Your recent promotional event was a success—wasn't it? If you're only looking at POS data for the specific items included in that event—how can you be so certain? Companies spend too much time focusing on the promoted items, and not enough time looking at the overall impact of that event for the larger category or brand.

To determine the true impact of promotional events, you have to expand your vision. While items obviously get a sales lift when they are featured, does that lift offset the potential negative sales impact to the rest of the assortment? Get a handle on sales cannibalization with greater visibility of the winners as well as the losers. Then use the data to get smarter about choosing future events that will maximize your overall promotion effectiveness.

Just what should you look at? Start by examining how promotion of one item or brand impacts sales for the other items in the assortment. Are you losing sales when competitive brands are promoted? If the data indicates that consumers are switching to the promoted brand due to price, then perhaps you need to consider promoting during those weeks as well in order to remain competitive at the shelf. Incremental data can also show whether a promotion (be it yours or that of a competitor) is drawing new people to the category who wouldn't normally be there. If so, your brand can benefit from events they're not a part of. If you find that you get a bump when a competitor is advertised, then you should consider when, or if, you promote—why give up price with a sales promotion when you can benefit from another brand's promotion?

Now look at new item launches and how they impact other items in the assortment. By doing so, you can see whether the money and time spent on R&D was worth it. With the introduction of a line extending new scent, you would expect to see an incremental impact from having an additional SKU, but how incremental was it to the total business? Are you just stealing sales from your existing items? You can't fully understand a new product launch if you don't discover whether the new product attracted new customers or whether it just cannibalized your own brand.

And what about bonus packs—is it worth the time, money and effort to develop them? To get those answers you have to examine how the bonus pack affected the base item. What does the incremental data tell you about ROI?

Broaden your horizons. Get incremental.

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