Sales promotions come in all shapes and sizes. They’re an essential sales and marketing tool used by businesses in practically all industries. In this article we’ll outline some popular and interesting sales promotion examples. We’ll also explain how you can use them to drive sales and boost your profits.
Get the most out of your reward programs
‘Sales promotion’ is one of the five parts of the promotional mix, alongside advertising, direct selling and public relations.
Sales promotions are defined as:
“Short term initiatives used to encourage customer purchases.”
They achieve this by altering the value of a product or service with incentives. Common examples include discounts, coupons, and product bundles.
Promotions can be used to promote loyalty, brand recognition, and a host of other key business objectives. But the primary objective of sales promotions is to increase sales.
Now that we’ve explained the concept behind sales promotions, let’s get into some real examples that you can use.
Discounts are the most common form of sales promotion. You see them everywhere, and customers take advantage of them every day. But there are plenty of ways to make discounts more attractive to customers and more effective for your business.
Personalized discounts are proven to be a big draw for customers. But you need customer data to create effective personalized discounts. Luckily...
“More than 50% of customers are willing to share information about the products they like to receive personalized discounts.” - Retail Touchpoints
Gathering and using customer data is much harder than it used to be. But loyalty programs offer a good way to learn about your customers’ preferences and shopping habits in a mutually beneficial way. You can use this data to offer them discounts on products you know they like.
You could also try setting up custom discounts for specific geographic areas. This could be a country, a region, or even a city. This can help you sell more of a certain product or increase brand awareness in that area. Geographic discounts are easy to set up and manage using geofencing.
Seasonal discounts are a tried and tested way to promote your products and brand at certain times of the year. Depending on whether you’re looking to increase sales or increase brand awareness, you can set up seasonal discounts on specific items or product lines.
Coupons are another highly popular sales promotion type that are used by businesses in all sorts of industries. Compared to many other types of sales promotion techniques, coupons give customers more control over when they take advantage of a promotion. Coupons can now be stored in wallets and the majority of consumers look for coupons before they shop.
Coupons are also highly customizable and can be bolstered with various security measures to protect against fraud. When it comes to coupon promotional campaigns, there’s huge potential for creativity.
Coupons actually serve as a medium for other promotional techniques, including:
Here are a few examples of creative coupon campaigns.
Cart abandoned coupons can help persuade uncertain customers to complete a purchase. Send these coupons to customers who fill their cart, or reach checkout, but then leave your site without completing the purchase.
“In 2020 the average cart abandonment rate was 69.8%” - Baymard
You want to offer an incentive that will convince the customer to purchase the products they were already considering. Try emailing them a coupon with $10 off the selection of products they had in their basket when they left your site.
Send your existing customers a special coupon on their birthday. This is a simple way to show your customers that you appreciate them. The key to an effective birthday coupon is delivery, so make sure you send it in a personalized email, notification or message.
“Customer birthday emails containing birthday coupons have a 481% higher transaction rate than normal emails.” - WooCommerce
First purchase coupons are a great way to increase brand awareness and secure new customers. By offering coupons that customers can use on their first purchase with your brand, you incentivize them to shop with you instead of your competitors. Customers that have bought from you once are more likely to shop with you again. If you follow up this initial promotion with other incentives, you can quickly turn a first time customer into a loyal one.
Offering mystery coupons with randomly assigned prizes is a great way to gamify your interactions with your customers. Add eligibility requirements (must have spent $100 within the past month before the draw, etc.) or offer these coupons to customers when they complete purchases over a certain value.
Research has shown that random rewards are a highly effective way to incentivize purchases. You can find out more about random rewards and why they work in this blog post.
Review coupons are a great way to incentivize customer reviews. Offer customers $5 when they submit a review on your website or an affiliate site. You get reviews and the customer gets a small financial reward for their time.
Referral programs help businesses work towards many different goals. They’re excellent for customer acquisition, brand recognition and customer retention. But don’t underestimate their effectiveness for straight up sales too.
Referral programs are simple — existing customers get rewards for referring new customers. The new customers also receive an incentive/reward for signing up or shopping with that brand too.
The good thing about referral programs is that they can be used in conjunction with all sorts of other promotional techniques. Examples include:
Product bundling involves selling multiple products together for a lower price than they’re sold for individually. Often product bundles include ‘free’ items.
Product bundling is less popular than discounting or coupons, but it has a variety of benefits outside of simply increasing sales. It also helps businesses save on marketing and distribution costs, and simplifies the customer decision making process. If a customer was unsure about buying a product, seeing it in a bundle deal will immediately make it more attractive.
A study by a Harvard University Business Professor proved that mixed bundling helped Nintendo sell some 100,000 more of its Gameboy Advance handheld games consoles in the early 2000s.
There are a number of different product bundling strategies, each of which have their own advantages in different circumstances.
Mixed product bundling gives customers a choice over which products they buy together. They usually allow customers to pick products from similar or complementary categories. Take the classic meal deal bundle for example, where customers get to choose a sandwich + a drink + a snack.
The choice in these bundle deals is a big draw for customers as it gives them more control over the final selection of products they buy.
‘Buy one, get one free’, or BOGO bundling, is perhaps the most common and well known bundling strategy. It’s a simple concept that offers customers two of the same product for the price of one. However, it’s technically the same as 50% off one product. Customers actually tend to respond better to 50% off deals. Nevertheless, BOGO deals are put to good use by many brands each day. You can find out more about them, and get some ideas on how to refresh the BOGO format with a modern twist in this article.
Rather than looking at specific sales promotion techniques, let’s look at some assorted sales promotion campaigns. Each one is set up to achieve specific campaign objectives.
To encourage customers to join your loyalty program, it’s a good idea to offer some kind of signup incentive. This could be any kind of incentive you like (additional loyalty points, a free item, a discount coupon, etc.). You just need to make sure there’s a clear incentive for customers to join your loyalty program. A good option is double loyalty points for the first two months of their membership.
End of season clearance promotions help businesses get rid of excess stock before they introduce new product lines. There is a huge variety of promotional techniques businesses can use in their end of season clearance campaigns. The most common is widespread discounts on seasonal products.
But there are plenty of other ways you can make your end of season clearance more enticing. Try gamifying it with an on-site wheel spin game that offers discount coupons on select items. Or offer bundles with progressive discounts depending on how many items customers add to their carts.
Affiliate partnerships can be a valuable source of customers and sales. Running an affiliate partnership with a brand that’s related to your own, but not a rival, can be a good source of new customers. Most affiliate programs rely on referral codes for two reasons:
Affiliate partnerships work best when the rewards and incentives available for customers are clearly displayed by the affiliate. This may be in the form of email communications, banner ads, notifications, etc.
There are numerous seasonal holidays across the year, the biggest being Christmas, Halloween and Easter. The closer towards the holiday peak you get, the more pressure there is to get rid of excess seasonal stock. This makes sales and stock an important balancing act.
To help increase the attractiveness of your time-limited holiday sale, try adding clear countdown timers to your promotions. This acts as an extra incentive for customers to complete purchases. It should also help you reduce the amount of excess stock you’re left with once the holiday has come to an end.
There are many ways you can use sales promotions to re-engage and retain customers that have fallen off the radar. This usually involves emailing them a custom discount coupon that will encourage them to buy from you again. But you can go one step further with a coupon that offers a discount on products you know they will like. This requires using data about their past purchases and preferences.
Remember that investing in customer retention is vital for the long term success of your business.
“A 5% increase in customer retention equates to a 25% to 95% increase in profits.” - Bain & Company
Customer retention is also much cheaper than customer acquisition — acquiring a new customer costs roughly five times more than retaining an existing one, according to Invesp.
Loyalty programs are another essential promotional technique used to retain customers. You can offer customers more loyalty points or better rewards depending on how long they’ve been shopping with you. Or you can set up a loyalty program with loyalty tiers, where customers get better rewards depending on how many points they accumulate.
Just like retaining customers, keeping active subscriptions is essential for the long term health of your business. Retaining subscriptions requires a slightly different approach. You need to offer the customer an attractive deal before the end of their current subscription. This way you’re aiming to retain them rather than re-sign them. Ultimately, the main objective is making sure they don’t churn.
Good options here may be offering 3 free months to the end of their next subscription. Or you could offer them some sort of free gift when they renew. This is an approach that has been used to great effect by Compare the Market, first with their meerkat toys, and then with their Meerkat Movies promotion.
Many businesses choose to set up promotional campaigns to help them make an impact when they enter new markets. To be truly effective, these campaigns need to take local customs and product preferences into account.
But, like all the sales promotion examples mentioned above, exactly how you approach this type of campaign is up to you. If you’re a business with a core line of own-brand products, you may be better off offering some form of gamified promotion to increase brand awareness. If you’re an ecommerce business with a wide range of products, a loyalty program signup promotion may be better.
The sales promotion examples we’ve listed above can be used in a huge variety of ways. They can help businesses achieve all sorts of objectives alongside simply increasing sales. With the right promotions software, it's possible to campaigns that integrate many of these sales promotion examples together as one.
To find out more about sales promotions and promotions in general, take a look at the content in our Content Library.
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