Incremental sales measurements answer an important question: How do you know if a marketing campaign is responsible for sales growth? If you sold more products in the second quarter than the first, does that mean you ran better ads—or was it a happy accident? If you did have better ads, how do you track down which campaign had the biggest impact?
Sales and marketing teams try to answer this question by using a metric called incremental sales. This key performance indicator (KPI) helps you compare the sales generated by a specific initiative to your company’s overall sales.
Here’s a primer on how to define incremental sales and leverage them for overall revenue growth. You’ll learn how to calculate this metric, what factors can impact results, and strategies to improve incremental sales across your marketing campaigns.
What are incremental sales?
Incremental sales are the additional sales a business earns as a direct result of a specific marketing campaign, promotional activity, or change to its overall sales strategy. The incremental sales metric represents the extra sales lift above and beyond what the business would have sold anyway.
Here’s an incremental sales example. Suppose an ecommerce clothing boutique runs a specific one-week promotion to boost sales of winter jackets. Based on historical data, the boutique typically earns $7,000 in total revenue during a normal week without any special promotion. During the specific marketing campaign, the total sales volume reaches $10,500. This indicates that these specific marketing efforts netted $3,500 in incremental sales.
Why measure incremental sales?
Measuring incremental revenue helps reveal the true impact of a specific business initiative so a business can learn whether its marketing investment is producing desired results. Here are some reasons sales and marketing teams turn to incremental sales figures to help them determine this:
Measure marketing effectiveness
Incremental sales revenue is one of the main key performance indicators (KPIs) that marketing teams use to assess which marketing channels, advertisements, or sales tactics are the most effective at driving new business.
Evaluate sales strategies
Like marketing professionals, sales professionals make incremental sales calculations to measure the additional sales generated from specific tactics like upselling programs, cross-selling efforts, or a new channel partner.
Study customers
By analyzing which customer segments respond most strongly to an initiative (showing the highest incremental lift), companies can better understand purchasing behavior for their target audience. This data allows for more personalized marketing efforts, and it teaches sales teams which campaigns drive incremental sales and which do not.
Gain more accurate data
Total sales figures can be misleading due to external factors like seasonality or competitor actions. The incremental sales KPI uses testing (like A/B testing or control groups) to establish a causal relationship between a specific action and the sales lift. This helps sales and marketing teams determine whether the observed growth is directly because of the initiative or just a coincidence.
How to calculate incremental sales
The incremental sales formula measures the sales volume variance between a specified sales promotion and typical sales for your company. Here’s what it entails:
Incremental sales = Total sales - Baseline sales
Total sales refer to the complete revenue generated during the specific time period or campaign you’re measuring. Baseline sales (also called base sales) are the estimated amount of sales that would have occurred without the specific promotional activity. This baseline derives from historical sales data, accounting for factors like seasonality or general sales growth trends.
Here’s how you can apply the incremental sales formula to a real-world scenario:
1. Set a sales initiative to track. Specify the promotional activity (e.g., an email campaign, a discount offer, a new ad spend) and the exact period during which you’ll measure the results. The more specific, the better—precision is how you can tell which initiatives are yielding the most conversions.
2. Assess the total sales from your chosen initiative. Collect the total sales revenue generated during the initiative’s defined time frame.
3. Calculate baseline sales. Estimate the sales that would have occurred had you not implemented the new initiative. A common way is to use historical data from a comparable, recent period when you didn’t run a similar promotion. Adjust for any known trends or seasonality.
4. Apply your data to the historical sales formula. Subtract your calculated baseline sales from your total sales. The result is your incremental sales.
If you don’t have reliable historical sales data to use as a baseline number, you can still accurately measure incremental sales by using a control group.
For instance, if you’re running a marketing test, use the sales from a control group of customers who you didn’t expose to your new advertising campaign. Use that figure as your baseline sales and plug it into the incremental sales formula.
Factors that can affect sales volume
As you attempt to calculate incremental sales, you may find that internal and external factors other than your campaign can affect sales volume. Watch for these complicating factors:
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Internal communication. Lack of coordination between marketing and sales teams can lead to skewed results. This could include the sales team running a major discount promotion at the same time the marketing team is testing a new full-price ad campaign.
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Competitor activity. A major competitor launching an aggressive promotional campaign or introducing a new product can depress or inflate your sales.
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Staff turnover. Unexpected changes in key personnel, particularly among high-performing sales representatives, can cause volatility in the company’s sales figures.
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Unforeseen events. Extenuating circumstances like supply chain disruptions, economic downturns, or natural disasters can suddenly limit production, demand, or the ability to sell, influencing your incremental sales data.
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Changes to products, services, or SOPs. Simultaneous internal changes, such as a price adjustment or a change in standard operating procedures (SOPs), can independently boost or reduce actual sales. They can alter demand, conversion rates, and operational efficiency, making it harder to isolate what’s driving sales up or down.
Any of these factors can inflate or deflate your numbers, making it look like your campaign succeeded or failed when something else was actually responsible. Identifying these factors early helps you separate signal from noise—so you credit the right campaigns or stop the wrong ones before wasting your budget.
How to improve incremental sales
- Focus on high-impact marketing channels
- Target the right audience
- Optimize the customer journey
- Adjust your marketing strategy based on hard data
- Focus on profitability
- Address incremental sales challenges
Here are some incremental sales best practices to boost your company’s sales and drive growth:
Focus on high-impact marketing channels
Determine which marketing channels (e.g., social media ads, email, paid search) deliver the highest net incremental sales total. A tool like Shopify Analytics can help you compare channel performance based on conversion rates, cost per acquisition (CPA), and profit margins rather than impressions or clicks alone.
Redirect your marketing budgets to the highest-performing channels. Stop funding marketing activities that, while generating some returns, don’t create significant sales volume. You may have to upend your usual marketing strategy to do this.
Target the right audience
To target the right audience, analyze customer data to identify which segments respond best to different messages or offers. A tool like Shopify Audiences can help you pinpoint behaviors, demographics, and interests aligned with your goals. The more precise your targeting, the less you waste on unqualified leads—and the more likely your campaigns are to generate repeat buyers.
Instead of broad campaigns, try controlled experiments like A/B testing to confirm your promotional campaigns are attracting new customers or inspiring existing customers to buy more. This helps you focus your marketing spend on the target audience segments that show the highest incremental lift.
Optimize the customer journey
Streamline your entire sales process to reduce friction from lead to conversion. While the specific marketing campaign will bring in the incremental sales leads, an intuitive, efficient customer journey is what will close the deal. A smoother process leads to higher actual sales and more paying customers. Here are a few ways to do that:
Streamline your checkout page
Minimize the number of steps it takes to complete a purchase. Tools like Shopify Checkout or Hotjar can help identify pain points, such as slow load times, too many form fields, or unclear error messages. Offering guest checkout, multiple payment options, and autofill capabilities can also improve conversion rates.
Incentivize your sales managers
Offer performance bonuses tied to customer retention or average order value rather than just new sales. Prioritize behaviors that lead to upselling and cross-selling. When your team’s goals align with your customer’s success, the journey becomes smoother.
Automate repetitive steps
Shorten the sales cycle by setting up automated email sequences or chatbots to nurture leads, answer FAQs, and schedule follow-ups automatically. This keeps potential customers engaged without creating more work for you.
Adjust your marketing strategy based on hard data
Monitor incremental sales continuously, not just for a single campaign, but as a core metric for your entire marketing strategy. Regularly compare the incremental sales total against your business’s average annual sales growth.
If a campaign’s incremental sales are low, quickly adjust the creative, offer, or target customers. Your agility in responding to current marketing trends will be essential to improving incremental sales.
Focus on profitability
Go beyond your topline incremental sales revenue and always calculate the actual profit generated after expenses. A campaign might drive high incremental sales but result in low profit due to excessive cost (e.g., steep discounts or high ad costs).
Profit reveals whether your campaigns are actually generating sustainable growth or simply inflating sales through costly tactics. You may find that profit is a more important incremental sales measure for keeping your business sustainable than revenue alone.
Address incremental sales challenges
As you track incremental sales outcomes, you may find that it’s not possible to directly link every dollar to a sales or marketing initiative. For the best possible accuracy, leverage sales and marketing attribution tools to help you determine what counts as a sale influenced by a specific set of marketing activities. This will help you build toward sustainable sales growth.
For instance, Shopify Analytics can help you understand how different channels (like email, social, or search) work together to drive conversions, rather than crediting only the final click. Over time, this holistic view helps refine your marketing mix, so you know where to double down and where to cut back for maximum return on investment (ROI).
Incremental sales FAQ
What is meant by incremental sales?
Incremental sales refer to the additional sales or revenue generated as a direct result of a specific marketing action, promotion, or business change, beyond what would have occurred otherwise.
What is the difference between total sales and incremental sales?
The difference between total sales and incremental sales is that total sales represent all revenue generated in a period. Incremental sales reflect only the extra sales directly caused by a specific campaign or action.
How do you calculate incremental sales?
You calculate incremental sales by subtracting expected (baseline) sales from the actual sales achieved during or after the campaign or action.
How do you increase incremental sales?
You can increase incremental sales by launching targeted marketing campaigns, improving promotions, and enhancing customer engagement to drive purchases beyond normal demand.
