Optimising Marketing Spends & Promotions using TrueGradient

For most CPG and commerce brands, promotions are both a growth lever and a margin trap. Discounts can spike demand, but without precision they often lead to over-spending, post-promo demand crashes, and diluted margins.

This is exactly where promotion optimisation becomes a strategic advantage—when every price change is simulated, measured, and aligned to business outcomes like unit lift, revenue lift, and margin lift.

Below, we break down how modern promo planning—using forecast intelligence and scenario simulation—helps brands unlock maximum value from marketing spends.

The Problem with Traditional Promo Planning

Most promotion decisions still rely on:

• Historical averages (“last year this worked”)
• Flat discount rules across SKUs
• Gut feel from trade or marketing teams
• Post-fact analysis with no ability to course-correct

The result?

• Promotions that grow units but destroy margins
• Revenue spikes followed by post-promo deflation
• Working capital locked in excess inventory
• No clarity on which promos actually worked

A Smarter Way: Forecast-Driven Promo Optimisation

The dashboard above shows how promo planning changes when forecasting, price elasticity, and scenario planning come together.

What’s happening in the chart?

• Blue line → Base demand forecast (no promotion)
• Light blue dotted line → Promo lift during the promotion window
• Green line → Post-promo demand normalization
• Orange line → Price changes applied during the promo

This isn’t just reporting—it’s forward-looking simulation.

Promo Lift: Measuring the True Incremental Impact

Promo lift answers one critical question:

How much demand did the promotion truly add beyond baseline demand?

In the example shown:

• A targeted price reduction (~20–27%) triggers a sharp uplift in units during the promo window (light blue line).
• The model isolates incremental units rather than raw sales, avoiding the common trap of over-crediting promotions.

Why this matters

• You fund promos with marketing dollars and margin
• Incremental lift tells you if those dollars actually worked

Post-Promo Deflation: The Hidden Cost Most Teams Miss

Now look closely at what happens after the promo.

The green line highlights post-promo demand behavior:

• Demand doesn’t immediately revert to baseline
• In some cases, it dips below normal levels (demand pulled forward)

This is post-promo deflation—one of the most expensive blind spots in promotion planning.

Without modeling this:

• Teams overestimate promo ROI
• Supply planners over-build inventory
• Finance sees margin erosion weeks later

True optimisation prices this effect in advance.

From Discounts to Decisions: Scenario-Based Optimisation

Instead of asking:

“Should we run a 20% discount?”

The system asks:

• What happens to units, revenue, and margin if we run it?
• What if we run it for fewer weeks?
• What if we change depth but protect margin?
• Which scenario gives the best trade-off?

The result (from the scenario shown):

• Unit lift: +5.2K (+66.9%)
• Revenue lift: +$108.5K (+32.2%)
• Margin lift: +$2.9K (+1.66%)

Not all promos should maximize units.
Some should maximize profit.
Some should clear inventory.

The key is choosing deliberately.

Optimising Marketing Spends with Confidence

When promotions are simulated before execution:

• Marketing spends are allocated where elasticity is highest
• Price cuts are justified with quantified upside
• Supply and finance teams plan with the same numbers
• Post-promo surprises disappear

Promotions stop being a gamble and start becoming a repeatable growth engine.

The Big Takeaway

The brands that win with promotions don’t discount harder.
They discount smarter.

By combining:

• Demand forecasting
• Price elasticity
• Promo lift measurement
• Post-promo deflation modeling
• Scenario-based optimisation

…marketing spends turn into predictable drivers of unit growth, revenue growth, and margin expansion—not trade-offs.

In a world of tight margins and volatile demand, that’s not just optimisation.
That’s a competitive edge.