Key Drivers (URMS)

Key Drivers Dashboard (Base vs. Incremental Decomposition)

Overview

The Key Drivers Dashboard is a specialized analytics view that breaks down your total sales into its fundamental components. This dashboard is often used for syndicated data training and analysis, as it mirrors the classic decomposition of sales used by NielsenIQ, IRI, and SPINS: separating Base vs. Incremental sales and further dissecting what drives each. It helps answer questions like “What portion of our sales are coming from everyday sales versus promotions? Are we growing because we’re in more stores or because each store is selling more? How effective are our promotions?” By visualizing these components, analysts and business users can quickly grasp how sales are being generated – which is critical for making informed decisions.

Key Concepts in this Dashboard:

• Base Sales: The sales volume you would expect without any promotional influence – essentially your “steady-state” or baseline demand.

• Incremental Sales: The extra sales volume generated due to promotions or other temporary boosts beyond the baseline.

• Distribution: Typically measured as TDP ("Total Distribution Points") or %ACV – how widely the product is distributed in the market (weighted by store size). This drives base sales by expanding availability. Note: Daasity templates use Max % ACV metric since this corresponds with the TDP formula.

• Velocity: Sales per point of distribution ($/TDP or $/ACV or Avg $/S/W), indicating how well the product sells where it is available. This also drives base sales – higher velocity means more sales per store.

• Promotion Support: The level of promotional activity, e.g. the percentage of time or % of sales on promotion, and presence of promotional tactics (feature ads, displays, price cuts). More support tends to generate incremental sales.

• Promotion Efficiency (Lift): How effective promotions are at generating additional sales, often measured as % lift (incremental sales as a percentage of base sales) High lift means promotions are driving a big increase over baseline, indicating efficient promotions.

How the Dashboard is Structured

This dashboard often uses a tree diagram or waterfall chart to illustrate the decomposition:

• Total Sales → Base + Incremental: First, total sales (100%) is split into Base and Incremental components. For example, you might discover that out of 100k units sold, 70k were base volume and 30k were incremental volume from promotions. In percentage terms, perhaps 70% base / 30% incremental. This top-level split tells you how reliant your sales are on promotions. A brand with 30% incremental volume is fairly promotion-driven, whereas a brand with 5% incremental relies mostly on baseline demand. Neither is inherently good or bad, but it frames the discussion: heavy reliance on promotions can be a concern if base sales are weak.

• Base Sales → Distribution * Velocity: The Base portion is then broken down further into its two multipliers: Distribution and Velocity. Conceptually, Base Sales = %ACV Distribution × Velocity × some constant market size. The dashboard might show indices or contributions: for instance, a chart could illustrate that your base sales grew +10% last quarter, coming from a +5% increase in distribution and a +5% increase in velocity. If distribution is flat, then any base growth had to come from velocity (better sell-through), and vice versa. This helps answer: Did we drive growth by getting into more stores, or by selling more per store? If you see your distribution hasn’t grown but base sales are up, it means your velocity improved – perhaps due to better merchandising, product quality, or consumer demand. On the other hand, if velocity is flat but base grew due to distribution gains, your product is performing the same in each store, but you have more stores – an opportunity still exists to improve velocity. It’s common in CPG that distribution drives a large portion of growth, but sustainable brands also steadily increase velocity over time.

• Incremental Sales → Promo Support * Promo Efficiency: The Incremental portion is broken down into two factors: how much promotional activity you had, and how effective it was. Promotional Support can be represented by metrics like %ACV on Promotion (the percentage of stores’ ACV where the product was on deal at any time) or % Volume on Deal (the percent of total volume sold on promotion). For example, you might see that 20% of your volume was sold on promotion (meaning 20% of units were at a discounted price or with merchandising). Promotion Efficiency is shown as % Lift (incremental volume divided by base volume, in percent). This indicates how effective those promotions were. If you had a lot of promotions (high support) but low lift, it suggests inefficiency – perhaps promotions were too shallow or not compelling, or you promoted in periods where you’d have sold well anyway (so a lot of the volume was “subsidized” volume rather than true incremental gain). Conversely, if you achieved a high % lift with modest support, your promotions were very efficient (each promo drove significant extra sales). The dashboard might visualize this as, say, Incremental Sales = Promo Volume * Lift%, or show side-by-side comparisons of lift vs support across different periods or products.

• Decomposition Tree Example: Some versions of this dashboard use an interactive tree where you click on Total, then see Base vs Incremental, and clicking Base shows Distribution vs Velocity contributions, etc. Others might use a series of charts or a waterfall that quantifies the contribution of each factor to YoY growth. For example, a waterfall might start at last year’s sales, then add “+X from distribution gain, +Y from velocity gain, +Z from incremental promotions” to end at this year’s sales. This isolates the effect of each driver on growth.

Using the Key Drivers Insights

• Balance Base and Incremental: A healthy brand usually has growing base sales, supplemented by incremental lifts during promos. If the dashboard reveals that most of your growth (or sales) is coming from incremental promotions, that might be a red flag – you could be “buying” sales through deals rather than organically growing demand. On the flip side, if base sales are strong and incremental is small, you might be leaving opportunities on the table by not promoting enough in a competitive category. There’s no one-size-fits-all target, but generally you want promotions to enhance sales, not be your only source of growth. Keep an eye on Incremental % of Total over time; if it’s climbing, ensure your promotions are driving real new volume and not just pantry-loading existing customers with discounts.

• Diagnose What to Fix: Because this dashboard pinpoints the drivers, it’s actionable. For instance, if base sales are declining and the breakdown shows distribution dropped, then the priority is clear: distribution drives over half of sales variation, so losing distribution will hurt badly. You’d focus on retailer negotiations or addressing supply issues causing distribution losses. If distribution is steady but velocity fell, then you investigate pricing, competition on shelf, or consumer trends affecting units per store. Similarly, on the incremental side: if your promotional lift is significantly lower than industry benchmarks (say your promos only give +10% lift when others get +30%), you may need to improve promo depth or support (e.g., add display or features to get more attention). Or perhaps your promo frequency is too high, causing diminishing returns. If promo support is low (you rarely promote) and incremental sales are low, maybe the strategy has been to minimize promotions – consider if category dynamics allow for that or if you’re missing volume opportunities.

• Educate Stakeholders: The Key Drivers view is also a great educational tool for non-analysts. It visually shows concepts like “base vs incremental” which many business users have heard of but may not fully grasp. For example, you can use the tree to explain: “We sold $10M, of which $8M was base and $2M incremental. That $2M came from running promotions – we sold 25% more than our baseline during those weeks (25% lift). Why? We had promotions in 30% of stores (promo ACV) and cut price by an average 15% (depth of discount) which generated that lift.” By walking through this, cross-functional teams (like finance or marketing) better understand the levers of demand. It also reinforces why certain investments are needed (e.g., spending on trade promotions to drive incremental volume, or expanding the sales team to get more distribution).

• Plan Future Strategies: Knowing your drivers informs strategy. If velocity is your weakness, you might invest in consumer marketing, product improvements, or better shelf placement to boost turns. If distribution is the weakness, work on sales fundamentals (pitching to new retailers, improving supply chain to avoid out-of-stocks). If incremental lift is weak, refine your promotion strategy – perhaps offer a deeper discount occasionally or add in-store displays to augment mere price cuts. The goal is to improve each component in a balanced way: grow your base by distribution and velocity, and make every promotion count with solid lift.

Overall, the Key Drivers Dashboard takes what could be a complex regression analysis and makes it accessible in a visual, interactive way. It’s like a diagnostic report for your brand’s health. By routinely checking this dashboard, you ensure you understand how your sales are being made – knowledge that is crucial before you decide what to do next (be it more promotions, a distribution drive, pricing changes, etc.).