Do you believe in multi-channel synergies? Do you allocate each purchase from an existing customer to a single promotion? Make up your mind because you can’t have it both ways! Allocating to a single promotion for existing customers makes no sense if you believe in multi-channel synergies. Besides, it’s a fool’s mission because of:
- Promotional Cannibalization – Source codes significantly overstate the effect of some promotions such as email, and understate others.
- Baseline Revenue – A significant amount of revenue would occur even in the absence of direct marketing promotions. It can be 85% or more for some customers, and 15% or less for others. Baseline revenue is caused by factors such as the “drive-by” promotional value of e-commerce sites, the “boots on the ground” efforts of field sales, inbound and outbound telemarketing, brick-and-mortar retail stores, and walk-in distribution centers. Other contributors include brand loyalty, Internet promotional media such as display ads, and paid and natural search.
The trick is to calculate the incremental revenue and profit from a stream of multi-channel promotions. We have a five-step process to do just that. Intrigued? Check out Why Your Data-Driven Marketing Might be Off-Target. And, give us a call! Contact us