Incremental revenue refers to the increase in revenue that a business experiences as a result of implementing specific strategies, such as running a marketing campaign, launching a new product, or expanding into a new market. It helps measure the effectiveness of such efforts by comparing revenue before and after the strategy is implemented. For example, if a company generates $10,000 in revenue from normal operations, and after a marketing campaign, the revenue increases to $12,000, the incremental revenue from the campaign is $2,000.

Businesses analyze incremental revenue to ensure that their strategies are cost-effective and lead to profitable growth. It is also used to calculate metrics like ROI (Return on Investment). By understanding incremental revenue, companies can better allocate resources and make data-driven decisions. This concept is crucial for financial planning and analysis, as well as in evaluations of month-end and year-end business performance.