Finding Where an Incentive Stops Paying Off

Prepared by Monroe Analytics | A real project from a previous analyst role, described by method only. Company details and figures are left out.

The situation

In a previous analyst role, I led and built the analysis of an incentive that a company offered to help close sales. Each sale carried a credit, and the size of that credit varied a lot from sale to sale. The people funding it wanted to know whether the biggest credits were doing any extra work, or whether money was being spent past the point where it changed anything.

The question

"Where does an extra dollar of incentive stop buying us more coverage?"

What I did

• Looked at the whole spread, not the average. For each product group and each type of sale, I plotted the share of sales covered at each credit level. This shows how quickly coverage climbs and where it flattens.
• Found the flattening point two ways. One method looks for the bend in the curve. The other measures where the curve's rate of change settles down. When two independent methods land in the same area, I trust the answer more.
• Kept the groups apart. Product groups and sale types behave differently, so I did not blend them into one number. The answer for one group was not the answer for another.
• Put a cost on the choice. For each group I compared what was actually paid against what would be paid at a middle level and at the flattening point, so the decision could be made in dollars, not curves.
• Reported the uncertainty. Where a group had too few sales to give a stable answer, I said so.

What it gave the business

A defensible, group-by-group view of where the incentive stopped working, with the trade-offs priced out, so it could be tuned deliberately instead of by habit.

Why it matters for a small business

The same question shows up anywhere you give something away to win a sale: discounts, financing offers, free shipping, loyalty rewards.

Interested in something like this for your business? Book a free 30-minute call: https://calendly.com/titus-christofferson-monroe-analytics/30min