Discount campaigns can be a powerful tool in a marketeer’s arsenal, driving customer engagement and sales volumes while moving inventory. However, executing successful discount campaigns requires careful planning and precise forecasting to ensure the right balance between promotional offers, profitability, and supply chain effectiveness. In this post, we’re going to examine how you can use Sniffie’s forecasting module to plan effective discount campaigns.
What is Sniffie’s Forecasting Module?
Sniffie’s forecasting module uses advanced enforced learning AI to predict future sales by understanding the interaction between product demand, price, and product costs. It incorporates your sales history, seasonal patterns, and uses regression analysis to create a robust forecast, allowing you to compare different scenarios against the status quo.
How to Use Sniffie’s Forecasting Module
1. Select Your Product
Begin by choosing the product or products you wish to simulate and forecast. Use any filters to narrow down your selection. You can combine both static product filters and AI insights like Dynamic ABC Analysis.
2. Open the price simulator
After you have selected the products the blue top bar appears. Click on the forecasting icon on the top bar to open up the price simulator.
3. Adjust pricing, cost and stock
Adjust the price, the costs and modify the stock to see how changes impact your forecast. You have three distinct views to understand your forecast accuracy: Insights, Future Forecast, and Current Situation AI Insights.
- Insights: This tab shows how price changes will affect your profitability and sales volumes.
- Future Forecast: The future forecast gives a timeline of your profitability and sales volumes for a selected period, showing how they develop. The green line is the new scenario and blue line is the current scenario. The confidence interval is shown as the base colour around the line.
- Current Situation AI Insights: This section demonstrates how price elasticity can affect your sales volumes, revenue, and profit. It fits all the product elasticities into one and shows you how much a percentual change up or down will impact volume, profit and revenue.
Planning a Discount Campaign Using Sniffie’s Price Simulator
Once you’ve selected your products, it’s time to start planning your discount campaign.
1. Establish Preliminary Discount
Begin by setting a preliminary discount rate. Note how this affects your profitability. You can adjust the discount % up or down and see how your profitability and volume changes.
2. Adjust Discount Levels
Play around with different discount levels to observe how changes impact profitability and sales volumes. Especially important is to monitor how the difference between current stock and infinite stock develops.
3. Assess Stock Levels
As mentioned above, if you notice a significant difference between the infinite and current stock levels, adjust first the timeframe to see how the sales volumes change. If the sales volume is projected to dip close to zero, it means your current stock might be insufficient for the campaign.
4. Modify Stock Levels
Use the stock modifier to increase your stock in response to the projected demand. Experiment with this feature to strike a balance between increased sales, inventory, and profitability.
5. Adjust Costs
Finally, consider additional costs associated with your campaign. You can add a percentage increase to account for extra costs or elements like kickback discounts. This will finalize your scenario planning and you are ready in minutes, instead of hours with Excel sheets.
Sniffie’s forecasting module offers an intuitive way to plan your discount campaigns, using AI to predict future demand and simulate different scenarios. By adjusting parameters like price, stock levels, and costs, you can find the perfect balance that optimizes both sales volumes and profitability. By integrating Sniffie’s forecasting module into your campaign planning, you can ensure you’re making data-driven decisions that will help your business thrive.
Conclusion
In conclusion, Sniffie’s forecasting module provides marketers with a powerful AI-driven tool to plan and execute effective discount campaigns. By leveraging advanced enforced learning AI and analyzing factors such as demand, price, and costs, this module offers precise predictions and scenario simulations. With the ability to adjust parameters like pricing, stock levels, and costs, businesses can optimize sales volumes and profitability. By incorporating Sniffie’s forecasting module into campaign planning, marketers can make data-driven decisions that drive success and help their business thrive.