Selective Pre-purchase Promotion. How to Offer Customer The Best Deal Before the Competition Does

by Loyalty Point
21.10.2022
Selective Pre-purchase Promotion. How to Offer Customer The Best Deal Before the Competition Does
by Loyalty Point

Gone are the days when companies would send one and the same message to their entire customer base, hoping that at least some of the recipients would read it and eagerly rush to the store to shopping. In today’s advertising-saturated world, even the sophisticated segmentation of consumer groups that is already commonplace is proving insufficient. How, in the age of widespread spam, to increase the chance of influencing a purchase decision? The next step in the battle for customer retention is selective pre-purchase promotion, i.e. a unique offer that, fitting the needs of a single customer, will close the purchase process.

How close to purchase is the customer?

The data that a company meticulously collects about customers is actually knowledge about their preferences, dreams, current stage of life, and upcoming changes. How a customer navigates a website, how intensively he clicks on mailings, how he uses a mobile app, what products he looks at or how often he visits a stationary store says more about him than you might think. The tools that are now available on the market allow us to turn this information, into valuable clues as to what kind of offer he should receive.

If we identify the customer’s needs, we should take the next step, which is to make it in our store that the customer will realize his plans. Personalization is no longer just a tailored mailing style, but a selective promotion that we will offer to a consumer interested in the assortment.

How to use data and increase sales by 50%?

We shift the burden of communication to precisely targeted pre-purchase activities. This means that with an offer we do not spam the entire customer base, but with the help of machine learning methods we select those whose behavior indicates interest in a given assortment. When scoring models indicate that a customer’s path of movement in the online store, and particular interactions, match the created pattern, we send such a person a special, dedicated offer, not generally available, which will convince him to place an order.

At Loyalty Point, we implement selective pre-purchase promotion systematically for the companies we work with. By narrowing down the target group and conducting contextual communication, the company can, on the one hand, reduce the cost of the promotional action, and on the other hand, enjoy high results from the effectiveness of the action.

Selective pre-purchase promotion – details

During one campaign, in order to measure the effectiveness of the campaign, we excluded a control group from the group of customers potentially interested in buying from the communication. Using customer knowledge, we saw a 50% increase in sales of the promoted assortment in the group included in the pre-purchase communication. The offer made it possible not only to increase the number of transactions, but also their value, which was more than 40% higher under the pre-purchase communication compared to average purchases outside the offer. The results prove that such a communication strategy cannibalizes sales of the assortment outside the promotion to a small extent – sales of the product at the promotional price, significantly exceed and offset the results of selling the product at the regular price.

Machine learning models predict whether a user is interested in a particular assortment. If a customer clearly fits the pattern created, and yet does not make a purchase, the company gets a clear signal that the customer is likely to leave for a competitor. This is when it is necessary to implement a selective pre-purchase offer. By analyzing the data, the retailer knows when and how it should respond (e.g., by sending an email with engaging content). Knowing whether a consumer will return and what purchases he or she is likely to make within a certain period of time can help tailor the right marketing message and offer an offer that, in terms of price and image, the competition will not be able to beat.

Mail as a communication channel in itself is not bad. However, it is necessary to set it in the context of customer needs and behavior. Selective pre-purchase promotion sheds new light on the possibilities of using mailing. When the message is initiated by what the customer does, the chances of getting noticed increase significantly. The approach with building contextual, engaging communication is the realization of the idea of reverse loyalty, in which the brand listens to the consumer, tries to understand him better and inscribe its actions in his needs.

LOYALTY POINT is implementing a project with Contribution from European Funds. Learn more