How to Identify Right Shopper for Promotions / How to Categorize Shoppers based on Loyalty

Identify Profitable Shoppers using Statistical Modeling

Not all shoppers are profitable - the statement sounds bit confusing. But a careful analysis shows that there are some who buy only during Mark Downs, select low margin products in discounts etc. In the previous posts What are the steps in NBO (Next Best Offer) to give Personalized Promotion and Find Right Channel we get an idea of how to select a right product for promotion and what would be the appropriate time for sending the promotion/offer

Well before attaching an offer to the customer, one needs to select if the customer is profitable for the loyalty program

There are many methods to check if the customer is profitable. This is is based on the past transaction history and applying methods / models on them

CLV and NPV are some techniques to use in the current scenario. Segmentation of customers based on the above would provide a good insights

This is a challenge for many US Retailers whose customers enroll in multiple loyalty programs (Average US household enrolls to 23 loyalty programs) and hip hop to other retailer based on Sale/Discount. Price plays an important role in this

According to a study by +McKinsey on Marketing & Sales targeting High Value customers is one of the way to improve the Basket Size (both items and Value). One of every retailer's goal should be to Increase the Basket Size by appropriate promotions