Project 01 / 03
The promotions were paying for themselves and nothing more
Spain's leading brewer — one of the country's top FMCG companies — ran discount coupons on its ordering platform for bars and restaurants. Sales and discounts moved together almost perfectly, so the programme looked like a success.
88%
correlation between sales and discounts
0
incremental return
- The trap
Correlation isn't causation.
Customers who would have ordered anyway also use the coupon — and a discount can simply pull forward an order that was coming next week.
- What I did
Bayesian Ridge over hundreds of thousands of orders.
Separating the first coupon order from the ones that followed, with different methods for percentage and fixed-amount coupons.
- What came out
Net return: indistinguishable from zero.
The first coupon order brought extra volume; the following orders gave it all back through cannibalisation. The programme was rescheduling sales, not creating them.
- Where it landed
An alternative plan, taken to the steering committee.
Five lifecycle segments with data-derived thresholds, a look-alike model to find offline customers worth acquiring, and an activation plan with its own success measure.
Correlation was 88%. Incremental return was zero.