The One Question Every Brand Needs to Ask After a Promotion: Did It Work?
Too many CPG brands celebrate a sales spike and move on. But here’s the hard truth: without the right analysis, that spike might be a mirage.
We’re diving into the most critical — and most overlooked — question after any promotion: Did it actually work?
Not "Did we sell more?"
Not "Did we move volume?"
But did the promo deliver real ROI — incremental revenue, profit, and long-term value?
The Problem: Most Brands Aren’t Asking the Right Question
Here's how it typically goes:
A promo runs.
Sales go up.
The team celebrates.
It gets added to next year’s calendar.
But this playbook is flawed. Why? Because sales lift alone doesn’t equal success. If you don't know the incremental impact — what you sold because of the promotion, not just during it — then you’re guessing.
Worse, you may be scaling something that actually lost money. A lot of brands are just repeating the same events because they think they worked, but they’ve never actually measured them.
The Shift: How to Measure Promotions That Actually Work
Instead of relying on top-line sales or gut feel, we recommend using a simple but revealing metric we call True ROI:
(Incremental Gross Revenue – Incremental Cost of Goods Sold) / Total Trade Spend
This formula cuts through the noise. It shows you exactly how much incremental profit your promo generated for every dollar spent.
A few key points:
A True ROI over 1.0 means the promotion paid off.
Below 1.0? You're losing money — and often don't know it.
A high lift but low ROI might indicate you're giving away too much margin for too little benefit.
The Cost of Not Knowing
When brands skip this analysis, a few things usually happen:
Underperforming events get repeated
You think they worked — because you only looked at volume.Top-performing events don’t get scaled
Without clarity, the promos that actually worked don’t stand out.You overspend to underperform
Running deep discounts or stacking tactics without knowing what’s effective means you're burning cash.
Data Is the Differentiator
Take this example from a mid-size food brand reviewing six promotions they ran over the past year. On the surface, all six looked like wins — sales were up during the promo periods, and retailers were happy.
But once they analyzed the incremental impact of each promo using True ROI, the story changed:
Four of the six promos had a True ROI below 1.0, meaning they lost money.
One broke even — solid volume, but margin erosion canceled out the gains.
Only one promo generated real incremental profit.
Here’s what set the winning promo apart:
It didn’t have the deepest discount — just 10% off, not 20%.
It ran in fewer stores, but those stores had high traffic and strong category alignment.
The offer was supported by in-aisle signage instead of costly display fees.
Most importantly, it attracted new buyers instead of subsidizing regular ones.
The result?
✅ Higher incremental units
✅ Better margin retention
✅ Leaner spend
✅ True ROI of 1.8
Armed with this insight, the brand did something rare: they cut the flashy, high-spend promos from the next cycle — and doubled down on the one that actually delivered.
They didn’t spend more. They spent smarter.
That’s the power of post-event analysis. Without it, they’d still be throwing money at the wrong promotions — all because the volume looked good.
Takeaway:
If you’re not asking “Did it work?” — and answering it with real numbers — you might be scaling the wrong strategy.
Start by calculating True ROI.
Get clear on incremental revenue, incremental COGS, and your all-in trade spend.
Then do the hard (but essential) work: compare, evaluate, and optimize.
You’ll spend smarter. You’ll grow profitably. And you’ll finally know which promotions are worth repeating.
Want help calculating your ROI?
At TrewUp, we help brands calculate ROI using real deductions and shipment data, so you can assess performance by retailer, item, and event.
Frequently Asked Questions about Smarter Trade Promotions with True ROI
What is True ROI in CPG trade promotions?
True ROI (Return on Investment) measures the incremental profit generated by a promotion after accounting for factors like discount depth, display costs, and consumer behavior. Unlike top-line sales lifts, True ROI tells you if a promo actually grew the business — or just shifted volume.
Why do most trade promotions fail to deliver real ROI?
Many CPG promotions boost short-term sales but don’t increase incremental volume or profit. Common pitfalls include:
Deep discounts that erode margins
Spending in low-performing stores
Promos attracting existing customers instead of new ones
No post-event analysis to measure effectiveness
Without understanding the true impact, brands often repeat underperforming promotions.
How can brands improve trade promotion effectiveness?
Start with post-event analysis. By comparing actual promo performance across variables like region, discount depth, and store execution, brands can:
Identify which promotions drive real growth
Cut wasteful spend
Reinforce profitable tactics
Use tools like PEA (Post Event Analysis) and True ROI models to guide smarter decisions — not just gut feel or retailer pressure.
What’s an example of a high True ROI promotion?
A mid-size food brand found only 1 out of 6 promotions generated real incremental profit. The winning promo:
Offered a modest 10% discount
Targeted high-traffic, well-aligned stores
Used in-aisle signage instead of expensive displays
Attracted new buyers
This promo had a True ROI of 1.8 — proving that smarter targeting and leaner execution beats bigger budgets.
Is more data always better when it comes to promotions?
Not necessarily. What matters is the right data — and knowing how to analyze it. Volume alone can be misleading. Brands need to look at:
Incrementality
Cost-to-serve
Retailer margin structures
Promotional cannibalization
Better questions lead to better use of data — and better results.
What’s the takeaway for CPG operators?
Volume isn’t the goal — incremental, profitable growth is. Use data to understand what’s working, kill what’s not, and build a promo calendar around actual ROI. Small changes, backed by insight, can unlock major impact.
