Beyond the Sale Spike: Understanding the True Impact of Promotions on Your Ecommerce Revenue
Think your last promotion was a smashing success because of that impressive revenue spike? Discover the hidden phenomenon that could mean up to 80% of your "promotional sales" were actually full-price purchases you would have gotten anyway—just at a painful discount. Learn the strategic framework smart retailers use to measure the true impact of their promotions and stop the vicious cycle of training customers to never pay full price again.
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When your flash sale or Black Friday promotion ends, do you celebrate the revenue spike without considering what happens before and after?
If so, you might be missing the complete picture of how promotions affect your business. The dramatic revenue jumps during sales events often mask two critical phenomena that impact your actual profitability: the pull-backward effect and the pull-forward effect.
The Illusion of Promotional Success
Most marketers evaluate a promotion's success by looking exclusively at the revenue generated during the sale period. The graph shows an impressive spike, the team celebrates, and everyone moves on to planning the next promotional event.
But this narrow view can be dangerously misleading.
What appears to be new revenue might actually be existing customer purchases that have simply shifted in time—with the added cost of a discount that cuts into your margins. To understand the true impact of your promotions, you need to recognize how they alter natural purchasing behavior.
The Pull-Backward Effect: The Pre-Sale Slump
The pull-backward effect (sometimes called the "sales hangover" or "Black Friday hangover") occurs when customers who would have purchased at full price decide to wait for an upcoming sale.
How It Works
Let's visualize this with a Q4 example leading up to Black Friday:
- Customer 1 would normally purchase in the first week of November
- Customer 2 would normally purchase in the second week of November
- Customer 3 and Customer 4 wouldn't make any Q4 purchases
When Black Friday approaches (last week of November), purchasing behavior shifts:
- Customer 1 waits and purchases during Black Friday at a discount
- Customer 2 waits and purchases during Black Friday at a discount
- Customer 3 makes a purchase they wouldn't otherwise make during Black Friday
- Customer 4 still doesn't purchase anything
At first glance, your Black Friday report shows three sales—a success! But looking closer:
- Only Customer 3 represents a truly incremental sale
- Customers 1 and 2 represent cannibalized full-price sales, now at reduced margins
- Your net gain is just one new sale, not three
The pull-backward effect is most noticeable before predictable, widely-anticipated sales events like Black Friday, Cyber Monday, or annual holiday sales. Some retailers even report seeing purchasing delays starting as early as October, as consumers have been trained to wait for the inevitable November discounts.
The Pull-Forward Effect: The Post-Sale Desert
Less discussed but equally important is the pull-forward effect—the inverse of the pull-backward effect. This occurs when a sale encourages customers to make purchases they would have made in the future anyway, just sooner.
How It Works
Using a post-holiday example:
- Customer 1 would normally purchase in the first week of February
- Customer 2 would normally purchase in the second week of January
- Customer 3 and Customer 4 wouldn't make any purchases in this period
When you run an end-of-year sale:
- Customer 1 purchases during your end-of-year sale instead of February
- Customer 2 purchases during your end-of-year sale instead of January
- Customer 3 makes a purchase they wouldn't otherwise make
- Customer 4 still doesn't purchase anything
Your end-of-year sale report shows three sales, but:
- Only Customer 3 is truly incremental
- Customers 1 and 2 represent future full-price sales pulled forward at reduced margins
- You've effectively traded margin for immediate cash flow
The pull-forward effect is particularly common with unexpected or limited-time "flash" sales. When customers don't anticipate the discount, they're more likely to accelerate future planned purchases rather than delay current ones.
How to Properly Evaluate Your Promotion's True Impact
To accurately measure a promotion's effect on your business, you need to look beyond the sale period itself. Here's a more comprehensive approach:
1. Analyze Extended Time Periods
Instead of just examining the promotional period, compare three time frames:
- Pre-promotion period (equal in length to your sale)
- Promotion period
- Post-promotion period (equal in length to your sale)
For example, if you run a 7-day sale, analyze the 7 days before, during, and after the promotion.
2. Look for Dips on Either Side
- A pre-promotion dip suggests the pull-backward effect
- A post-promotion dip suggests the pull-forward effect
The depth and length of these dips help quantify how much of your promotional revenue was simply shifted from other time periods.
3. Compare Year-Over-Year Performance
Compare the shape of your revenue curve to the same period last year:
- Is the overall curve higher? (indicating growth)
- Does the curve have the same shape? (indicating similar buying patterns)
- Are the pre- and post-promotion periods flat year-over-year without the promotion? (indicating minimal cannibalization)
4. Calculate True Incremental Sales
To find your actual incremental sales:
- Take your total promotional period sales
- Subtract the normal expected sales for that period (based on historical data)
- Subtract the sales deficit from the pre-promotion period (pull-backward)
- Subtract the sales deficit from the post-promotion period (pull-forward)
The result is your true incremental revenue—often much lower than the headline number.
Predicting Which Effect Will Dominate
Different types of promotions tend to trigger different effects:
Pull-Backward Effect Is Stronger When:
- The promotion is predictable (annual sales, seasonal events)
- The discount is significant and well-advertised in advance
- The products are non-perishable and easy to delay purchasing
- Your customer base is price-sensitive and promotion-aware
Pull-Forward Effect Is Stronger When:
- The promotion is unexpected or spontaneous
- The discount is significant but time-limited
- The products have some urgency or seasonality
- Your messaging emphasizes scarcity or limited availability
Strategic Implications for Your Promotion Calendar
Understanding these effects should inform your promotional strategy:
If You're Experiencing Strong Pull-Backward Effects:
- Consider reducing the predictability of your sales
- Test smaller, more frequent promotions rather than a few massive ones
- Implement tiered loyalty pricing to maintain full-price purchases before sales
- Create early-access opportunities to capture revenue before the main sale
If You're Experiencing Strong Pull-Forward Effects:
- Plan for the post-promotion revenue drop in your cash flow projections
- Develop re-engagement strategies for the post-promotion period
- Consider follow-up offers that maintain engagement without deep discounts
- Use the promotional period to build your email list for sustained marketing
Conclusion: The Balanced Approach to Promotions
Promotions will always be an essential tool in the ecommerce marketing toolkit. The key is not to avoid them but to understand their true impact and plan accordingly.
By recognizing both the pull-backward and pull-forward effects, you can:
- Set more realistic expectations for promotional performance
- Better forecast inventory and cash flow needs
- Develop a more strategic promotional calendar
- Preserve margins while still driving growth
The most sophisticated retailers don't just measure what happens during a promotion—they understand how each sale event ripples through their entire revenue timeline, and they plan their promotional strategy with this complete picture in mind.
At Holscher Analytics, we help ecommerce brands develop data-driven promotional strategies that drive genuine growth rather than simply shifting revenue from one period to another. Contact us to learn how we can help you measure and optimize the true impact of your promotional calendar.
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