Offset consumer uncertainty with a robust promotion strategy

| min read

The year 2023 is turning out to be a tough one for manufacturers and retailers. Your consumers are more frugal and customer touchpoints fewer than ever. However, smart promotions are one clear way to boost customer spending and accelerate a return to the shops…


Uncertainty is high, and consumers are planning to spend less. In our recent Unlocking growth in times of uncertainty study, we found that 28% of consumers are reducing their spending budget, especially for non-necessities from categories like Luxury, Entertainment, Home, and Leisure. A large number will also continue to reduce their shopping trips, reducing the number of customer touchpoints. Therefore, it has never been more important to engage consumers correctly when there is a touchpoint – and promotions are a powerful way to do this..

Incentivize consumers to start spending again!

Uncertainty has a lingering impact. Consumers will seek ways to lessen uncertainty, such as through frugal behavior and more diligent decision-making. When they visit a store but are hesitant about spending, the onus is then on the manufacturer/retailer to make use of this touchpoint and provide a strong incentive to purchase.

Here, promotions are a great tool to break down the barrier between buying products and conserving money: the consumer experiences the benefits of shopping while also accommodating their need to save.

However, before rushing to overload customers with promotions, you need to be smart.

If you engage in too many initiatives with too little impact, you run the risk of wasting money and destroying your brand. Just like the consumer, getting the highest return on your resources is paramount.

Five top questions and tips for better promotions

  1. What do you want to achieve with your promotions?

    Clearly define the specific goals for your promotion strategy upfront. Is the aim to increase sales revenues, shopper frequency, brand awareness, or customer acquisition?

    Top tip: You cannot ask for everything at the same time. Rank your promotional targets by priority, e.g., x is more important than y. Outlining these targets from the start is the only way to establish the relevant KPIs and evaluate whether your promotions are successful.

  2.  What do you want to promote and how?

    Make sure key elements like frequency, visibility, and discount level are in line with your goals. This should be at the heart of your promotion planning. What do you promote (which products?) Which mechanism do you use (simple price-off, loyalty discount, an add-on, or a multipack?) How often do you promote? Etc.

    Top tip: It’s important to not only consider a single promotion but its positioning in the overall promotion plan. How do all the promotions you are planning act together? Which overarching goals will they achieve?
  3. Are your promotions working?

    Monitor your promotional efforts and make sure they are paying off. How are they performing in isolation and in terms of the bigger picture? What are the forward buying effects? Are other products and categories cannibalized? What findings can be used for future promotion planning?

    Top tip: Defining the “baseline” can be a key challenge. A basic one-week promo for FMCG products followed by ten weeks of normal sales will be simpler than special deals for electronic products – but it’s still possible with the right expertise.
  4. Which promotions are destroying your value?

    If a promotion isn’t having the desired effect, then ditch it. Yes, there will always be reasons behind every promotion, but you need to be fast and furious when it comes to eliminating the ones that don’t live up to expectations.

    Top tip: Depending on the industry, around 20 to 30 percent of promotions can be classified as “bad”, i.e., clearly underperforming on target achievements such as ROI and volume uplift. Saving on those promotions can generate real cash for your business.
  1. Where can tools and technologies help?

    Make sure the right digital capabilities are in place. Do you have real-time and accurate data or are you trying to fill in the gaps? How granular do you need to go? Do you have the right capabilities for your traditional and digital channels?

    Top tip: You not only need systems – but also the right people to design, conduct, track and analyze your promotions. It requires a strategy, rules, and the joint efforts of Sales, Marketing and Finance.  

How we can help

If you already have a touchpoint with customers but need to attract and reactivate them into making a purchase, then promotions are one of your most important pillars.

At Simon-Kucher, we pride ourselves on being hands-on and results driven. We’re here to help you answer these questions so that your promotions pay off! Rather than apply a one-size-fits-all approach, we work with you to create a solution tailored to your business needs and those of your customers and shoppers.


Better promotion management can typically lead to a 10-20 percent increase in promotional ROI! Check out our recent case study here!

Or reach out directly to Bjoern Dahmen and Francesco Fiorese to start planning your most promising promotions yet!

Read more:

Unlocking growth in times of uncertainty

Power up the P&L: Trade terms that mitigate cost pressure

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