Incremental Revenue

Incremental revenue is the extra income generated by your personalization, marketing, or promotional campaigns, above and beyond what would have occurred in a control (untreated) group.

For example, in an A/B test, if your new email nurture drives $10,000 more than the standard version, that $10,000 is your incremental revenue.

Why Measure Incremental Revenue?

Incremental revenue lets you measure how much additional value your experiment or personalization actually contributed, separating signal from noise.
By tracking incremental dollars from each campaign, you can focus resources on the activities that directly grow your bottom line, not just vanity metrics.
Marketers use incremental revenue to validate A/B tests, compare strategies, and demonstrate the real financial impact of data-driven campaigns.

Incremental Revenue vs. Incremental Cost vs. Incremental Profit

Metric	What It Measures	How It’s Calculated	Example	Why It Matters for Marketers
Incremental Revenue	Extra income earned from a campaign, product change, or added customers	Additional sales (or conversion revenue) in the test group minus the control group	Email campaign drives $20,000 above baseline monthly sales	Shows the real financial effect of marketing and personalization
Incremental Cost	Additional expenses incurred to achieve more revenue	Additional cost required to run a campaign or produce more units—typically a change in costs between two scenarios	Advertising brings $3,000 in extra spend, or production costs rise by $5,000	Helps set budgets and analyse ROI or cost efficiency
Incremental Profit	Net gain after subtracting incremental cost from incremental revenue	Incremental Revenue minus Incremental Cost	$20,000 incremental revenue – $3,000 incremental cost = $17,000 incremental profit	Ultimate measure of profitability and decision-making for marketing spend

FAQs

Why use incremental revenue in A/B tests?

Incremental revenue measures the net new revenue generated by a campaign or personalization effort, isolating the true impact of your changes. Unlike raw conversion rates, it shows the actual financial effect of an experiment, helping marketers justify optimizations and budget allocation. For practical examples of tracking revenue from personalization, see Insider One’s guide on tracking ROI of personalization experiments.

Can incremental revenue be negative?

Yes, if your test campaign performs worse than the control, incremental revenue will be negative. This signals that the change reduced revenue and should be reassessed before a full rollout.

Does incremental revenue apply to all marketing channels?

Yes, incremental revenue can be measured across web, email, SMS, mobile apps, and other digital touchpoints, provided your analytics system can track campaign attribution accurately. This lets you compare performance across channels and prioritize investments effectively. For guidance on multi-channel tracking and optimization, see marketing automation workflows.

Incremental Revenue

Why Measure Incremental Revenue?