an optimized

promotional strategy.

Determine your total order numbers to

better differentiate the number of

shopping carts initiated during your

promotion campaigns.

Benchmark:

40-45% Time to Purchase

decreases on implementing an

optimized promotional strategy.

With real-time onsite promotions, you

could strategically decrease

time-to-purchase metrics, which in turn

reduces the amount of time spent per sale

- and, as we witness, translates to better

ROAs.

Benchmark: 8-10% AOV

increases on implementing an

optimized promotional strategy.

Current intent-based solutions predict

purchase considerations and buying

propensity for each shopper and offer exactly

what they need just when they needs it. This

encourages shoppers to buy more than they

had planned to, thus increasing AOVs.



If your conversion-to-cart has increased

and your cart CVRs are not improving, it

can point to a cart UX issue.



6. RPVs

If 10,000 potential shoppers visited your store last month and 500 bought,

your conversion rate would be 5%, without taking into account the conversion

amount for each shopper.

RPV (Revenue Per Visitor) combines CVRs and AOVs (which doesn’t take into

consideration the number of visitors) to get a clearer picture of the overall

health of your eCommerce store.

Calculation: Divide your total site visitors by the total revenue for the same

period, putting a dollar value on each store site visitor. Increased RPVs are a

sign of good brand health and the measure of the success of ongoing onsite

promotions.

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7. Promotional Lift

Promotional lift is the increase in attributed

traffic or sales resulting from promotions

and involves measuring the change before

and after various promotions.

If you’re already running onsite promotions

such as free-shipping incentives, run test

pages without the promotion to get an

accurate picture of this, working backward

to estimate the lift of that campaign. The

formula is as follows:

Benchmark: 3-8% RPV increases on implementing an optimized promotional strategy.

Sales / Traffic Increase = (New Number – Original Number)

÷ Original Number × 100




The best place to start when looking to improve your

brand’s shopping experience is to review your

customer lifetime value.

64% of brands consider LTVs to be the best

measurement of customer experience[*], so

improving for lifetime value will help ensure your

journey is optimized from beginning to end.

The best way to optimize for LTVs is to target every

stage of the buying cycle (more on that in stage 2).

14

D. Shopping Experience


https://econsultancy.com/blog/64724-15-ways-for-companies-to-increase-customer-lifetime-value/


E. Inventory Forecasting and Promotional Merchandising

The last step in laying down a good foundation for a successful

promotional strategy is ensuring that you have enough

merchandise to satisfy all your customers’ needs throughout

the year.

On the other hand your promotion strategy should help you

battle stock overflow.

The two strategies should work seamlessly together to

mitigate stock overflow and uncertainty risks.

Follow these steps to lay the foundation for efficient inventory

planning and promotional forecasting:

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Note: A well-optimized promotion strategy should be able to push excess inventory throughout the year to

shoppers who are more likely to purchase these items.


It can be particularly troublesome

when planning inventory for a

trending product promotion or

changing seasons. The best way to

lesson these inventory uncertainties

is by using seasonal forecasting

models.

Assess the product’s life cycle,

the length of the season, and

the purchase lead time. The

latter will give you a timeline

for promotions and

restocking, based on when

purchasing decisions usually

have to be made.

Once you’ve categorized the

products you need an inventory

model to account for their lead times

and seasonal demands.

This will ensure you have planned

orders in advance based on sale

projections, while also accounting for

stock replenishment contingencies.

Step 1:

Identify Promotional Products

Step 2:

Review Inventory Model’s Efficiency

Step 3:

Optimize With Forecasting



Inventory Forecasting Model

Demand & Performance Analysis• Last season/promotion total volume

• Last year’s total revenue

• % demand changes

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Additional Factors• Marketing activities

• Industry forecasts

• Market trends

Calculations• Best case scenario

• Worst case scenario

1 2 3


The 3-Stage Sales Promotion Strategy Blueprint For Top RetailersThe 3-Stage Sales Promotion Strategy Blueprint For Top Retailers 18

Stage 2: Establishing the Framework for Your Promotional Strategy


Stage 2:Establishing the Framework for Your Promotional Strategy

Just like building a house, the foundation laid out

above will ensure you have a solid base to build on.

Now it’s time to build the the supporting elements to

ensure your promotional strategy is created for

maximum ROA potential.

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A good promotional strategy framework sets:

Promotional customer journey triggers

Customer intent targeting

Personalization from the first contact

Promotional fatigue counter-strategies

A

B

C

D

Stage 2 - Framework


A. Promotional Customer Journey Triggers

● It’s not just about when, but where you place a promotion, which can

determine your strategy’s success. Different types of promotions will

perform better at different buying stages.

● It’s not just about finding the optimum promotion or discount amount,

but what type you’re using and where they are exposed.

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Place promotion triggers at key points on your customer

journey to line up with personalized behavior and

buying intent. Then, ensure the

promotion itself matches the

customers’ preferences.

However, there are many more variables to consider as a shopper’s journey continues, and triggering promotions to match

where they are on that journey will dramatically improve your conversion chances.

This becomes even more vital when you’re trying to personalize marketing across a variety of channels.

For example, it’s common for eCommerce retailers to include one or two in-store

promotions for first-time visitors - often in the form of a welcome pop-up that

offers new shoppers a discount and requires email sign-up or social following.

Stage 2 - Framework


Awareness stage(first-time visitors)

Consideration stage

(potential shoppers)

Promotions Based on Customer Journey Touchpoints

Retention stage(existing customers)

% Off

Timer

Free Shipping

Gift

Free

Returns

Here are just a few promotion types you can test at various customer journey points.

Stage 2 - Framework


Promotions Based on Customer Journey Touchpoints: A Comprehensive List

22

Consideration stage(potential shoppers)

1. Cart abandonment promotions

2. Contests

3. Bundled offers

4. Flash sales

5. Free returns

6. BOGO deals

7. Time-sensitive discounts

8. Behavior-based personalized

offers

Awareness stage(first-time visitors)

1. Threshold promotions (‘Spend

X, get Y’; or ‘Do X, get Y’)

2. Free shipping promotions

3. Special person discounts

(seniors, college students, first

responders, etc.)

4. First-time shopper promotions

5. Discounts for social follows

6. Discounts for email signups

Retention stage(existing customers)

1. VIP point-based rewards

2. Replenishment promotions

3. Upsell offers

4. New product launches

5. Frequent customer specials

6. End-of-season sales

7. Discounts for surveys

Stage 2 - Framework


Be selective with the number of promotions triggered to potential customers.

Too many promotions without clear reasoning will diminish the promotions’ effect entirely - giving the impression that they are fake or the brand is charging too much to begin with.

Promotion fatigue can do a lot of irreparable damage to

brand equity.

Stage 2 - Framework


B. Personalization and Customer Intent Targeting

To personalize your marketing and messaging you have

to tap into your shoppers’ behavior and intent. When it

comes to sales promotion strategies, this is even more

imperative.

You should be going beyond your traffic, converted

customers, and target shopper metrics to make sure

you know your customers and potential customers

preferences inside and out.

This is vitally important if you want to sustain long-term

growth and loyalty.

24

There is a place for site-wide promotions such as

seasonal offers, but by no means it should be your main

focus.

Personalized incentives can increase cart conversion rates by as much as 5-10% and decrease cart abandonment rates by 20%.

For those not yet using intent-based promotional

triggers, here are the minimum traditional

segmentation strategies you should be using to

personalize your overall shopping experience.

Stage 2 - Framework

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Traditional Promotional Target Audience Segments

Customer Profile:First-time visitors, VIP shoppers,

frequent buyers.

Audience Demographics:Location, age, income, etc.

Ideal for personalized

seasonal products.

Store Interactions: Product selection, checkout,

add-to-cart engagement.

AOVs:Promoting products based on AOVs

to ensure they are within customers

price point.

Visitor Type:New or returning visitors,

potential customers versus

previous shoppers.

Traffic Sources:Organic search, campaigns,

referrals.

Engagement Duration & Frequency: Grouping customers who visited a certain

date, by the amount of time they spent

onsite or segmenting by the amount of

times they visited in a certain time frame.

Type of Content Viewed & Interaction: Product searches in categories, or

segmenting visitors from those who viewed

the “sale” vs. “New” pages.

Off-site data sources: Email addresses, birthday dates,

live occasions, or internal sales

data.

Stage 2 - Framework


C. Personalization From the First Contact

As more and more consumers have shifted their purchases

online, the challenge to personalize content to this type of

audience became more significant.

The more personalized you can make your first impression, the more likely you are to convert on the

first visit or on the following ones.

Basing promotions on customers’ intent allows for

comprehensive personalization even from a customer’s first

contact with your store.

26

Stage 2 - Framework


The race for top AI personalization is now in full swing,

with top retailers are investing heavily in

personalization tools this year.

In order to compete, you’ll need to upgrade how you

look at promotion personalization and invest in the

latest tech.

27

Intent-Based Promotions

as an example, enables you to personalize for

first-time shoppers according to each

shopper’s intent and propensity, in real-time,

and to the following data signals: device,

referring sources, behavior analysis of unique

network, intent, and more.

Stage 2 - Framework



D. Promotional Fatigue Counter-Strategies

No matter how much legwork you put into ensuring you are targeting the

right shopper with the right promotional trigger at the right time, for

promotions to actually work - your shoppers need to feel special.

Shoppers need to think that the promotion is a great deal they can’t pass up

and perceive it as exclusive. Too many on- and off-site promotions will lead to

overlapping.

Not only will this cost you profit, but result in promotional fatigue, which renders promotions ineffective.

The simplest way to combat this is by going back to basics with ‘less is more.’

Where possible, use big data and optimized triggers to ensure you are not

bombarding shoppers with too many offers. Alternatively, stick to a smaller

but more segmented promotional strategy.

28

Don’t offer promotions to audiences that are not likely to purchase.

Prioritize specific promotions at certain stages - don’t mix.

Tailor specific campaigns to specific customers.

Invest in intuitive targeting and segmentation.

Four ways you can prevent promotional fatigue

1

2

3

4

Stage 2 - Framework

The 3-Stage Sales Promotion Strategy Blueprint For Top RetailersThe 3-Stage Sales Promotion Strategy Blueprint For Top Retailers 29

Stage 3: Promotions as a Tool For Gaining Competitive Advantage


Real-time intent targeting

Journey abandonmentprevention tactics

Long-term customer loyalty strategies

Gain a competitive advantage while building brand loyalty

These elite features will:

● Separate your promotional strategy from your

biggest competitors

● Help you regain brand reputation and equity.

Stage 3 - Competitive Edge


1. Use Real-Time Buying Intent Data to Maximize ROAS

One of the most critical elements you can add to your

promotion strategy is real-time optimization according

to intent signals prediction.

Intent-based strategies personalize promotion offerings

in real-time to find the lowest promotional point a

consumer will buy at. This constantly drives the discount

percentage down, while increasing overall profitability

and margins.

31W

illin

gnes

s to

pay

Customer A Customer B Customer C

Lost Profit

Lost Sales

Unified Promotions



Intent-based strategies are what enables leading

online retailers to optimize and personalize their

stores and marketing campaigns to target people at

various strategic touch-points.

It enables them to target the right shopper, with the

right discount, at that exact moment when they need

that extra push.

Benchmark: 100%+ ROAS increases on implementing an optimized promotional strategy.



2. Spot Weaknesses and Prevent Journey Abandonment

Another crucial step to gain promotion superiority is

making a plan to combat journey abandonment.

Intent-triggered promotions offer retailers the

opportunity to prevent cart abandonment - increasing

cart conversion rates by 10% - and are well worth testing.

33

Cart ConversionRates Uplift

10%



Four Ways to Reduce Journey Abandonment

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Make navigation seamless

Establish trust

with brand

narration

Be upfrontwith pricing and

full costs

before checkout

Push final purchaseswith strategic,

personalized promotions



Customer Journey Hijacking is where consumers’ browsers

are targeted with unauthorized product ads that divert them

to a brand’s competitor sites, damaging KPI’s and brand

reputation.

Customer journey hijacking is snowballing out of control.

Even the most well-optimized stores are experiencing

increased journey abandonment, with as much as 20% of

their potential shoppers being snatched from brands.

Luckily, there is an easy fix which that can increase CVRs by

up to 5%. Use this Stolen Revenue Calculator to see where

your brand stands.

35

Bonus Tip:Customer Journey Hijacking Prevention

Stage 3Stage 3 - Competitive Edge

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How to Use Customer Experienceto Build Long-Term Loyalty

3. Set the Stage for Long-Term Customer Loyalty

It’s not just about loyalty plans; customer loyalty should

be a significant consideration at every touchpoint of your

shoppers’ journey and a massive driving force for your

promotional strategy.

36

1. Upgrade customer service to go beyond

expectations.

2. Personalize your after-sale service and

product pack-ins.

3. Offer rewards for reviews and feedback.

4. Meet expectations and instill credibility with

clear promotion and store guidelines.

5. Reward loyalty with personalized

promotions.



Say Goodbye to Rule-Based and Site-Wide Incentives

More and more consumers expect personalization in

their online shopping experience. Tapping into their

intent is going to be vital for long-term growth and

surpassing market dominance goals in your niche.

Traditional promotional strategies that rely on

rule-based, site-wide incentives no longer signal to

potential shoppers that a brand understands their needs

and can anticipate them.

37



Schedule a demo today

How Intent-Based Promotions Can Boost CVRs, RPVs, and ROIs

Intent-Based Promotions offers top retailers a competitive

way to run personalized, buyer-intent-driven onsite

promotions.

By diving deep into intent signals and optimizing your

promotions on a visit-to-visit basis, you will be able to build

a data-driven promotion strategy that not only converts

better but does so at the optimum incentive amount to

increase profitability and protect brand equity.

20XROI

25%Reduction in

Promotion Costs

15%Increase in

Digital Revenue

15% LessJourney

Abandonment rate

38


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