Is the Valpak price promotion worth pursuing at a larger scale?

 
 
 
 

It is not stunningly successful, but still worth it. Yes, you got 58 new customers but you also gave a discount to some customers that would have purchased from you anyway. This is called cannibalization and it cuts into the profitability of the promotion. To get some sense of whether it was successful you want to multiply 58 times the CLV. This will give you the total added CLV of the promotion. You then have to subtract some money from this because of cannibalization. There is no perfect number for this because the coupon depends on how much someone spends and you don’t know that.

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