Why Offer Management Should Be A Core Part of Retail Strategies
As long as offer campaigns have been around, industry experts have listed off their coupon fears: decreased margins, brand damage, and discount fraud. Those are the concerns for any business, but those fears are not unique to offers and coupons – they’re data and security issues.
An exclusive offer campaign is not what strikes fear in retail experts – what they truly fear is a poorly implemented campaign. Until recently, retailers didn’t have a way to safeguard against the many variables and potential errors. In other words, they didn’t have a way to effectively manage their offer campaigns.
Exclusive offers are a marketing tool and as we follow digital data through every other arm of our businesses, why should these offers be any different? For decades, the best data available to a retailer was the stack of coupons that wound up in their cash register at the end of the day or occasionally a trade magazine might publish a broad study about the psychological effects of marketing tactics.
Today, a digital offer management system utilizes vast banks of granular data to help retailers understand specific challenges and opportunities. And it couldn’t come at a better time: 62% of customers expect personalized discounts based on past purchases.
With an offer management system’s database and analysis, you can personalize, revise, and implement more precise offer campaigns in real time, thanks to AI and user-friendly tools that offer management systems provide.
There’s not much debate anymore about the importance of segmented marketing in retail. Studies consistently show that overwhelming majorities of customers want and expect personalized engagement with businesses. And we all experience it first-hand when we delete marketing emails without reading them, or scroll past ads in our social feeds that don’t quite speak to us.
With automation and A.I., an offer management system can ensure unique branded discount offers are surfaced to the right person at the right time across any marketing channel of engagement – email, search, social media, ads, even direct mail. While other marketing software systems manage the communication of the message to the right person, an offer management plays a complementary role ensuring the most optimal offer, including personalized discounts, is presented to the consumer.
One key piece of value of an offer management system is that it can manage offers distributed through individual consumer touchpoints, such that a marketer doesn’t need to set up the same offer multiple times in different systems, or worry that consumers will see different offers in different places due to poor orchestration.
Furthermore, more advanced systems can take on the role of selecting the optimal offer for each customer based on a preset pool of offers available for distribution and available behavioral data within the offer management system and client databases.
One example: in a recent case study with a major corporate client who had been offering an exclusive $5 discount to a segmented demographic. With offer-value testing, AI tool effectively determined that an offer of $3.50 was the point of diminishing returns.
The reduced offer was equally effective, and possibly more effective, in generating sales. When implemented, this $1.50 reduction on each redeemed offer also saved the company $850,000.
Those individual redemptions add up. As the retail landscape gets more competitive, and customers become more savvy, they’re also deal-driven: 81% say that finding a discount is on their mind through the entire purchase cycle.
You only want your targeted audience receiving and redeeming offers. An Offer Management system provides easily implemented tools to protect against fraud.
On the front end, you might choose single-use links for discounts, individualized barcodes, or coupon print limits. On the back end, a management system can provide predictive fraud alerts based on individual behavior, IP address verification, and more. And once a secure, targeted campaign is underway, you must ask: What’s working?
What’s not? Which platforms are yielding the most follow-through?
How exactly is it helping my bottom line?
Real answers require real data, which a management system collects data every step of the way. It tracks not only the marketing materials but each customer’s path to purchase.
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By documenting the micro-moments of a person’s journey from their social media feed to the offer ad, to some follow-up research in a web browser, and on through the purchase, you have granular market data like never before.
A management system should provide customizable analysis tools and summaries. It should also integrate with your other marketing management systems, like Salesforce, to build out your database and get comprehensive analysis moving forward.
So, every campaign is implemented in a controlled, efficient, and consistent way. Each new campaign is better than the one that came before, building continuously on insights from your database, it’s a database that you own.
When you implement your own management system, you’re not only saving money, you’re generating an entirely new asset: granular 1st party behavioral data. So, offer management is not only essential for maximizing retail revenue and profit margin today. It’s an investment in your opportunities for tomorrow.