GROSS. — free commercial calculators for UK FMCG brand teams

The Payback

How much incremental volume a promotion needs to pay itself back. Trade spend ROI and break-even in cases for any UK FMCG promo mechanic.

How much incremental volume a promo needs to pay itself back. Break-even in cases, and the uplift that implies on your base.

The workings

Every promo is a loan you make to your own volume. The investment goes out; the payback arrives, or does not, as incremental margin on incremental units. This page divides one by the other and tells you the volume the promo has to shift before it has paid for itself.

The margin used for payback is contribution after landed cost during the promo — not your everyday margin, because during the deal you are usually funding a price cut too. Uplift assumptions are the soft spot: a buyer's uplift forecast is a sales aid, not a measurement. If the payback only works at the top of the uplift range, it does not work.

The rule of thumb the trade actually uses: if a promo cannot pay back inside the deal period plus one buying cycle, it is brand investment, and brand investment should be a decision, not an accident.

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