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Understanding the Incremental Impact of a Promotional Offer

The Company

A leading North American wireless provider

The Challenge

The client had offered a $150 discount to new customers signing a post-paid contract. After trying this promotion in six test markets, management was having a difficult time understanding whether the promotion was drawing enough incremental customers to offset the discount.

The Solution

The client used APT’s Test & Learn™ software to measure the true incremental profit impact of the promotion. APT showed that the promotion led to a significant increase in activations overall. APT then drilled down to the customer level and determined that almost all of the increase was coming from sub-prime customers. For prime customers, there were barely any incremental activations, indicating that the client was simply giving away money to customers who would have signed a contract anyway. APT also identified that the program was most successful in younger areas and in stores with a specific operational structure.

APT used these drivers of performance to build a predictive model to target a rollout of the promotion to markets that were scientifically predicted to respond positively.

The Results

Recommendations generated by APT’s Test & Learn™ software doubled the ROI of the promotion.
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