Sales promotions: definition, examples and strategies

What is a sales promotion?

Sales promotions are targeted marketing efforts used to help motivate customers to buy, usually in a limited timeframe. For small businesses, these types of promotions can help boost short term cash flow, attract new customers, or clear out inventory.

Unlike broader brand marketing strategies, sales promotions are often focused on a specific product, category or service. They may also focus on some kind of special offer which may be time sensitive, which can make them a powerful marketing tactic.

What are the different types of sales promotions?

Sales promotions can come in various forms. This means there are options that can suit many different types of businesses, products or services. 

Each type of promotion can have its own unique benefits. Selecting the right one depends on your business goals. Below we share examples of some popular types of sales promotion strategies.

Discounts

Reducing the price on selected items to help attract customers. These types of sales promotions may particularly appeal to price-sensitive buyers. They can also be a good way to help clear out any inventory that isn’t shifting at its usual price.

Buy one get one

Offering a second product for free or at a discount. This can be an attractive choice for new customers.

Flash sales

Time-limited sales that help create urgency. They can help push quick purchases from customers who may fear missing out on a good deal.

Bundle deals

Encourage customers to purchase more by offering discounts on grouped products – usually in the same category. These promotions can help increase the average order or sale value.

Competitions

A way to help generate excitement and increase engagement with customers. They give people a chance to win a product or service, usually in exchange for information e.g. an email address.

Seasonal sales

At certain times of the year customer demand can increase, particularly around holidays. Consider aligning sales promotions with these dates to help meet demand and encourage people to buy. Be sure to consider business management over the holiday sales season.

Sales promotion example: Black Friday

Black Friday is a great example of a strategic sales promotion opportunity.

Many businesses use this annual shopping event to help attract customers, clear out inventory and compete with other businesses.

Not every business uses the same strategy for Black Friday. And nor should they. It helps to fit your sales promotion with your specific business goals.

If you’re planning a Black Friday promotion, you might think about your objectives up front. They could include:

• increasing short term revenue
• clearing out existing stock of certain items to make way for new ones
• attracting new customers.

When you understand your goals, you can consider the best type of sales promotion to help maximise performance.

You might also choose to run multiple promotions across different products or services. This can help you be even more targeted, attract different types of customers and achieve a range of goals.

Sales promotion considerations

While sales promotions may offer significant benefits, there are a few important things to consider.

Reduced profit margins

Heavy discounts may lower profitability. So, you may want to consider impacts on both revenue and profitability when planning your promotion. 

Customer expectations

Frequent promotions could mean that customers might expect regular discounts. This could impact perceived product value.

Brand perception

Sales promotions may impact brand perception. Customers could see them as a reflection of lower quality.

Being clear on your objectives and planning any sales promotions well may help you maximise benefits and achieve your goals.

How to plan a sales promotion

Below are some steps you may consider in planning your sales promotion.

Step 1: Define your goal

Identify a specific objective or set of objectives for the promotion. This could be attracting new customers, clearing inventory or boosting short-term sales.

Step 2: Choose the right promotion type

Select the type of sales promotion that aligns best with your goals and appeals to the customers you want to attract.

Step 3: Set a budget and duration

Set a budget and timeframe for the promotion. This can help you manage costs and profitability.

Step 4: Plan marketing activities

Develop a campaign to promote your sales promotion. Think about which channels you want to use to get your message out, including the role your website will play.

Step 5: Review business operations

Consider areas of your business that may be impacted by increased demand and how you’ll manage that. This could include stock, staffing and your website or payments solutions.

Step 6: Monitor and measure results

Think about how you’ll measure the performance of your promotion. Will you be able to see what’s happening in real time? How easy will it be to adjust your promotion if needed?

Tips for promoting your sale effectively

Investing in marketing to build awareness around your sales promotion can help you achieve the best result. Think about the messages you want to communicate and where you can get them in front of potential customers.

Craft compelling messages

To help boost your sales promotion effectiveness, here are some ideas you may consider:

• Increase urgency or FOMO (fear of missing out) with limited time offers and countdown timers
• Include a clear call-to-action to make it easy for customers to buy
• Think about the unique benefits of your sales promotion. Why would a customer buy from your business? This can help increase loyalty and repeat purchases.

Choose the best channels to connect with customers

Connecting with your target customers in the lead up and during your sales promotion will be a priority. Here are some ideas to consider.

• Social media: Engage with customers directly ahead of time and during the promotion. You could consider social media selling strategies.
• Email newsletters: If you have a database of subscribers, you may want to consider exclusive offers for them.
• Website banners: Feature banners on your website to help draw attention to your sales promotion.
• Working with influencers: Some influencers offer partnerships to promote products. Building an influencer marketing strategy could help you expand your reach.

Explore more digital marketing strategies

Invest in creating a great customer experience

To offer the best customer experience possible, it can help to prepare your business operations for increased demand. This can also help you offer a safer, more secure shopping experience for your customers.

Below we unpack three key areas to think about.

Online experience

Ensure your website is well set up to deliver a great customer experience during your sales promotion period. It can act as a powerful tool to communicate with your customers,  provide product descriptions to help them shop and FAQs to answer common questions.

Think about if you need to upgrade your business website to help support your promotional activity. You may want to have a support plan in place to help you address any issues with your website quickly should they arise.

Monitor for cyber-attacks

Black Friday and Cyber Monday can be prime times for cyber threats. Monitor your site for any unusual spikes in traffic and have a response plan ready in case of incidents.

Read about important cyber security trends

In store experience

If you have a physical store, think about staffing and how you’ll manage store capacity, especially during peak hours. Creating clear entry, exit and shopping paths for more efficient customer flow can help avoid congestion.

Think about how to manage transactions on the go if you think customer wait times could be extended.

Is a sales promotion right for your business?

Sales promotions can be powerful tools when aligned with your business goals and planned effectively.

Consider key retail periods, like Black Friday and Cyber Monday, Christmas and end of financial year sales. Customers may be actively look for promotions during these times.

Timing and preparation are key to helping sales promotions be successful and creating meaningful results for your business.