James Wellbeloved wanted to understand what level of discounting produced the best CPA and ROI, for their inserts campaign, in a heavily discounted competitive marketplace. While they were hesitant to offer too much of a discount, reducing net revenue and decreasing the brand’s premium quality, this had to be balanced with driving sufficient response.
Join the Dots implemented an A/B split test, putting a 20% off and 30% off discounting incentive head to head, across a range of programmes. This meant that it gave us a scientifically valid understanding of how the level of discounting impacts the CPA and ROI.
The results showed that, despite offering a higher monetary discount, the 30% off achieved a greater ROI and reduced CPA. The superior response rate that was driven by the higher discount, meant that there was substantially greater take up for the 30% off than the 20% off discount.
James Wellbeloved now know that the 30% off discounting incentive is the optimum offer, which allows them to drive a high response and make a good profit, despite having to discount by an additional 10%. This means that distribution programmes and creative formats can be robustly tested, to further optimise the campaigns, without the need to test the discounting again.