One Blog |June 26, 2014 | POS Tracking Software
How OnTrak Applications Measure the Sales Impact of POS Promotions
One of our most popular blog topics has to do not just with the tracking features of our point-of-sale (POS) marketing technology applications, but with the measurement features provided in all of our products (SignTrak, PermaTrak, MenuTrak and SampleTrak).
During product demonstrations we show the output of our measurement report writer and query tool, and it is often when the results are displayed on-screen that our prospects seem to be most impressed.
How OnTrak Products Work
To be clear, our products collect dozens of data elements related to POS ordering, production and placements of POS promotions. Additionally, we collect data on when the promotional items (signs, menus, displays, etc.) were ordered and placed; who ordered and approved the materials; and what customers these materials went to — especially those items that have costs that can be submitted to suppliers and manufacturers for marketing cost recovery.
Our systems can produce ad hoc reports that can be configured as invoices to be submitted to suppliers and manufacturers to help in the recovery of marketing expenses.
We can import sales data from a period of time which coincides with a particular POS promotion’s display date. The customer, supplier, brand and sales information can be exchanged between OnTrak and your order management system and that information is used to trace the correlation between sales and POS marketing promotions.
Some OnTrak customers may choose to use a more robust reporting capability offered by business intelligence (BI) providers like Dimensional Insight’s Diver solution — while other companies are satisfied to use OnTrak’s “light-weight BI” query and reporting capability.
Calculating the Impact
Whatever route you choose to determine how you will measure, report and ultimately deploy your POS campaigns, you will be using a formula similar to the following:
Sales Impact of a POS Marketing Initiative = Base (or Prior Period) Demand + Incremental Demand Change During a Promotional Event
”Incremental Demand” can be either a positive or a negative number, see graphic, below:
The above example is for an established, well-recognized by consumer item that is not subject to seasonal demand variations.
We can see that there is an increase of 15% when there is a 2’ x 3’ sign presenting the customer with a lower price / “reason-to-buy” (BOGO)
An item or brand-specific floor sign (without a “reason-to-buy” message), on the other hand, apparently has the opposite impact — reducing sales by 5%. With our new prior period demand for August of 110, we see that even a (relatively small) shelf-strip promoting “buy-one get-one” (BOGO) positively impacts sales by 22%; while an end cap display, without “reason-to-buy” once again correlates to an incremental demand of negative 10%.
Armed with this kind of information, you will be able to determine what will most likely work to stimulate positive incremental demand.
Of course, to collect the data requires that you have both an Order Management System that creates and stores historical demand and a Marketing Technology Tool (OnTrak) that collects various data-elements from the ordering, production and placement of your point-of-sale promotional materials.
As noted, you may optionally want to employ an enterprise BI tool for the analysis and creation of the reports that you will use to effectively and efficiently mount your marketing campaigns to best effect.
Finally, it bears noting that in order to do analysis and measurement you must collect and retain historical demand data by product as well as POS promotional data.
Doing this without marketing technology, like that from OnTrak, makes such analysis and measurement very difficult if not impossible.
OnTrak’s suite of marketing technology tools were built with this purpose -- at-retail marketing analysis and measurement -- in mind.
If you’re looking for more than a POS ordering system, and what you really need is a POS Tracking and Measurement solution, please take a further look at OnTrak.
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