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Measuring Sales Lift from Groupon Promotions

The Challenge

With an opportunity to deploy a promotion through Groupon fast approaching, a national quick-service restaurant chain wanted to measure the impact of the offer on annual spend of eClub members. They asked:

  • What impact does Groupon have on average check size and guest frequency?
  • How can the incrementality of a promotion be measured, especially when distributed through a third party?

The Solution

In need of a quick solution for tracking promotions at the individual level regardless of distribution source or redemption method, the chain chose Fishbowl’s Promotions Manager. The solution was installed in 3 weeks (across the chain’s 700+ locations) to meet the deadline, and Promotions Manager produced trackable codes that could match each redemption of the Groupon offer to the individual member.
Leveraging Fishbowl’s Guest Analytics solution, an analysis of historical data of all transactions and eClub members—including those who redeemed the Groupon offer—isolated each member’s annual spend based on Groupon redemptions, visits, and incremental net sales and identified naturally occurring test and control groups to measure incrementality.

The Results

Fishbowl’s analysis determined the average annual spend of an eClub member to be $29.89. Controlling for time series trends such as eClub trends and seasonality, the average annual spend of the existing members group was $32.11, and the average annual spend of new members acquired via the Groupon promotion was $35.50, a 7.4% and 17.2% sales lift respectively. The analysis also revealed the predominant cause of the incremental lift to be a 31.8% increase in annual visits among members after redeeming the Groupon offer.

Groupon complete image

Fraud Prevention

Fishbowl’s Promotions Manager provided the client the additional benefit of fraud monitoring and prevention. Through Promotions Manager, 180,465 fraudulent redemptions were rejected at the Point of Sale, resulting in an estimated $2,111,441 of fraud avoidance.

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