Incremental Sales Lift
A measurement of the increase in sales due to a specific marketing or advertising effort.
Incremental Sales Lift corresponds to the increase in sales attributable to a marketing or advertising strategy. It is not the total sales generated but the additional revenue that would not have occurred without the particular campaign. Incremental Sales Lift sheds light on the effectiveness of an advertising initiative, revealing how much the campaign has moved the needle in terms of generating additional sales for an ecommerce business.
Formula
- There's a fundamental formula for calculating the Incremental Sales Lift. It involves subtracting the Control Group Rate (CGR) from the Test Group Rate (TGR) and multiplying by 100.
- Incremental Sales Lift (%) = [(TGR-CGR)/ CGR]*100
- TGR refers to the conversion rate of the group that was exposed to a particular ad or campaign (Test Group). The CGR refers to the conversion rate of the group that was not exposed to the ad or campaign (Control Group).
Example
Consider a brand that conducts an online display ad campaign to boost its sales. The control group, which is unexposed to the ad, has a conversion rate of 5%. Meanwhile, the test group, which was exposed to the ad, has a conversion rate of 7.5%. Using the formula, the Incremental Sales Lift from this campaign would be: Incremental Sales Lift (%) = [(7.5-5)/5]*100 = 50% This means that the display ad campaign resulted in a 50% incremental lift in sales.
Why is Incremental Sales Lift important?
Incremental Sales Lift is vital as it provides a direct link between marketing efforts and revenue. Insight into which initiatives are driving sales can help businesses allocate budgets effectively, optimize marketing strategies, and maximize Return on Ad Spend (ROAS). Not only does it influence decision-making, but it also enables validation of marketing investments.
Which factors impact Incremental Sales Lift?
Improving Incremental Sales Lift entails enhancing your advertisement and marketing efforts. Aspects such as making the ad content better, targeting the right demographics, experimenting with various ad formats, optimizing campaign frequency, and ensuring campaign consistency can be worked on to improve Incremental Sales Lift.
How can Incremental Sales Lift be improved?
Key factors impacting Incremental Sales Lift include product demand, quality of the advertisement, competitive activity, market trends, targeted audience receptivity, and more.
What is Incremental Sales Lift's relationship with other ecommerce metrics?
Incremental Sales Lift has significant co-relation with metrics like Return on Ad Spend (ROAS), Conversion Rate, Customer Lifetime Value (CLV), among others. A successful campaign leading to a higher Incremental Sales Lift is likely to boost ROAS, improve the conversion rate, and increase the CLV, painting a brighter picture of overall business health.