How To Measure Post-Promo Success

Feeling refreshed after a redeye last night from Phoenix back to New Jersey, redeyes always sound great in theory, but then the next day hits and although you're happy to be home, you're essentially a zombie. 

The KeHE show was a great success and it was amazing to see some of our brand partners in person again. 

I am a strong proponent of distributor shows especially order taking shows and KeHE always does a great job at putting on events that are well attended and executed. 

We spoke with hundreds of brands and it looks like there is equal amounts of excitement and hesitation about the year ahead. 

One of the conversations that kept coming up was brands trying to get a handle on which trade spend promotions were working best for them.

We always have interest in our rebate tool as a means to drive velocity, but were pushing our brands to look at key indicators after they run a promotion with us or through their retail partners to look at a few key KPIs to measure success and not just the results of a promotional activity in a vacuum. 

Today I wanted to dive into the top KPIs to look at post-promotion and see if we can’t get past just the initial sales lift that most brands look at and then call it a day. 

Overall sales generated is too surface level and although we want to see those big boosts in sales, we need to understand if the promotions are actually breaking through to our core customers. 

First, a quick word from Vividly, with some BIG news!

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Vividly Secures $30M to Transform CPG Financial Operations 

Managing trade promotions and financial operations in the CPG space has long been a complex challenge — but we’re out to change that. Fresh off a successful year managing over $2.6 billion in trade spend, we’re thrilled to share that we’ve secured $30M in Series B funding led by Centana Growth Partners to expand into the office of CPG finance with our AI-powered solutions.

What started as a leading trade promotion management platform has evolved into something bigger. We’re now pioneering new frontiers in CPG financial technology, with groundbreaking solutions like Transcend AI for predictive insights and Cash Application for streamlined payment matching.

This funding will accelerate our mission to redefine CPG financial operations. We’re expanding our AI capabilities, automating manual workflows, and building new financial tools specifically for CPG brands. With over 2,500 professionals already using the platform and 50 industry-leading brands onboarded in 2024 alone, let us show that there’s a better way to manage trade and financial operations.

Want to see how Vividly's expanding suite of solutions can transform your CPG operations? Learn more at govividly.com 

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Trailing Incremental Lift

If we move past just the initial sales generated, incremental lift is the next KPI most brands will look at. They will see the difference between their average sales generated and their sales during the promotional event, but if we add trailing to that we can assign different time periods to see the stickiness of the promotional activity.

I don’t want to know if my promotion was just effective at the moment, I want to know that the 2-week trailing incremental lift is high and that we have sustained a new baseline for sales. I then want to see what that baseline is after a month and so on. 

These time periods will change depending on the usage of your product. If your product is something customers buy 2-3x a year, then you need to adjust this metric to match that buying cycle. 

If you're seeing large spikes during the promotional period and then your product sales return back to the baseline, it might be a bigger underlying problem with your product resonating with consumers or your targeting the wrong consumers during the promotion. 

Cost Per Incremental Dollar (CID) 

CID should tell you how much you have to spend in order to get an extra dollar of sales from your promotion.

You can see your CID by taking the amount of money spent on trade promotions divided by the additional sales generated by those promotions. 

You need to know if it’s viable for you to run the promotions you have in place and which promotional mix works best. 

If you're upside down on one TPR, but another has a lower CID, it's a good indicator that you should index your promotional strategy towards the lower CID option. 

Return on Investment 

ROI is thrown around in general terms most of the time, but here I want it to apply to the profitability of your promotion. To figure out your ROI you're going to take your profit from the incremental revenue generated during the promotion and divide it by the trade spend costs associated with that promotion. 

As you start to hone in on your ROI after each promotion, it will be easy to see which ones are higher and more effective (and profitable) for your brand. 

Make sure you don’t include the baseline profit here since you want the number to only account for the new sales attributed to the offer. 

Market Share Increase

This takes patience and a longer term approach, but you should set annual reviews of how your promotions helped you increase market share and if that increased presence inside your category or set can be attributed to the effectiveness of  your trade spend campaigns. 

If you know that a certain trade spend strategy at Retailer X leads to a 5% market share increase, you can start to have a longer term view about your promotional strategy and the story it supports during your next review. 

Telling a buyer that you see X% increase on promotion, but that you expect those numbers to increase by 20% if they cut in two more SKUs brings a level of savvyness that other brands in your set are not bringing to the conversation. 

You don’t want to spend money blindly and you don’t want to promote without a plan. 

Make sure you have the KPIs in place to ensure success and make it easy for you to identify the winners and losers in your promotional mix.