topic: return on investment investigation for loyalty campaign
area : food retail, cash flows in/out, investment analysis
For a food retailer we developed a custom made ROI tool that allowed the client to evaluate the ROI and cash flow impact for a potential investment in a promotion. This helped the client to determine the exact amount of investment against the desired ROI, the exact amount of supplier funded items needed to recover cost and influence positive cash-flow IN FLOWS and calculate the exact break-even point where investment is offset against the sales growth and net contribution. With the help of this ROI tool the client was able to execute the promotion in a further de-risked state, gain positive ROI and maintain a positive cash-flow position throughout the duration of the promotion. The ROI became the standard model to evaluate possible future promotions for this client.