Promotion Analytics
Promotion Effectiveness
Key Concept

Quantify sales uplift compared to a predicted baseline without promotion
Subtract discount to get net impact
Impact

Reduce discounts on promotions with negative net impact (discount > lift)

Use model to predict uplift of promotions with different mechanics
For example, BOGO vs 50% discount on Segment ABC

Use the prediction model to explore potential mechanics for new promotions
Mechanics Optimization
Key Concept
Impact

Narrow down promotion incentives to a small range for A/B Testing
Recommend optimized incentive range to maximize sales or profits
Depending on data, mechanics can be optimized for every level of business


Reduce overall budget with improved promotion outcomes
A/B Testing
Key Concept
Impact

Allow more members to receive the best promotions

Stronger decision-making supported by statistics

Apply inferential statistics to improve test reliability and minimize experiment size
Calculate statistical significance levels and adjust control groups to sample size to a minimum
Product Recommendation
Key Concept
Impact

Predict interest score for every customer x product combination
Separate models can be built for new products or customers with no data

Find top potential customers for product-specific promotions

Combine with churn prediction for personalized retention campaign
Category Decision Tree
Key Concept
Impact

Recategorize products using network analysis & clustering models
Grouping products with similar relationships together

Support in-store and in-app digital assortment layouts

Visualize category hierarchy that represents customer decision making
Visualize category hierarchy that represents customer decision-making

Improve other analytics that use product categories as an input (segmentation, CLV key drivers, etc.)
Cross-Sell Rules Mining
Key Concept
Impact

Quantify the relationship or “lift” between two products using apriori rules mining
Calculate lift, support, and confidence, and combine with chi-squared statistical tests

Identify bundling opportunities for products with high lift

Use as a feature for halo/cannibalization effect for promotion effectiveness