Promotion Engine is a new software category that helps digital teams launch, manage, distribute, and track various incentives.
In theory, you only need a piece of paper and a pen to create coupons. You can think of a code pattern, write it down, share it customers and ask your IT team to accept it as a, let's say, -15% discount. In practice, however, you need to operate on the data sets of hundreds of customers, control multiple dependencies and stay within the budget at the same time. In other words, the rapid digitization has made it impossible to survive and thrive in the commerce space without a reliable system for dynamic and personalized offers.
With an advanced Promotion Engine, you no longer need to distribute different promotions across single-issue software. Instead, you get all promotion types and tools to manage them within a single platform.
Your Promotion Engine should support the following scenarios:
If you have selected the right vendor, your Promotion Engine should let you create unique and personalized scenarios, without extra input from the development team allowing you for faster time-to-market and more space for sudden strategy and market shakeups.
If you already know what features are needed in any flexible Promotion Engine, you may be thinking about building and maintaining a similar solution in-house.
If you choose to build a Promotion Engine in-house, what you get is a new product that you need to develop, test, document, and manage on your own. On the other hand, with a custom-made promotion software, you get ultimate freedom and personalization.
On the other hand, if you buy a ready Promotion Engine, you can save time and money and accelerate time-to-market, which is essential in today's fast-paced economy. The dilemma here is – you can spend time and money on building an in-house solution that will cover your business-specific use cases or save money and time with a ready-to-go promotion software that may or may not cover all of your requirements.
API (Application Programming Interface) is a form of code that lets two software programs communicate with each other in an understandable way. Their conversation takes the form of requests (questions) and responses (answers). For developers, API-based architecture means quick and easy integration. Why? Having a single system to store all the needed data would be a technological nightmare. Luckily, with an API, a Promotion Engine is able to quickly reach out to other connected systems, e.g., CRM, to ask about needed data and retrieve information which can in turn be used to personalize offers. If you build digital products, you know all too well about the necessity to integrate plenty of systems with customer touchpoints. And the integration of multiple systems costs. A lot. With the API-first approach, you can mitigate these risks.
Headless software describes a program that functions without a frontend. This means that to work properly, such a system has to be connected to an outside frontend interface (usually via API). Headless approach is the next big thing in software engineering as it offers plenty of benefits, such as:
Let's assume that you have decided that buying a ready solution is a better business decision. Now, the next logical step would be a thorough market research and preparing RFPs, so that you can choose the best Promotion Engine for your needs. The goal of an RFP (Request for Proposal) is to outline the details of the project and ask potential vendors to come back with a bid for the work.
Generally, there are two types of software requirements you should think of before choosing the right software provider – functional and non-functional requirements.
A non-functional requirement (NFR) is a requirement that specifies criteria that can be used to judge the operation of a system, rather than specific behaviors. They can include, for example, legal, security, scalability, safety, usability, maintainability, testability, privacy, or technological requirements.
First, talk to your team about what they really need or what your company standards are.
You should read a bit on what the Promotion Engines should provide. If you have never purchased a similar software, your colleagues might not know what they need exactly. Listing some feature ideas can help you ask your teams the right questions.
Here is an extensive list of non-functional requirements:
Besides writing non-functional requirements, you need to collect functional requirements, specifying how exactly you are planning to use the Promotion Engine.
Functional requirements are directly related to the core functionality of the software.
Again, the best approach would be to talk to your colleagues first. You can use a list of features based on what the top Promotion Engines provide or based on this guide to start the discussion.
There are a lot of variations from business to business on what actually is needed. Think about what are your specific use cases for the Promotion Engine. Based on them, you can specify the functional requirements further.
Promotion Engine use cases are the types of sales promotions you want to run and manage using the Promotion Engine. A properly structured use case should describe what type of sales promotion you would like to use, what type of promotion (discount) should be applied, who would the target market be and what kind of limitations (customer-, order-, product- or campaign-level, for example) you would like to use.
There are a couple of things you can do to quickly come up with the initial list.
Take a look at all past promotions and evaluate if you will still need such scenarios or similar ones in the future. You should check historical data on promotions to determine what has worked best for you in the past.
You should also discuss current and future needs with all stakeholders. If they are not sure what they want to do using the new Promotion Engine, you can help them to come up with ideas. First of all, they should think of their target audience and goals. Then, they should think of ideas on how to achieve them. Next, they will need to get the approval from the department heads. If the campaigns are approved for trial, you should add them to the list. If you skip the approval step, you may end up with way too long of a list and choose a more expensive Promotion Engine, while a simpler one may have met your needs as your company may not be ready for the more advanced promotional scenarios (just yet).
You can check what your competitors are doing. Even if you do not want to copy their strategy to the letter, at least you should check what types of promotions they run – is it discount coupons, automatic promotions, loyalty or referral programs, or sweepstakes? This will help you come up with a relevant counteroffer.
If you are not sure what promotion types to use, a great solution is conducting research among customers. This can include qualitative user research like customer surveys, target audience research, one-on-one interviews, or quantitative research. You can ask them directly which incentives they like better or what level of discounts would motivate them to perform a certain action.
A use case should specify the exact scenario you would like to launch using the Promotion Engine. You should specify:
You can describe a use case as a user story, using natural language, or as a series of rules using "and", or, "if". The most important thing is to include as many details as possible, especially covering the types of limits and rules you want to use.
Here are some examples of descriptions:
Note: You should only write down unique use cases. If some of them are similar, you can write them down as one.
Apart from the vendors’ readiness to deliver on your desired functional and non-functional requirements, here are a couple of factors you should take into consideration when choosing a Promotion Engine.
You should check how long it will take you to integrate the Promotion Engine with your existing stack. A rough estimation from your developers is a good starting point. You should also check how fast it would be for your marketing or sales teams to prepare and ship new promotions. Fast time-to-market is crucial, especially in B2C businesses.
Note that the more time you have to spend on the integration, the more it will cost you. You should calculate it into your pricing considerations between the vendors.
You should check what integrations they offer out-of-the-box as well as whether they provide developers to integrate the solution or any technology partners that could potentially shorten your integration time.
You should double-check whether selected Promotion Engines have a UI for non-technical teams. Typically, the main users of Promotion Engines are marketers, salespeople, and customer service agents. The dashboard should be intuitive enough to be used by them after initial training and it should perform the majority of the functions, without developers' involvement.
The less your developers are required to maintain and troubleshoot issues, the better. Features like monitoring logs or the level of support can tell you how much help you can count on if something goes wrong.
There is no better way to check whether the software is a good fit than to run a POC to see how it will work with your stack. POC, however, requires time and effort on your part. It is always a nice gesture from the vendor’s side to let you run a POC for free, provide you with the the initial training, and help to set the software and integrations up as well as provide a free sandbox environment for as long as you need one.
One of the benefits of buying software instead of building it is that you do not have to spend time and money on improvements. The Promotion Engine should give you the best-of-breed technology, while staying up-to-date with new requirements, technologies, promotional scenarios, and communication channels. You can check their release notes and updates to evaluate how often they implement new features. You do not want to get stuck with a vendor that stays behind their competition as this will set you back behind your competition as well.
Promotion Engine should adapt to any sudden changes and support marketers with even the most complex scenarios. Even if you have written down all use cases you could think of and the vendor can deliver on them, you never really know what you will need in the future. Look for features like adding custom data and limits, stacking with a defined hierarchy or custom events. These features will allow you to create complex promotional scenarios you have not thought about so far.
Promotion Engine vendors may brag about features and capabilities but there is no better way to check if it's true than to read their clients' testimonials. Read through their case studies before you make up your mind. You can also check their ratings on software listing platforms but beware as these may have been added by the software vendor’s employees or friends.
A good vendor-client relationship should be built on trust. It is difficult to judge how trustworthy a vendor is but there are a couple of factors that can point you in the right direction:
The Promotion Engine should be future-proof, meaning that you should not have to change it if you need more features or integrations in the future. Especially check how easy it would be to connect it to a different e-commerce platform, CRM system or channels.
It would be great if you could have any influence on the vendor’s roadmap as this can help you get the features you need faster. Ask the vendor if they allow customers to submit ideas for their roadmap and vote for the most needed ones.
The biggest Promotion Engine vendors have their pluses and minuses. On the one hand, they are stable providers and will rather serve you for years, on the other hand, they will probably not adapt to your needs. Small vendors run a risk of bankruptcy, therefore they may be less reliable. A good question to ask a potential vendor is “how much % of yearly recurring revenue will we mean for your business” – this will show you how dependant they are on you as well as how much, more or less, they are making.
Price is an important factor and you should definitely go with the best quality-price ratio. This means you should consider the cheapest vendor out of all that can meet your requirements. But if the price difference is not huge, go with the one that is more scalable, future-proof, and trustworthy as this will save you the cost of having to change the vendor in the future. While the price is the deciding factor, you should not only decide based on the monthly subscription cost but also on the cost of maintaining or changing the Promotion Engine, if it does not meet your needs or scale in the future.
One of those additional pricing factors to consider is how easy it is to scale the service up or down. Can you cut back the cost if you are making losses? The easiness of scaling the service up or down is also important. The last factor related to pricing you should consider is the exit options. How quickly can you terminate the contract with the vendor?
We built Voucherify Promotion Engine with the API-first philosophy in mind. As a leader on the market of API-based & headless Promotion Engines we are ready to build powerful promotions driven by 1:1 personalization. The question is – are you?
Compare Voucherify to other providers to make the best decision for your business: