A global fast food chain was looking for ways to accelerate sales across various geographies. It used high-value discounts to attract more purchases, but knew it had to do this more prudently to increase profitability. What it required was deeper insights into customer purchase behaviors and patterns to effectively optimize its discounting strategy.
The restaurateur partnered with Netscribes to rationalize its discounting initiatives by which it could limit overheads and increase its margins.
Business Challenge
In an endeavor to boost sales, a leading pizza restaurant chain leveraged high-discount campaigns across a wide audience. Realizing the pros and cons of this marketing tactic, the client sought to optimize its discounting strategy to retain customer traction, keep their overall margins intact and increase profitability.
Solution
- Netscribes built a predictive model to drive informed discounting decisions. This was done by analyzing the purchase history and demographic details across the restaurateur’s entire customer database.
- The exercise gave the client an in-depth view of customers with a high-potential to transact over the next month. This in turn equipped them to categorize their discounting initiatives for better profitability.
Results Delivered
Netscribes designed a 3-tier selective discounting strategy for the restaurateur:
- Top tier: A pure nudge campaign devoid of any discounts for the top 15% customers with a high likelihood of ordering
- Middle tier: Low-to-moderate discounting schemes for 15% to 35% of the customers with an average chance of ordering.
- Bottom tier: Moderate-to-high discounts for 65% customers with a relatively low chance of ordering
Benefits
While the restaurant chain witnessed a 1.8% drop in overall sales, Netscribes helped them achieve a 21% reduction in discounting. This translated to:
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- • Better customer discount mapping
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- • Tighter profit margins improving ROI
- • Minimum discounting overheads
