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How do you attract new customers and generate more revenue from existing ones? The answer is a simple four-letter word: S A L E.
Sales promotions are a tried-and-true way to increase sales, acquire new customers, and take advantage of seasonality.
Sales promotions include discounts, offers, gifts, and other price-lowering tactics. Sales promotions frame the offer as a limited-time deal that encourages customers to spend more through bundles, increasing the overall company revenue.
However, not all sales promotions are created equal. In this post, we’ll talk about the different types of sales promotions, the advantages and disadvantages, sales promotion ideas, and more.
Regardless of industry or what you’re offering, there are dozens of sales promotion opportunities. And, businesses continue to invent new ones (think of Amazon’s Prime Day, for example).
Here are some of the most common types of sales promotions:
Discounts: The most popular type of sales promotion, discounts are a money-off offer automatically applied to products or services. Whether online or in-store, there’s a reason discounts are so popular — they work! Financing: Financing is the act of letting a customer buy something through different credit options, whether it is a store credit card, leasing plan, etc. Not only does this help convince the customer to buy immediately, but it also helps you to liquidate your stock efficiently. Buy something, get something free: Everyone understands the value of free, which is why buy, get promotions work so well. Also known as bundling, this sales tactic consists of giving customers an additional product at no extra cost, like conditioner bundled with shampoo.Gifting: To stick with the free theme, gifting is another effective way to entice people to buy. When customers see the chance to receive a free gift with their purchase, big or small, they are more likely to make a purchase.
Like anything in the business world, sales promotions have their own set of pros and cons.
Advantages of sales promotions:
Gives a quick sales boost: Nothing can boost your revenue quite like a successful sales promotion.Encourages new customers: Sales promotions allow potential customers to try something new, with low risk.Raises awareness: When you run ads supporting your sales promotion, more customers will see your business, increasing brand awareness.
Results in short-term financials: While any boost in revenue is welcome, the financial benefits of promotions have a habit of only lasting as long as the sale does.Sets unrealistic expectations: When you gain new customers from sales promotions, they may begin to expect steep offers all of the time (which isn’t realistic for most businesses). Desensitizes customers: When you lessen the financial value of a product through sales promotion, customers may begin to think that what you are selling, and your brand, is only worth the smaller dollar sign.
Sales promotions are saturating our daily lives. Take a moment to think about how many promo emails you receive, how many promotional billboards you pass by, or how many sales ads you see. Dozens, right?
If you’re trying to find a sales promotion idea that will help you stand out from the crowd, take a look at this three examples:
Fashion-staple Bloomingdales takes the world by storm every time their popular Friends and Family sale occurs. Offering heavy discounts like 25% off and free shipping, Bloomingdales drives this campaign by discounting a wide variety of items, knowing that a customer is likely to find something (or many things) they will love and buy.
Sporting goods store, DICK’S, regularly connects with customers with their flash sale. Every Thursday, the company discounts a new array of products for a limited time. This drives urgency, while keeping customers coming back for more thanks to the consistent schedule.
Popular shoe company, TOMS, takes the idea of “buy one, get one” to a new level. Known for their “One for One” campaign, for every pair of shoes bought, TOMS gives a pair to someone in need. Different than the traditional customer-gets-all approach, this sales promotion works well because buyers know they are doing something to make the world a better place.
Running a sales promotion seems easy enough: decide on a discount, promote the offer, and bring in more money. In reality, sales promotions require a high level of planning and strategy to come up with the best sales promotion ideas.
Here are three tips to make sure your idea will be successful:
Make it unique: Think of a list of things that are unique to your brand and find a way to incorporate them into your promotion plan. Test campaigns: Sometimes you just won’t know if an idea will work unless you try it. Test out different sales promotion ideas in small markets and use the most successful on the large scale.Incorporate different elements: Don’t be afraid to use sales promotions in conjunction with other marketing efforts. For example, get the word out about your 25% off discount by incorporating guerilla marketing tactics like a sticker distribution.
For more inspiration, read our blog post, “5 Sales Promotion Ideas that Small Businesses Can Execute.”
For a step-by-step look at setting up a flash sale email series, check out our e-book, Cash in a Flash.
Your company’s sales promotions should be as creative as you are. Here are some unique sales promotion ideas to get you started:
Targeted promotions: Whether you choose a certain location, customer sector, or store type, targeted sales often give powerful results thanks to their specificity. Tripwire: Get first-time customers interested in what you have to offer by first offering a deal on a small item, like an Ebook.Surprise and delights: Take to social media and grant a few lucky followers a free item, then post about it to raise awareness with the rest of your audience.Referral bonuses:Treat existing customers by rewarding them with coupons or gifts when they get their friends to sign up for your mailing list or start a free trial.
Sales promotions are a quick and creative way to boost both revenue and awareness. Don’t be afraid to experiment with different types of promotions and build on what works as you move forward and expand.