Client Story

A Surprise in Store

A turbo-charged coupon program
brings more
foot traffic to a major pharmacy chain.

The Challenge

A retail coupon strategy was losing effectiveness

For a major American retail pharmacy chain, point-of-sale coupons had always been a key part of its overall marketing efforts. The coupon program, internally developed, initially produced impressive results. But its performance had started to lag, with the coupons becoming much less effective in producing in-store traffic. The company decided to used improved data collection and modernized analysis to rejuvenate the effort.

Our Solution

Upgrade to retail marketing's best practices

Using state-of-the-art lift modeling techniques, we ran A-B tests that compared the performance of current coupon strategies against proposed alternatives. Many variables that might affect customer behavior were examined, including customer brand preferences and response rates to earlier promotions. Ultimately, the analysis produced a new coupon strategy that was predicted to significantly increase both overall in-store traffic and individual incremental purchases.

The Results

More customers and more sales

The new coupon strategy met all the expectations the company had for it. Incremental per-customer sales and profit was doubled, while the overall ROI from coupons quadrupled. And because the coupons were so finely targeted, the company was able to achieve those results while sending the offers to fewer than half the number of customers it had previously. Ultimately, the decision to modernize its coupons through the use of smart data analytics proved to be worth hundreds of millions of dollars.

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