Final answer:
A What-If analysis is used to simulate a promotion's potential impact on customer retention. It examines changes in demand factors and predicts the resulting effects on business metrics.
Step-by-step explanation:
To analyze the impact of a promotion on retention before initiating the promotion in the system, you would use a What-If analysis. This type of analysis allows you to simulate different scenarios and predict their effects on your business metrics, such as customer retention. The What-If analysis will enable you to examine how a change in a demand factor, such as a promotion, might influence customer retention rates. In conducting the What-If analysis, you consider how the promotion could affect consumer behavior and how that, in turn, might impact the demand for your product or service. Essentially, you're evaluating whether the economic change due to the promotion aligns more with altering demand or supply.