One framework a week · 10 November 2026
Promotions: lift, dip and rented share
Deals sell now, borrow from later and rent share by the week. Three words to take apart any promotion.
The framework
A price promotion is a temporary discount. Three words take it apart.
Lift: the extra volume while the deal runs. Dip: the shortfall after it, as shoppers use up what they stocked. Rented share: share bought with deals, which lasts only as long as the deals do, so you keep paying to keep it.
Where the lift comes from
Part of the lift is new buyers or switchers. Part is people who would have bought anyway, now paying less. Part is pull-forward: purchases borrowed from next month.
Shoppers stock their pantries on deal and buy less afterwards, so the next quarter dips below normal.
What it does to the numbers
A deal cuts the price on every unit sold on deal, including those you would have sold at full price. So net sales can rise while gross profit falls.
The dip lands in the next quarter's results, which a quarterly target can hide.
What it does to the brand
Frequent deep deals raise price sensitivity and wear down perceived quality. Shoppers learn to wait for the offer.
Share from deals does not build memory, so it fades when they stop. The share gain most likely to last comes from more shoppers thinking of and finding the brand.
Use it with a group
Show a team one deal quarter for a fictional brand and ask them to split the lift into three: new buyers or switchers, people who would have bought anyway, and pull-forward.
Then ask what the next quarter will look like, and which of the three parts is still there a year later.
Sources
- van Heerde, Gupta & Wittink (2003), Journal of Marketing Research: is 75% of the promotion bump due to brand switching?
- Nijs, Dekimpe, Steenkamp & Hanssens (2001), Marketing Science: category effects of price promotions
- Jedidi, Mela & Gupta (1999), Marketing Science