How to use the coupon promotion ROI calculator
What decides a promotion is not total revenue but incremental revenue. A discount handed to someone who would have bought anyway adds no revenue and is pure cost. This calculator therefore keeps total order value and incremental revenue clearly apart in the labels, and counts the full discount on redeemed coupons plus any fixed cost as the investment.
The chain is: coupons issued × redemption rate → coupons redeemed; × average order value → total order value; × discount rate → total discount cost. Adding fixed cost gives the investment, and incremental revenue minus investment gives the net gain. The wasted-discount line shows how much of that investment went to orders you would have had anyway.
The break-even incremental share tells you what portion of orders has to be genuinely new for the promotion to pay for itself. If your real incremental share is below it, the promotion loses money. To work on margin instead of revenue, enter contribution per order in place of average order value.
Frequently asked questions
Comparing against a control group that received no coupon is the most accurate route. Without an experiment, take the average order count from a comparable pre-promotion period as the baseline and treat only orders above it as incremental.
Because discounts given to non-incremental orders are money that really left the business. This tool counts the full discount as investment and shows separately how much of it went to people who would have bought anyway.