Use Promo Codes to Build Business Intelligence
ProFlowers.com recently aired a TV commercial offering a discount for flowers purchased for Valentine’s Day. By entering the keyword “male,” customers were entitled to a discount.
Marketers run these kinds of promotions to measure advertising effectiveness. They want to somehow tie the TV ad to demand. They generate profit and loss (P&L) statements, evaluate marketing effectiveness, determine the advertising budget for next year, and then move on.
Return on investment, however, is more than a P&L statement. ROI is a fluid series of what a customer does before an event, during an event and after an event.
In the ProFlowers.com example, the company will segment customers based on what they did in the past, especially what they purchased in the past. Then it'll analyze the merchandise that customers who used the word “male” purchased. Finally, ProFlowers.com should link these two activities to what customers do in the future.
This combination — past, present, future — yields a profile of customers who take advantage of specific promotions. Maybe they've only purchased roses, and only on Valentine’s Day for each of the last three years. Maybe they purchase a cross-section of merchandise across any time frame.
The secret to good business intelligence is mining information that can be used by merchandisers and marketers to improve business results. When merchants can visualize customers, and relate to customer behavior, they're able to provide and present merchandise that customers love.
Most companies maintain a table of promotional codes. Often, the table includes metadata about the promotion (event, offer, etc.). A solid business intelligence professional will also store information in the table about the type of customer who used the promotional code (new, existing, type of products previously purchased), as well as the long-term values of those customers. This data provides marketers insight into whether promotions truly work.
By combining merchandise and marketing intelligence in a table with promotion codes, future marketers and/or merchandisers can look back, understand how/why something worked and then offer a better promotion to customers in the future.