October 17, 2023

Optimizing a promotional leaflet distribution strategy

The main goals were to increase store traffic and conversion rates.

Optimizing a promotional leaflet distribution strategy

At a glance

Challenge

In the digital era, the effectiveness of promotional leaflets is questioned, prompting our retail client to rethink their distribution strategy. The main objectives were to boost store traffic and conversion rates while staying within a constrained budget, limiting the number of leaflets and distribution zones.

Solution

The process began with understanding customer segments through pilot testing to determine which responded best to printed leaflets. A control group, who did not receive leaflets, was established for comparison in each distribution cycle. Using a predictive model, similar characteristics from test and control groups were benchmarked to identify the most responsive customers. The impact estimations from this model were integrated into an optimization model to define the optimal distribution zones and leaflet quantities.

Results

The project transformed decision-making from an empirical approach to a data-driven process, allowing the client to quantify and understand the impact of targeted promotional activities. This led to increased sales and optimized ad spend, while reducing unnecessary resource usage. With the same budget, the client achieved a 14-cent return for every euro invested. The model was internalized, fostering autonomy and long-term value creation.

Challenge

In the digital era, the effectiveness of promotional leaflets is questioned, prompting our retail client to rethink their distribution strategy. The main objectives were to boost store traffic and conversion rates while staying within a constrained budget, limiting the number of leaflets and distribution zones.

Approach

Solution

The process began with understanding customer segments through pilot testing to determine which responded best to printed leaflets. A control group, who did not receive leaflets, was established for comparison in each distribution cycle. Using a predictive model, similar characteristics from test and control groups were benchmarked to identify the most responsive customers. The impact estimations from this model were integrated into an optimization model to define the optimal distribution zones and leaflet quantities.

Results

The project transformed decision-making from an empirical approach to a data-driven process, allowing the client to quantify and understand the impact of targeted promotional activities. This led to increased sales and optimized ad spend, while reducing unnecessary resource usage. With the same budget, the client achieved a 14-cent return for every euro invested. The model was internalized, fostering autonomy and long-term value creation.

Our
AI-generated
summary

Our AI-generated summary

Our AI-generated summary

In the era of digitalization, one might wonder if promotional activities based on printed leaflets possess the impact they had in the past or whether there are customers more prone to be responsive to this type of engagement.

Accordingly, our client, a retail company, was seeking help to redefine its promotional leaflet distribution strategy.

The main goals were to increase store traffic and conversion rates while maintaining the current budget spending which limits both the leaflet number and distribution zones.

The first step was to understand, at the customer level, which segments reacted best to the printed leaflet distribution through pilot testing. To assess the impact of the distribution strategy, a control group, who did not receive a leaflet was established in every distribution cycle.

Then, our predictive model benchmarks people with similar characteristics from the test and control groups to quantify which are the customers more sensitive this type of contact.

The impact estimations were incorporated in an optimization model to determine the ideal zones and leaflet number to be distributed.

Our AI-generated summary

Our AI-generated summary

By evolving decision-making from a purely empirical and static standpoint to a data-driven process, our client can quantify and understand the effects of targeted promotional activity on different receivers.

The project reaped benefits by maximizing positive customer engagement with the leaflet leading to increased sales and optimized advertisement costs, while minimizing unnecessary resource usage.

Keeping the same budget, we were able to obtain an additional return of 14 cents for each euro invested.

The implemented model was internalized at the client, enabling autonomy from the team and allowing the creation of long-term value.

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