Sensitivity Analysis – Calculate Elasticity
What is sensitivity analysis in marketing?
Sensitivity analysis shows how strongly a result — such as profit or ROI — changes when a single input variable like click price or conversion rate varies. It answers which levers have the biggest impact on the result.
Sensitivity Calculator
Example calculation
Profit of $10,000 drops to $8,500 after CPC rises from $2.00 to $2.50. That is a −15 percent change in result against a +25 percent change in input — a sensitivity coefficient of −0.6. Each percentage point of CPC increase lowers profit by about 0.6 percent.
Why testing a single variable isn't enough
This calculation changes a single input variable while holding everything else constant. In practice, several figures change at once — rising click prices often occur alongside a changed conversion rate or seasonality. An isolated view therefore only shows part of the actual risk.
Anyone who wants to test the sensitivity of several variables at once and account for their interactions needs a model that maps these factors together.
👉 Test the sensitivity of several variables at once: try the full tool
How to use sensitivity analysis in practice
- Test variables with high uncertainty and high suspected impact first
- Compare results across several variables to set priorities
- Test worst-case and best-case values, not just small deviations
- Update results regularly, since elasticities shift with market conditions
Sensitivity analysis vs. what-if analysis vs. scenario planning
| Method | Changes | Goal |
|---|---|---|
| Sensitivity analysis | One variable in isolation | Measure the impact of individual levers |
| What-if analysis | A specific assumption | Test the impact of a particular decision |
| Scenario planning | Several variables at once | Compare realistic overall situations |
Frequently asked questions about sensitivity analysis
What does a sensitivity coefficient of 1 mean?
A coefficient of 1 means the result changes by the same percentage as the input variable. A coefficient above 1 shows a disproportionate reaction, a value below 1 an underproportionate one.
What is the difference between sensitivity analysis and scenario planning?
Sensitivity analysis typically changes a single input variable to measure its isolated impact. Scenario planning changes several variables at once to compare realistic overall situations, such as an optimistic or pessimistic scenario.
Which variables are especially suited to sensitivity analysis?
Variables with high uncertainty and a high suspected impact, such as click prices, conversion rates or customer retention duration, produce the most meaningful results.
Why is looking at a single variable often not enough?
Because several figures usually change at the same time in practice and can reinforce or offset each other. An isolated view assumes all other factors stay constant, which is rarely the case.
Can the sensitivity coefficient be negative?
Yes. A negative coefficient shows that the input variable and the result move in opposite directions, for example when rising costs lower profit.
