The Discount Worked, and That Was the Problem

Gandhinath Swaminathan

11 minutes ago

4 min read

Why Your Best Promotions Can Make the Next One Necessary

This series follows one team through a year of pricing and promotion decisions. I made up Larkfield Foods, Kestrel Market and the people in this story, and the numbers come from a simulated market.

Cartoon: Priya, holding her coffee, asks "We're comparing against our own deals?" while Nina points at a chart of tall gold bars next to short blue ones, next to a corkboard crowded with deal flyers.

Your Soft Months May Not Be Soft

When a month comes in soft, you add a gap-fill deal and blame the season or a competitor. You rarely check what you measured the month against.

At Larkfield Foods, Tom Becker in finance wouldn't approve next year's trade rate for Sunny Oats at Kestrel Market until he knew why the team kept needing another deal. Kestrel lets Larkfield add a price cut at short notice, and the team often did. Nina Alvarez, the revenue analyst, started with Larkfield's trade plan, which marks the deals the team added later and why.

Your Trade Plan Already Shows Which Deals You Added Later

Stacked bar chart of Sunny Oats Toasted O's deals at Kestrel Market by year. Year 1: 12 deals, 6 on the yearly calendar and 6 added after a soft month, with 40% of boxes sold on a deal and $11,700 of trade on the soft-month deals. Year 2: 13 deals, 3 and 10, with 49% on a deal and $27,500. Year 3: 15 deals, 3 and 12, with 53% on a deal and $33,000. — Deals added after a soft month doubled in three years (Simulated market).

"In the first year, we added half our deals after a soft month," Nina told Priya Raman, who plans Larkfield's deals with Kestrel. "Last year we added 12 of 15, and they took $33,000 of our $37,000 in trade."

"Then we've had more soft months," Priya said.

Your Sales Tracker May Be Flagging Your Own Deals

Larkfield's weekly tracker flags a month as soft when its average weekly unit sales run more than 8% below the average of the 13 weeks before it. Those 13 weeks held three or four of Larkfield's own deals on average, so Nina reran the flag on full-price weeks only, the weeks with no deal in the trade plan.

Bar chart of soft months by year for Sunny Oats Toasted O's at Kestrel Market. Gold bars show the months the team's tracker flagged soft, each followed by a deal: 6 in year 1, 10 in year 2 and 12 in year 3. Blue bars show the months still soft when the tracker compares full-price weeks only: 3, 2 and 3. — Simulated market.

"We're comparing against our own deals?" Priya asked.

"For most of these months, yes," Nina said. "Every deal changes where the next decision starts. Each one lands in the average our tracker compares against a month later, stays there for three months and raises the bar. What I can't tell is whether shoppers also bought less after each deal. Two list-price rises and other brands' deals blur that."

What an AI Sees in Your Post-Event Reports

Nina also gave Claude, an AI assistant, the past year's 15 post-event reports and nothing else. Each report compares a deal week with the four full-price weeks before it. She asked: did the plan work, and should we run it again? Its key lines:

"It couldn't see the weeks after a deal either, but it said to track them," Nina said. "And its verdict on the 30% deals rests on the deal week alone and a margin it had to guess."

Riley Shaw, who heads revenue growth, stopped booking deals off the soft-month flag until it compared full-price weeks only.

What Happened to Sales After Each Deal

I built this market, so I can see what the team can't: the dashed line, what shoppers would have bought at full price with no deals on any cereal and no list-price rises. Full-price weeks sold 84% of that line in the first year (counting from the first deal) and 78% in the third. Part of that gap is Larkfield's own deals pulling sales from the weeks after; the rest is other brands' deals and the two price rises. But that dip set off only a few soft-month deals. Most came from the 13-week average the tracker compares against, which Larkfield's own deals had inflated.

Bar chart of three years of Sunny Oats Toasted O's sales at Kestrel Market. Gold bars mark deal weeks and gray bars full-price weeks. A dashed line shows what shoppers would have bought at full price with no deals on any cereal on the shelf and no list-price rises. The gray bars sit further below the line each year: 84% of it in the first year, counting from the first deal, 80% in the second and 78% in the third. — Only the simulation can draw the dashed line (Simulated market).

Count Your Soft-Month Deals Before You Plan the Next One

Download the soft-month workbook (Excel) below.

Fill in one product at one retailer, one row per week: units, deal or not, why the team booked it and trade spend.
By year, it shows the deals added after a soft month, the trade they took and the share of units sold on a deal.
It reruns your soft-month flag on full-price weeks only.
Larkfield's simulated weeks come filled in.

If your soft months vanish on full-price weeks, your tracker was flagging your own deals.

What No Tool Here Could Do

You book your next deal before you can see what it will do, and it shapes the months you judge after it. Every tool here looked back. Claude warned that a deal takes from the weeks after it, but from the reports alone none of them could say how much before you book the next one.

Have you traced a soft month back to its cause? Tell me how in the comments.

Where the Numbers Come From

Every number comes from the simulated market. The deal reasons come from the trade plan (on the yearly calendar or added later, with a note on each added deal), the boxes from the scan data and the trade spend from Larkfield's books, matched to each deal. Each deal here runs one week. Rebuilt from the scan data, the team's tracker flags all 28 months before the deals the trade plan marks as added after a soft month; the rerun keeps its rule and drops the deal weeks from both sides of the comparison. The dashed line in the aside is the simulation's own record, which no real team can see. The market falls within published ranges, such as the dip after a deal, and its model card lists the sources.