How To Calculate Sales Lift (With Formula and Examples)

Sales lift = (actual sales amount) - (baseline amount)

Sales lift is an important metric to monitor during promotional events and advertising campaigns. Understanding sales lift allows businesses to determine the most effective strategies for driving sales and generating additional revenue. This metric is also a valuable tool for measuring the percentage of sales increase. In this article, we discuss what sales lift is, why it's important to track and how to calculate it, with examples to guide you.

What is sales lift?

Sales lift measures increases in sales when businesses run promotional campaigns during a specific time period. This metric compares sales that occur during marketing promotions to sales that are a normal part of everyday business during a specific period. When sales increase beyond original baselines because of promotional activities, this creates the lift factor that companies use to analyze the efficiency of marketing and advertising efforts.

Additionally, sales lift can help businesses determine which promotional strategies are most effective in driving sales. With this data, organizations can make more informed decisions about when to run promotional events and what approaches to use to engage with customers.

Related: Steps for Measuring Marketing Effectiveness

Why is sales lift important?

Measuring sales lift is essential for understanding how marketing tactics influence sales that otherwise may not occur without promotional advertising. This information is crucial for advertising and promotional teams to make decisions regarding in-store strategies, online marketing communications and overall sales performance. There are several more reasons to measure sales lift, including:

Budget planning and analysis

Evaluating the sales lift that occurs during a promotional event gives marketing teams more insight into the costs of organizing and launching successful campaigns. Sales lift can show you which promotional tactics to budget for and which processes require additional analysis for improvement. Measuring sales lift can also help teams analyze customer markets. Knowing which market segments respond most to promotional activities allows teams to plan budgets that allocate more funds to these groups.

Marketing segmentation

Promotional activities reach specific audience demographics, and sales lift can help teams evaluate the customer profile most likely to respond to sales promotions. Understanding which demographics promotional campaigns attract can help you modify and improve future campaigns. Using sales lift according to demographics means advertising professionals can tailor promotional materials and events to specific market segments.

Financial analysis and forecasting

The incremental sales lift is also essential to financial evaluation. Marketing teams plan budgets and allocate company revenue to the strategies and activities they use for reaching customers and achieving sales. Therefore, sales lift can be a valuable tool for measuring returns on marketing spend. Evaluating return on investments in marketing is important for analyzing how these costs affect overall profitability. In this way, sales lift can give more information about the performance of marketing strategies that businesses invest in, resulting in more accurate forecasts for future investments.

Related: What Is ROI in Marketing?

What is the 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.

• Baseline amount: The baseline sales amount represents the normal revenue a business would generate without a promotional event during the same period of time.

• Sales lift: The incremental or sales lift is the difference between the actual and baseline sales amounts. You can also represent this as a percentage of increase in sales.

Related: What Is Percent Increase Formula? (With Examples and Formulas)

How to calculate sales lift

Use the formula and the steps below to calculate sales lift:

1. Calculate the total amount in sales for the period

Determine the total amount in sales at the end of your promotional event or time period. Find this amount by taking the total amount your company earns in revenue only for the duration the promotional event occurs. For instance, assume a retail marketing team plans a promotional event to run for 30 days. At the end of the 30-day period, the team calculates $13,000 in promotional sales. Using this value, the team applies the sales lift formula:

Sales lift = (actual sales amount) - (baseline amount) =

Sales lift = ($13,000) - (baseline amount)

2. Determine the baseline sales amount for the same period

Businesses can measure baseline sales amounts using various methods. However, teams often use the actual sales numbers from previous time periods, as these sales amounts often represent the average revenue companies generate during normal business activities. Using the previous example, the marketing team analyzes past revenues to determine the baseline amount. With a baseline of $10,500 for a normal 30-day period, the team substitutes this value in the formula:

Sales lift = (actual sales amount) - (baseline amount) =

Sales lift = ($13,000) - ($10,500)

3. Subtract the baseline amount from the actual amount

When you have your actual baseline amounts, subtract to find the sales lift amount. You can then use this metric to determine the percentage of sales increase for the promotional period. For example, using the values from the previous examples, assume the marketing team determines the sales lift as:

Sales lift = (actual sales amount) - (baseline amount) =

Sales lift = ($13,000) - ($10,500) = $2,500

Related: How To Calculate Difference in Percent Changes

4. Find the percentage of sales increase

To determine the percent increase in sales, you can divide the sales lift by the baseline amount and multiply the result by 100. This results in a percentage. Assuming the example marketing team has a sales lift of $2,500 and the baseline is $10,500, you can find the percentage of increase as:

Percent of sales increase = (sales lift) ÷ (baseline amount) x 100 =

Percent of sales increase = ($2,500) ÷ ($10,500) x 100 =

Percent of sales increase = (0.24) x 100 = 24%

5. Evaluate the results

Evaluate results based on the marketing and sales goals of the promotional campaign. For instance, if the example marketing team previously forecasts an increase of 25%, the sales lift of $2,500 indicates the promotional sales are just under the team's objective. Marketers can then use this assessment to determine more effective strategies for future campaigns. Evaluating sales lift can give you the information necessary to integrate successful tactics that add to your organization's profitability.