$2M in product sales. $1.1M in incremental revenue.
Product C reported $2M in first-year sales. Portfolio analysis found that $900K came from Products A and B, leaving $1.1M in net incremental portfolio revenue.
- Reported Product C sales
- $2M
- Internal portfolio switching
- $900K
- Net incremental portfolio revenue
- $1.1M
- What made it incremental
- $600K new-company$500K existing-account expansion
Product sales are not the same as portfolio growth.
Of $2M in Product C sales, $900K (45%) moved from Products A and B. The remaining $1.1M (55%) was net incremental portfolio revenue: $600K from new-company customers and $500K from existing-account expansion.
Internal switching
Product C sales matched by reduced spend in Products A and B. It is new to Product C, but not incremental to the portfolio.
Net incremental portfolio revenue
The increase in total company-portfolio revenue: new-company revenue plus increased total spending by existing accounts.
Trace every dollar to its source.
The matrix distinguishes money that increased the company portfolio from money that only changed products.
Products A and B supplied $900K of Product C sales: $550K from Product A and $350K from Product B. The other $1.1M was incremental.
| Prior source | To Product C | Portfolio classification |
|---|---|---|
| New to company | $600K | New-company revenue |
| Product A | $550K | Internal switching |
| Product B | $350K | Internal switching |
| Existing portfolio expansion | $500K | Existing-account expansion |
| Total Product C sales | $2M | 100% reconciled |
Interpretation boundary: Observed migration is descriptive. Timing and account-level movement can indicate substitution patterns, but do not, by themselves, prove that the launch causally cannibalized Products A or B.
“New to product” can mean three different things.
Genuinely new customer
All $120K is new-to-company revenue and incremental portfolio growth.
Existing customer expands
Total spend rises by $75K, so the Product C revenue is existing-account expansion.
Existing customer switches
Total spend is unchanged. The $100K is new to Product C, but not incremental to the portfolio.
Account-level reconciliation, not product-level attribution.
- Establish the baseline.Construct account-by-product spend before the launch.
- Measure the destination.Identify first-year Product C revenue at the same account grain.
- Reconcile the portfolio.Compare each account’s total spend and product mix across periods.
- Classify movement.Separate new-company revenue, expansion, and internal switching using consistent rules.
This simplified example uses synthetic data for illustration. A live audit would also test timing, cohort definitions, seasonality, acquisitions, currency effects, data gaps, and alternative baseline windows.
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