How to optimize your promotion and incentive budget: pay only for the sales you add
Resources · Guide
Optimizing your promotion and incentive budget means moving money from rewards that don't change customer behavior to the ones that drive incremental sales. You measure it with a control group: the cost of each promotion is divided by the incremental sales it produced, not by total sales. At Qurable, Qurable Autopilot's agents propose that reallocation and your team approves it.
- 01
Measure
Control group
- Incremental sales per promotion
- Cost on the ledger
- 02
Compare
Cost per incremental sale
- By segment
- By reward type
- 03
Reallocate
Toward what sells
- Agents' proposal
- Your team's approval
In production
Autopilot agents work on the platform Qurable already runs in production.
- ~150 msEngine at paymentApproved rules only, no AI in the path
- ~3,000Requests per secondSustained in production
- 18MEnd usersIn brands that run on Qurable
- ISO 27001SecurityCurrent certification
Key takeaways
- A promotion that reaches someone who would have bought anyway is cost, not sales: half the problem is who gets it.
- The metric that ranks your budget is cost per incremental sale, measured against a control group.
- Points, cashback, and discounts perform differently by customer: test them in parallel and move budget to the winner.
The method
Six steps so every promotion dollar sells.
It works for promotions, cashback, points, and supplier incentives. What changes is where the money comes from, not how it's measured.
Measure each promotion against a control group
Part of the audience doesn't get it. The difference in purchases between the two groups is the sales the promotion actually added.
Calculate cost per incremental sale
The cost of the promotion (discount, cashback, or points at point value) divided by incremental sales, not by total sales.
Look at net margin, not just sales
Gross margin on the incremental sales, minus your own share of the reward cost. A promotion that sells more but leaves less margin doesn’t get repeated.
Test rewards in parallel
Points, cashback, and discounts, each with its own control group and by segment. The one that sells the most per dollar gets more budget.
Set caps per campaign
Budget and caps approved by your team, per campaign and per customer, so a successful promotion doesn't eat the month's budget.
Bring in supplier and merchant funding
Co-funded promotions record what each brand put in, so your own cost per incremental sale goes down without cutting the reward.
Metrics
The metrics that rank your budget.
Use them in your monthly promotion review. The second column says what to look at.
| Metric | What to look at |
|---|---|
| Incremental sales | The difference in purchases between people who got the promotion and the control group. |
| Cannibalization rate | The share of promoted sales that would have happened anyway, without the promotion. |
| Cost per incremental sale | The promotion's cost divided by incremental sales. It's the metric for comparing promotions with each other. |
| Point value and liability | What each issued point costs and how much is still pending redemption, so you don't underestimate the cost of points. |
| Third-party contribution | The share of the reward each supplier or merchant paid, recorded by campaign. |
| Own cost per incremental sale | Cost per incremental sale after third-party contributions. |
The difference
A budget split out of habit and one that follows incremental sales.
The budget can be the same. What changes is how it's measured and where it moves.
| Out of habit | By incremental sales | |
|---|---|---|
| How it's measured | Total sales during the promotion | Incremental sales against a control group |
| Who gets it | Everyone, including people who would have bought anyway | The segments where the promotion changes behavior |
| Which reward | The same for everyone | Points, cashback, or a discount, based on what performs in each segment |
| When it's corrected | At quarter close | Every week, with the agents' proposal |
| Who pays | The brand, in full | The brand plus the suppliers or merchants that co-fund |
With Qurable
Budget moves toward what sells.
Qurable measures every promotion against a control group, records its cost on the ledger, and Qurable Autopilot's agents propose where to move the budget. Your team decides.
Qurable Autopilot
The agents read each promotion's cost per incremental sale and propose the reallocation.
See Qurable AutopilotPromotion engine
Complex promotions at the register, in the app, and online, with caps per campaign and per customer.
See the promotion engineCo-funded promotions
Each supplier's or merchant's contribution, recorded by campaign.
See co-funded promotions
FAQ
What people ask about promotion budgets.
How it's measured, how it's reallocated, and who decides.
Measure each promotion against a control group, calculate its cost per incremental sale, and move budget toward the promotions that sell the most per dollar spent. With caps per campaign, a successful promotion doesn't eat the month's budget.
With a control group: part of the audience doesn't get the promotion, and the difference in purchases between the two groups is the sales the promotion added. Total sales during the promotion don't show it, because they include people who would have bought anyway.
Take the incremental sales measured against the control group, calculate their gross margin, and subtract your own share of the reward cost, meaning whatever the supplier didn’t fund. If the result is negative, the promotion sells more but loses money: lower the reward, narrow the segment, or bring in a supplier to co-fund it.
It depends on the customer and the moment. Test them in parallel, each with its control group and by segment, and move budget to the one that drives the most incremental sales per dollar.
Stop paying for rewards that reach people who would have bought anyway, and move that budget to the segments where the reward changes behavior. Before cutting, test against a control group to confirm repeat purchases don't drop.
Through co-funded promotions: the supplier or merchant pays part of the reward, and the ledger records what each one put in by campaign. That lowers your own cost per incremental sale.
Your team. Qurable Autopilot's agents read the results and propose the reallocation with its estimated cost and impact; a person approves, adjusts, or rejects it.
Last reviewed
Further reading
Keep reading about promotions and return.
How it's measured, what a point costs, and who co-funds.
- ConceptAutonomous loyalty
Agents propose, your team decides.
- GuideMeasuring a loyalty program
Incrementality, cost, and ROI.
- GuidePoint value
How to calculate what each point costs.
- GuideMerchant-funded cashback
How merchants fund rewards and how it’s settled.
How much of your promotion budget really sells?
In a short meeting, we show you how each promotion is measured against a control group and what reallocation the agents would propose.