The Bottom-Line Beauty of Delivering the Best Offer at the Right Time
Joanne Macdonald 060000M7FB firstname.lastname@example.org | | Tags:  bpm-retail business-process-manageme... brms-retail retail-promotions-optimiz... business-rules-management decision-management
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Not only am I an IBM’er working in the Retail sector, I’m also a busy consumer, and last weekend my two worlds collided when I entered my favorite beauty product store to pick up a bottle of shampoo.
First, I won the coupon lottery. Before going to the mall, I purchased and printed a coupon from a favored e-coupon site offering $40 of product for $20. While shopping at the store, a sales employee gave me another coupon that I could use at the register for a “surprise discount off my purchase today” which I soon learned was 30% off. At the register, I asked if I could use both coupons for this purchase. The clerk said that I might as well use both offers, and then asked for my birth date. Apparently, I was entitled to an additional 10% off my purchase because my birthday fell in the month – what a surprise! So she rang up my purchase with my $20 off e-coupon, my newly acquired 30% off coupon, plus my 10% off birthday bonus. I left the store wondering how the company could stay in business with this model and were they really supposed to give me all three offers at one time? Perhaps most of their customers don’t ask these questions.
Second, I wanted to stop that from happening again. Not that I didn’t enjoy paying substantially less for my shampoo, but from a business perspective I know about tools that can allow retailers to provide their line of business staff with quick and efficient access to the information they need to make better decisions – decisions that serve the best interest of the business and the customer. With the right technology, retailers can empower their staff to make informed decisions resulting in delivery of the right offer at the right time to customers. I may be jumping to conclusions, but judging from my experience, there didn’t seem to be rules in place, automated or otherwise, to recommend that I use one of my coupons at another time, perhaps when my favorite body lotion was going to be on sale, thus coaxing me back to the mall next month to make additional purchases. What I do know from my experience in the industry is that retailers usually benefit from empowering in-store staff with a predefined set of steps that enable them to discern which promotion to offer a particular customer on a particular day. And I arrived home convinced that this retailer would benefit from having an automated promotion planning process that would ensure that I, the customer, received consistent messaging around promotions and how to use them. Or maybe this seemingly random delivery of promotional offers was a scalable and effective approach and I was missing something. In any event, I hope they don’t go out of business as a result of offering too many promotions to consumers at one time – I really like their products!
Third, watch out for consumers more motivated than me. Sure, most consumers aren’t thinking about business process management or decision management – or the art and science of planning successful promotions – like those of us who do it for a living. But most of us would feel good about getting two or three discounts on one purchase and as a result would be keen to return in the future in hopes of similar promotional serendipity. These hopes then could be dashed depending upon the mood of the sales staff at the time – resulting in frustration. But what about the increasingly empowered mobile shopper, who is more motivated than me to save a buck and has the savvy to find all three promotions, plus some others maybe, in order to really work the system. See where I’m going with this: The management of promotions and loyalty programs shouldn’t be even remotely random today because chances are a competitor has defined the business process and incorporated the analytics and rules behind it, allowing them to merge customer insight within their promotions to out-decision you at the point-of-sale whether in-store or online and grab profitable customers away from the less prepared. Finally, although this is not my favorite shampoo retailer, their story is similar. This is a great example of what I’ve been talking about – European beauty care retailer a European beauty care retailer that incorporated rules-based decision making into their promotion and customer loyalty programs for a 20% lift in sales and increased customer and employee satisfaction. I hope my favorite Canadian beauty retailer sees this story and takes note!
For a deeper discussion on the value of business process management and rules-based decision making to retailers along with additional customer success stories, read this white paper.