Question 1

How do I determine my 'baseline sales'?

Accepted Answer

Choosing the right baseline is crucial for an accurate analysis. The best approach is to use sales data from a recent, comparable period without a promotion. For a weekend promotion, use the prior weekend's sales. For a month-long seasonal special, use the previous month's data. Avoid periods with other major events that could skew the numbers.

Question 2

What should be included in 'promotion cost'?

Accepted Answer

Be thorough. This should include all expenses that you wouldn't have incurred otherwise. This includes digital ad spend (social media, search ads), printing costs for flyers or posters, the cost of any discounted inventory (the margin you lost on discounted items), and any staff overtime or prize money.

Question 3

What is a good ROI for a promotion?

Accepted Answer

There's no single answer, as goals can vary. A common benchmark for marketing ROI is 5:1 (or 400%), meaning for every $1 spent, you generate $5 in revenue. However, even a lower ROI can be a success if the promotion's goal was to attract new customers (customer acquisition) who may return later.

Question 4

My promotion had a high sales uplift but a low ROI. What does that mean?

Accepted Answer

This is a common scenario. It means your promotion was effective at driving sales, but it was too expensive to be highly profitable. This could be because the discount was too generous, or the marketing costs were too high. The next step is to analyze if you can achieve a similar uplift with a less costly promotion.

Question 5

How can this calculator help with planning happy hour?

Accepted Answer

This tool is perfect for analyzing happy hour performance. Set your baseline as the sales from the same time block on a non-happy-hour day. Then, input your happy hour sales and the cost (the total discount given on all items). This will tell you if your happy hour is truly increasing overall profit or just shifting sales to a lower-margin period.

Seasonal Promotion Calculator

Results

Understanding Promotion Metrics

Frequently Asked Questions

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