is a senior research associate in retailing and a lecturer in direct, database and internet marketing at the Università degli Studi di Parma, Italy.

Correspondence: Cristina Ziliani, Università degli Studi di Parma Facoltà di Economia, Via J. F. Kennedy 6, 43100, Parma, Italy, Tel: +39 (0)521 902012; Fax: +39 (0)521 032393, e-mail: cristina.ziliani@unipr.it

Revised 20 October 2005.

Abstract

This paper proposes a new approach to measuring the effectiveness of consumer promotions, enabled by individual customer information collected via loyalty cards. The paper begins by discussing the complexity associated with measuring promotional effectiveness and the limits of current methodologies, then sets out to demonstrate that a customer-focused approach to promotion measurement — as opposed to the current product-focused perspective — can expand the measurability of promotional effects in three dimensions:

• objectives — in that not only sales volume and market share effects can be tracked, but also customer-specific and assortment-wide effects;

• time — in that promotional effects can be monitored for longer periods of time and the fulfilment of long-term goals can be measured;

• space — thanks to geo-marketing analysis, sense can be made of the variability of promotional response in different retail markets, channels and outlets.

This allows for better promotion planning and marketing effectiveness, with consequences that extend beyond economic benefits for the retailcompany itself and reverberate on relationships with suppliers and cooperative promotion decisions.