As a marketer, being able to accurately measure the impact of your campaigns and promotions is critical One of the key metrics you can use to quantify marketing success is sales lift But what exactly is sales lift and how do you calculate it?
What is Sales Lift?
Sales lift refers to the increase in sales directly attributable to a specific marketing campaign or promotional event, It’s the incremental increase that occurs during the campaign period compared to what sales would have been without the campaign
In other words, sales lift calculates the difference between the actual sales achieved during the promo period and the baseline or “normal” sales that would have occurred anyway
By determining this lift in sales, you can clearly see the causal impact of your marketing efforts. Calculating sales lift helps answer the question: Did this campaign boost sales, and if so, by how much?
Why Measure Sales Lift?
There are a few key reasons that brands, marketers and retailers care about accurately measuring sales lift:
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Quantify campaign ROI: Sales lift helps determine the ROI of marketing spend by showing the incremental revenue directly tied to a campaign. This helps justify marketing budget and guide future spend.
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Identify winning campaigns: By comparing sales lift across campaigns, you can identify your most effective marketing activities and double down on what works.
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Optimize campaigns: Understanding sales lift can help you fine-tune campaign elements like offer, creative, targeting and more to optimize performance.
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Forecast impact: Knowing historical sales lift for campaigns allows more accurate modeling of expected future results.
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Manage inventory: Sales lift data helps inform inventory needs around promotional periods.
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Set promotion strategy: Sales lift figures can guide the types of promotions you run and when you schedule them.
Clearly, sales lift is a pivotal metric for guiding data-driven marketing decisions. But how exactly do you calculate it?
How to Calculate Sales Lift
Calculating sales lift requires a simple two-step formula:
Step 1) Actual sales during campaign period – Estimated baseline sales without campaign = Incremental sales lift
Step 2) (Incremental sales lift / Estimated baseline sales) x 100 = % sales lift
This provides both the total dollar amount of lift and the percentage increase driven by the campaign.
The key to accurately determining sales lift lies in establishing an accurate baseline sales estimate – what sales would have been without the marketing campaign. There are a few options for estimating the baseline:
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Prior year sales: Compare to sales during the same period in the prior year.
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Pre-period sales: Average sales for the 2-4 weeks leading up to the campaign.
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Control group: Compare to a similar location/segment without the marketing campaign.
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Predictive modeling: Statistical models to forecast “normal” sales.
Let’s walk through an example of calculating sales lift based on prior year sales:
Campaign Period: June 1 – 7
Actual sales during campaign: $45,000
Sales same week prior year: $25,000
Incremental Lift: $45,000 (Actual) – $25,000 (Baseline) = $20,000
% Lift: $20,000 (Lift) / $25,000 (Baseline) x 100 = 80% lift
In this example, the campaign generated an 80% sales lift versus the prior year.
When leveraging prior year data, it’s important to account for key factors like seasonality, market changes, and growth trends that could impact the baseline. Statistical predictive modeling using multiple data inputs often provides the most accurate estimate of normal sales.
Tips for Accurately Measuring Lift
Here are a few best practices for getting the most accurate read on sales lift for your campaigns:
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Isolate the impact – When possible, run campaigns in limited markets to isolate the lift impact versus a control group.
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Account for external factors – Consider impacts like seasonality, holidays, competitors, etc. when setting baseline.
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Leverage analytics – Statistical models can build more accurate baseline estimates based on historical data.
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Calculate incrementally – Measure lift over regular periods to account for delayed response to marketing.
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Compare channels – Calculate lift for each marketing channel separately to understand their unique impact.
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Consider halo effect – Marketing can sometimes lift sales of related products, so measure total lift across product lines.
Sales Lift in the Retail Industry
Measuring sales lift is particularly crucial in retail, where brands are constantly running promotions and campaigns to drive traffic and sales within brick-and-mortar stores.
Retailers must quantify campaign results at the individual store level to understand performance. Many leading retailers are now using retail data platforms like Mobile Insight to combine transaction data, foot traffic insights, competitor intelligence and more to accurately measure true incremental sales lift down to the store level.
These platforms provide visibility into how factors like weather, nearby events, inventory levels, and operational execution impact sales. This allows retailers to isolate the true sales lift driven by marketing versus external variables.
With retail data analytics, brands can answer questions like:
- How did our email coupon campaign impact conversion rates in each region?
- What was the incremental lift from our seasonal pricing promotion at each store?
- How did weather influence the lift we saw from our outdoor signage campaign?
Advanced retail analytics are a game changer for accurately measuring marketing ROI and making data-driven decisions to optimize campaigns.
Key Takeaways on Calculating Sales Lift
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Sales lift represents the incremental increase in sales directly driven by a marketing campaign or promotion.
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Accurately measuring lift provides pivotal insights into marketing ROI, campaign performance, and inventory needs.
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Sales lift is calculated by taking the actual sales during a campaign and subtracting the estimated baseline sales without the campaign.
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Setting an accurate baseline is critical to measuring true lift. Prior year sales, pre-period averages, and control groups are common estimation methods.
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Retailers can leverage analytics platforms to isolate sales lift at the store level based on marketing activities, external factors, and operational data.
By mastering sales lift measurement, marketers gain an invaluable KPI for optimizing campaigns and driving measurable impact on the bottom line. Properly quantifying lift provides justification for marketing investments and helps guide smart, data-driven decisions.
March 13, 2023 | Carmen Bozga, Kassius Kohvakka
When running a successful marketing campaign, its important to understand how each media channel contributes to your overall sales and success. This can help you optimize your marketing strategy, allocate your budget more effectively, and ultimately drive better results for your business.
Sales uplift or lift can be measured through a variety of methods, including controlled experiments, A/B testing, attribution methods, and Marketing Mix Modeling (MMM). The goal of measuring sales lift is to determine the true impact of a marketing campaign on sales, taking into account other factors that may influence sales, such as seasonality or external events.
As previously mentioned, here are a few effective approaches you can take to measure the sales uplift of individual media channels. One method is to use a controlled experiment, where you compare the sales of a group of customers who were exposed to a specific marketing channel (such as a TV ad or email campaign) to a group of customers who were not exposed to that channel. By comparing the sales data of these two groups, you can determine the incremental sales lift that the marketing channel provided. Similarly, you can perform A/B testing for two specific audience groups.
Alternatively, you can use MMM to measure your sales lift as part of your overall marketing measurement strategy. MMM analyzes your sales data to determine which media channels were most effective in driving sales. This approach allows you to see how each channel contributes to the customer journey and gives you a better understanding of the overall impact of your marketing efforts. In the following sections we will dive more into these methods.
What is “sales lift” in Marketing Mix Modeling?
Essentially, sales lift is a metric used to measure the incremental increase in sales that can be attributed to a specific marketing campaign or media channel. It is the increase in total sales you observe during a campaign in comparison to the level of sales you would have archived without running the campaign.
Simply put, sales uplift can be calculated like this: Total Sales – Base Sales = Sales Uplift
Base sales refer to the level of sales that your company would achieve without any additional marketing investment. It represents the existing demand for a companys products or services that is driven by factors such as brand awareness, reputation, product quality, and customer loyalty. Therefore, if you would stop all your marketing investments immediately, you would still, hopefully, have a certain amount of base sales.
When a company invests in marketing, the goal is to increase sales beyond the base level by attracting new customers, increasing purchase frequency, or increasing the average order value. The increase in sales achieved through marketing efforts is referred to as incremental sales, which is the difference between total sales and base sales. This incremental sales, is essentially the sales uplift, because it represents the additional “lift” on top of the base sales.
Let’s visualize it:
In the chart above you can see an example of sales timeline during a 12 months period. The grey section represents the base sales and the colorful sections represent the sales lift across the different media channels (like Youtube, Tiktok, Pinterest etc). Hence, everything above the base sales represents your sales uplift. You can try our interactive demo (including the chart above) here.
How to Calculate Sales Growth in Excel
What is a sales lift formula?
The sales lift formula encompasses several key values that are necessary for measuring the increase in promotional sales, where sales lift equals the actual sales amount minus the baseline amount: Actual sales amount: The actual amount of sales is the total revenue a business generates during a specific promotional period.
What is the best way to calculate sales lift?
Ultimately, there is no single best method. The key is to be sure to establish a baseline in order to more accurately calculate sales lift. Once a sales baseline has been established, you can begin to calculate lift in sales in order to understand the effectiveness of in-store promotions and make better marketing and advertising decisions.
How do you calculate incremental sales lift?
Then, to determine the sales increase by percentage: Incremental Sales Lift ÷ Baseline Sales x 100 = % Increase With this two-step process, brands and marketers are able to see the impact of their advertising, marketing and promotional programs. It’s spelled out in hard sales data that facilitates a clear and confident analysis of incremental lift.
How is lift calculated?
Lift is calculated to see if a marketing effort or promotion actually generates a measurable lift in sales. We gave you the formula to determine lift, however, there’s another way to measure it without having to guestimate a baseline sales figure. In this method, lift is calculated by using control and test markets.
