How do you determine the amount of an Xtra discount?

How do you determine the amount of an Xtra discount? Determining the right amount for an Xtra discount is very important. You don’t want to set them too low to avoid sponsoring your existing volumes too much, but you don’t want to set them too high either, otherwise no one will buy the action.

In this analysis, we give you more insights into the quantities per purchase and we also show you how you can evaluate the action afterwards. We do not analyze the height of the discounts here, but with your promotion plan included, you can evaluate which action gave which discount.

Case

The supplier wants to analyze his Xtra discounts. He has conducted 3 Xtra actions in the past year:

  • Vitality 7: discount of 33.34% from 3
  • Vitality 18: discount of 33.34% from 6
  • Vitality 24: discount of 35% from 4

What quantity is ideal?

How can we optimize our Xtra promotion?

Origin tables: in the ‘Receipt Analysis’ (available in Advanced Pack), select the products from your promotion.

From how many products?

In the first graph, we see per vitality how much a customer has purchased. In a non-promo period, most customers buy 1 or 2 units, a smaller part buys 3 packages. There are hardly any customers who buy more than 3 articles.

Without having the data from the promo sales, we would advise:

  • 1 or 2 units: will probably be a success, but with high costs due to sponsoring existing volumes
  • 3 units: you sponsor a bit but it may be worth it
  • from 4 units: with no sponsorship, be careful that it is not too high

What can we conclude after seeing the results:

  • From 3 has yielded the most extra customers and volumes
  • There is little difference between 4 and 6 units, both actions have yielded about the same volume in total sales.

Cross Selling and customer profile

Customers already mix a lot of different references outside the promo and continue to do this during the promo. Also in the customer profile, we notice little difference during the promo.

New customers

If we look at which action has the most new customers (not bought in the last 12 months), we see that from 3 also scores best here, in second place comes the from 4 action and finally the from 6.

Conclusion

The action from 3 has worked best here, both in total sales and in attracting new customers.

The action from 4 and from 6 have similar results in total sales, but the from 4 attracts slightly more new customers.