Incremental Marketing

What Is Incremental Marketing?

Incremental marketing is the gradual increase in advertising expenditures and product exposure over a period of time, based on benchmarks. Incremental marketing requires a company to break up a long-term marketing plan into smaller components and assign milestones that must be met before further marketing funds are committed. The success of each of the components determines if the marketing campaign continues or is halted.

Key Takeaways

  • Incremental marketing is a gradual, achievement-based approach to marketing in which ad costs and product exposure increase as certain important milestones are reached.
  • A company taking this approach to marketing will break down goals by time period or by exposure level and will determine if goals have been reached before subsequent steps are taken.
  • Incremental marketing can be particularly effective when used by companies that have smaller marketing budgets, or that are not able to invest substantial resources all at once.
  • Incremental marketing is also used by larger companies that have the funds for a blow-out campaign but would rather test the waters first with a product that is new to consumers, or potentially risky in a particular business environment.
  • Many companies A/B test during the initial incremental marketing stages.

Understanding Incremental Marketing

Incremental marketing as an overall strategy is helpful for companies that are not ready to jump into a large-scale marketing campaign or do not have the resources to do so. It allows smaller companies to deploy funds as they become available and only if the company sees results from each step. It also is a useful strategy when promoting a product or service that is unfamiliar to the consumer because of the greater risk of consumers rejecting the goods or services.

Incremental marketing may also be used by more established companies that do not want to place a big bet on marketing a product or service that may not be readily received by consumers or may not be well-suited to prevailing market conditions.

Incremental Marketing Process

An incremental marketing strategy may be especially useful when employed in the launch of new products, and especially when used by smaller companies. The initial and long-term success of a product or company may depend on the execution of a well-planned and executed marketing strategy, and by extension the size of a marketing budget.

But given that marketing budgets are finite, new products are not guaranteed to be successful, and smaller companies may not have the resources to commit to a massive (and therefore risky) marketing campaign all at once, an incremental marketing strategy may be employed.

In such a case, money for marketing may be allocated when it is available and when it makes sense based on the successful completion of previous marketing tasks, when certain benchmarks or milestones are met, and when predetermined sales objectives are achieved.

Each new marketing campaign activity only begins when a previous objective has been met. At each stage, the company may evaluate whether a marketing campaign is worth continuing and whether it should be suspended, altered, scaled back, or ramped up. An incremental marketing strategy gives advertisers the opportunity to determine whether customers are receptive to and will remain receptive to their product or service.

By breaking marketing rollouts into digestible chunks, companies are able to tweak campaigns based on the performance of the previous rung. Doing so also frees up significant marketing capital versus using it all at once.

How to Implement an Incremental Marketing Strategy

Implementing an incremental marketing strategy is fairly simple. Most of the work for the strategy is done in the planning stages, where a marketing executive and other department heads will determine the scope of the strategy. The strategy will be broken down into levels with "triggers." These triggers can be anything from sales increases, budget increases, timelines, or other time or performance indicators.

Once the plan is approved and the triggers/levels of the strategy are discussed, a company will usually implement the plan. While those marketing efforts are underway, the marketing team may or may not decide on working on the next step of the rollout. However, this should only be done if the trigger or performance indicator will be met.

Some companies will choose to run a single campaign. What is also common is the testing of multiple campaigns at the same time during the first stage. If the performance objective is met, the company will choose the most successful of the tested options and implement only that option at the next stage.

How to Measure Sales From Incremental Marketing

Measuring sales from incremental marketing should be simple if you are a web-based company running internet ads. Those are easily tracked and you can see their impact almost immediately. If you are running ads such as billboards or TV spots, you will need to watch your sales numbers, website visits, or organic visitors.

What you are essentially doing is comparing the incremental marketing strategy on one hand versus your product or consumer patterns on the other. Although it may be complicated at times, especially if you are a large company with a diverse marketing plan, a pattern should emerge showing a correlation between your marketing strategy and your bottom line.

How Do You Measure Incrementality in Marketing?

Incremental marketing is measured by customer increases (or decreases) in key metrics like website conversions, unique visitors, spending changes in existing customers, returning customers and of course, bottom-line sales. Each step of the marketing campaign is measured as its own campaign which is later compared to the success of the campaign as a whole.

What Does Attribution Mean in Marketing?

Marketing attribution is the procedure taken when companies measure the marketing channels the customer took to buy your product. A more simple explanation of marketing attribution is when a company tracks how a customer arrived at its product.

What Is a Good Incremental ROAS?

Return on advertising sale (ROAS) is a simple formula and is the difference between your targeted group revenue and control group revenue, which sees no ads, divided by ad investment. A good incremental ROAS is one that is over 100% as this means the targeted campaign is working on the customer and is producing results.

The Bottom Line

Incremental marketing is a popular strategy that companies use to maximize the impact of their advertising spending while at the same time minimizing exposure. By scaling a marketing strategy based on performance objectives, a company is only spending on marketing once they are ready to take their campaign to the next level.

Article Sources
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  1. Salesforce. "Marketing Attribution."