How Do You Measure The Success On Product Promotions?

Now that you’ve completed your in-store promotion, it is important to determine the effects of the product promotion on your company. Measuring your results will show you what your invested funds have achieved. Here are the metrics you should use to measure the success of your in-store promotion:

Source: darmouth.edu

1. Profits

Promotions, like other investments, fundamentally work by earning revenue in exchange for a smaller investment. It is important to evaluate the impact of sales promotions on profit because there have been cases in which promotions led to higher sales but lower profits. Only 30 out of 45 promotions reported as successes are actually successful, while 19 out of 46 promotions reported as failures actually increased profits (Hardy 1986). In order for a promotion to be profitable, incremental customer sales must increase and the cost of obtaining one dollar in increased sales must not exceed a dollar. In the example below, the cost per incremental dollar of sales is $0.64. If the margin that the manufacturer receives from the retailer is less than $0.64, then the promotion is not profitable to the manufacturer.

2. Sales Volume

In order to accurately measure the increase in sales volume, you need to know your baseline (what sales were prior to the promotion). This equation can be used to find your overall increase in sales:

Overall Sales Lift = Lift in Promoted Item Sales + Halo – Cannibalization – Pull-forward

Source: Cross Cap

Lift in Promoted Item Sales: The difference between the sales baseline and the new sales volume.

Halo: The effect that occurs when promoting one item leads to an increase in sales of another item. Measure using basket analysis – look at historical transactional data across multiple promotional periods and analyze all baskets that contained the item promoted and determine among all those baskets which were the common items that were not on promotion (“Guide To Analyzing The Overall Lift Of A Retail Promotion”).

Cannibalization: When the promoted item’s sales increase but “eats up” the sales of another item. This can lead to a lower category lift.

Source: Cross Cap

Pull-forward: When the sale item is something that consumers regularly purchase and has a longer shelf-life, causing consumers to stock up on the item while it’s on sale, causing a spike in sales during the promotion and a dip in sales after the promotion.

Source: Cross Cap

3. Customer Satisfaction

Did you gain more customers after the promotion? Are customers happier with your product than they were before? Customer satisfaction is a key facet to customer loyalty and long-term brand switching, so it is important that you measure customer satisfaction when determining whether your promotion was successful.

4. Achievement Of Set Goals

Take another look at goals you set for the promotion. Did you achieve them? The principal, overarching goal of your promotion should have been to boost sales and increase brand recognition.

The most successful promotions have these features:

• friendly, communicative, and knowledgeable promoter


• good in-store positioning


• full stock of product


• harmonized appearance of marketing materials


• focus on brand recognition and increasing brand loyalty

From planning to implementing to analyzing, the entire process of a promotion is vital to making it a success. By measuring these four aspects of your promotion, you can determine whether your promotion was truly effective. Learn from your mistakes and take note of what you did well, and next time, your promotions will be guaranteed to be even more successful.

How Do You Measure The Success On Product Promotions?