Promotion ROI Analysis for CPG | Measure Every Event

Beyond Vanity Metrics

A promotion that lifts volume 30% sounds like a success. But what if half that lift came from pantry loading - consumers stockpiling at discount instead of buying at full price next month? What if the margin on incremental units was negative after accounting for trade spend and COGS? According to the POI 2024 State of the Industry Report, 70% of CPG organizations don't feel their promotions can be effectively evaluated or optimized. The problem isn't a lack of data - it's a lack of the right analytical framework.

True promotion ROI analysis goes beyond volume lift to answer the question that matters: did this promotion generate more gross margin than it cost?

How We Calculate Promotion ROI

Our promotion ROI methodology follows a rigorous five-step process that isolates true incremental impact:

Baseline Estimation - We model what sales volume would have been without the promotion using historical patterns, seasonality, and trend analysis.
Incremental Volume Calculation - Total promoted volume minus baseline gives you the true incremental units driven by the promotion.
Cost Per Incremental Unit - Total trade spend on the event divided by incremental units sold. This reveals the real price you paid for each additional unit.
Incremental Gross Margin - Incremental revenue minus COGS on incremental units minus total trade spend. This is the bottom-line profit impact.
Promotion ROI (%) - Incremental gross margin divided by trade spend. A positive percentage means the promotion generated more margin than it cost.

What You'll See

Event-Level ROI Scorecards

Every promotion scored on incremental volume, cost-per-unit, margin impact, and ROI. Instantly identify your best and worst performers.

Customer Promo Comparison

Compare the same promotion mechanic across different customers. See which retail partners deliver the highest promotional ROI.

Mechanic Analysis

Evaluate BOGO vs. temporary price reduction vs. EDLP vs. display programs. Understand which promotional mechanics work for your brand.

Historical Trend Analysis

Track promotional ROI trends over time by customer, brand, and category. Identify whether your trade spend efficiency is improving or declining.

From Measurement to Action

Promotion ROI analysis isn't an academic exercise - it's the foundation for better commercial decisions. When you know which events deliver positive ROI, you can confidently build those into next year's plan. When you identify margin-destroying events, you can renegotiate terms or reallocate that budget to proven winners.

Our ROI analysis integrates directly with trade promotion analytics for complete spend visibility and feeds into annual promo planning so that historical performance data drives forward-looking decisions. Combined with margin intelligence, you get a complete closed-loop system for trade spend optimization.

Ready to know which promotions are actually making you money? Let's talk.

Quantify the Return on Every Promotional Dollar