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Worked Example: Coupon Orders and Natural Buyers

Reconcile profitable coupon orders with a campaign loss by separating customers who would buy anyway from genuinely additional orders.

By PriceAndProfit Editorial Updated

Consider 200 orders using a $10 coupon against an $80 regular price. The included variable cost is $40 per order, and campaign setup costs $500. Suppose a controlled comparison supports a planning estimate that 50 of the orders are genuinely additional and 150 would have happened without the offer. The arithmetic tests that explicit assumption; it does not establish the estimate from coupon records alone.

Campaign lift = 50 × ($80 − $40) − 200 × $10 − $500 = −$500
Hypothetical inputs and independently checked arithmetic
StepCalculationAmount
Promoted order revenue 200 × $70 $14,000
Included variable cost 200 × $40 −$8,000
Campaign setup Separate campaign spending −$500
Contribution with campaign $14,000 − $8,000 − $500 $5,500
Without-campaign contribution 150 × ($80 − $40) $6,000
Incremental contribution $5,500 − $6,000 −$500
Additional orders for recovery $2,500 / $40 62.5 expected orders

Interpret the result

The campaign has positive contribution of $5,500 yet reduces contribution by $500 compared with the stated alternative. That distinction is why a report can show profitable coupon sales while the promotion itself fails to add profit. At least 63 discrete additional orders would exceed the 62.5-order threshold in this example, provided the total remains 200 redemptions and the other inputs hold.

Check before applying the example

Check the observation window and audience composition behind the 150 natural orders. A later repeat order should not be added automatically unless its contribution is supported by a defined follow-up cohort and compared with expected repeats without the campaign. Refunds, extra support and fulfillment bottlenecks can lower the contribution input. If the coupon was already subtracted in net sales, do not subtract it again when reconstructing the full promoted-order income calculation.

Use your own inputs

The calculator uses the same stated decision boundary.

Method reference: OpenStax: Relevant Information for Decisions. Checked October 22, 2026. Relevant future cost and counterfactual comparisons; all commercial assumptions are supplied by the user.

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