Incremental revenue is a metric used for tracking A/B testing campaigns. In A/B tests, you have an existing version called the control group and the personalization is a variation of it. Incremental revenue metric gives you the net revenue generated from personalization over the control group. It’s usually expressed in monetary terms- as an absolute dollar(currency) amount over the benchmark value.
Importance of Incremental Revenue:
In any industry, guesswork can only get you limited results. You will need data-backed A/B tests to understand your audience and interpret how they respond to your messages. A/B testing helps you determine what title, content, image, video, etc works best for your audience and is particularly useful for personalized messaging.
To know the ROI from your personalization efforts, especially while doing A/B tests, you need to know the actual revenue generated from a particular personalization campaign versus the control group version. Incremental revenue is the metric that gives you a clear picture of this value by quantifying the extra revenue generated from personalization against a case where there was no personalization used.