Sales Promotions 101: Meaning, tips and trends

Sales Promotions 101: Meaning, tips and trends

Learn the basics of promotion marketing and how you can leverage sales promotions to attract, engage and retain the right customers.

a year ago
6 min read

In the post-pandemic world, businesses across industries are experiencing an unprecedented change in consumer expectations, behavior and trends. And who's to blame? Today, every solution, product, service or experience has not one, but several closely related competitors that customers can choose from.

So, how does one re-think demand and supply? Well, to begin- businesses must look at re-strategising their marketing efforts and effectively promote their offerings in a way that directly resonate with their target audience.

Let's understand why and how.

Why does promotion marketing matter?

Promotion marketing is that essential component of any successful marketing strategy that helps you:

  1. Communicate the value of your product
  2. Target the right potential customers
  3. Create long-term loyalty
  4. Convert one-time-buyers into repeat customers
  5. Encourage customer engagement

One of the four Ps (alongside price, product and place) of the marketing mix , promotions is that key component that ensures your products or services get the right attention, from the right customers, at the right time. Consider it the most important step of marketing, using which you can incentivise users and turn them from visitors to repeat buyers!

Today, customers are more value-conscious than ever before and as a result, promotions and incentives have become crucial in influencing their purchasing decisions. Customers are actively seeking deals and discounts to stretch their budgets, and promotions help them do just that. Moreover, the rise of e-commerce has made it easier for customers to compare prices and options, making it essential for businesses to offer promotions and incentives to stay competitive. In short, customers now care about promotions and incentives more than ever before because they feel benefitted by every transaction they make with a business.

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Brands that will stand out in 2023 and the years to come will need to focus on creating solutions that are not just relevant but also engaging, personalized and truly aspirational.

Types of promotion marketing

  1. Direct promotions: Direct promotions involve using the channels where you directly communicate with your customers. These could be in-app communications, mails, social media or any other platform of preference. The goal of direct marketing is to build a personalized relationship with the customers that ultimately result in sales.
  2. Advertising: Ads let you create awareness on a much larger scale. Ads make a massive difference in ensuring that your brand is recognized by potential customers. Be it on television or digital platforms like YouTube, if your ad is well-targeted and relevant for the viewers, you can attract the attention of both existing and new customers.
  3. Personal Selling: The old-school way! Personal selling involves interacting with customers, one-on-one either physically (door-to-door) or say, on the phone. The final goal of personal selling is to convince and convert!
  4. Public Relations (PR): Public relations involves building relationships those who can influence the image of your brand in a positive way, to the right audience. This includes media, content creators etc.
  5. Sales Promotion: The most exciting way of running promotions today. Sales promotions are tactics that are designed to motivate customers to make a purchase, or any desired action against a relevant incentive- say a discount coupon, cashback etc.

The big bet on sales promotions

In a highly competitive market where businesses must find new and innovative ways to attract and retain customers, here are some of the key reasons why sales promotions will be more effective than ever before:

  1. Increased Competition: With the rise of digital commerce and the ease at which customers can alternate between various closely-related brands, the competition for businesses to retain their customers has become more intense. Sales promotions help businesses to differentiate themselves from the competition and provide customers with a reason to choose their products or services over others.
  2. Changing Consumer Behavior and Price Sensitivity: Today's consumers are more value-conscious than ever before. Be it finding the best deals or simply a brand they enjoy spending their time with - customers are all in for better promotions, discounts and engagement.

    According to a survey conducted by RetailMeNot, 85% of consumers said that price was the most critical factor when making a decision to purchase.
  3. Digital Marketing: With the advent of digital marketing, businesses can now reach a much wider audience without the heavy spend. Sales promotions can be used as a key component of digital marketing campaigns, helping businesses to attract and retain customers online.
  4. Improved Analytics: With the rise of big data, businesses can now analyze customer behavior and preferences in real-time. This enables them to track, analyze and run tailored and personalized sales promotions to specific customer segments, improving their effectiveness and ROI.
  5. Customer loyalty: By offering exclusive discounts and deals to the advocates of their brand, businesses can increase customer retention and build a strong base of repeat customers.
  6. Increased sales: According to a survey by the National Retail Federation, 92% of retailers use sales promotions to drive sales.
A survey by RetailMeNot found that 80% of consumers are more likely to make a purchase if there is a promotion or discount offered.

Price and non-price promotions

While both price and non-price promotions are both effective ways to incentivize customers to make a purchase, each comes with its own set of benefits. It is important to understand the difference between the two, to determine which type of promotion is best for your business.

Price promotions like discounts, coupons, BOGO deals, coupons etc are built to appeal customers looking for a good deal on their purchase.

Benefits of price promotions:

  1. Effective in driving short-term sales
  2. Clear out inventory
  3. Real-time treats
  4. Build customer loyalty with frequent, relevant rewards.

However, heavy dependance on price promotions might risk devaluation of your product in the eyes on your customers- making it difficult to maintain margins in the long run.

Non-price promotions, are the loyalty programs, leaderboards, contests, free samples etc., which are built to attract those customers who are looking for an added experience or an 'aha' moment. Such promotions are definitely more powerful in creating a stronger emotional connection with the customers and builds brand advocacy long-term.

Benefits of non-price promotions:

  1. Builds customer loyalty
  2. Higher LTV
  3. Brand differentiator from competition
  4. USP
  5. Higher retention rates
Non-price promotions can be more difficult to implement and require patience to track, analyse and measure results.
Learn how you can leverage the power of the complete promotions platform,, that lets you test, track and optimize all user-promotion campaigns, without code.

Designing a powerful sales promotion campaign

We call them the non-negotiables of running any sales promotional campaign:

  1. Clear Goals: Defining the goals of the promotions is basically the first step. It is important that you be specific about the objectives of your campaign, which could be anything from increasing sales, generating more leads or simply getting more people to know about your brand. Having clear goals set right will also help you know what to 'measure' to know if your campaign is performing well, or even make adjustments real-time as per your customers feedback.
  2. Defined Target Audience: Before running a campaign, it is key to know who it is designed for. Identify the needs, preferences, interests and aspirations of your target audience and create a campaign that is personalized to just that.
  3. What you offer changes everything: Ensure that you make offers that no customer can resist. Be it slashed prices, a free sample, a bonus product or experiences that they aspire for - your offer should be relevant for your target audience. It is also extremely important that your promotions run at the 'right time', 'for the right people' 'with the right rewards - to ensure they are compelling enough to drive immediate sales + attract new customers.
  4. Clear and Consistent Messaging: Even if you have the most relevant offer with the right incentives, running at the right time- it means nothing if your customers are too confused about it's usage or benefits. Ensure that the language you use to communicate details of your offer are simple to breakdown and understand. How simple or difficult your messaging is will be highly influential in the participation rate of your campaign.
  5. Multi-Channel Approach: There is really no point running offers that your audience does not even know about. So, create noise at all the relevant channels! Promote your campaign across multiple channels to maximize its reach. This could include push notifications, email marketing, social media, paid advertising, and in-app signage. Consider the channels that your audience uses the most to connect with you and amplify your campaign's messaging.
  6. FOMO: Creating a fear of missing out, or say, urgency to encourage customers to act quickly and make the desired action (desired action as per your campaigns objectives). Set a specific time frame for your promotional campaign and communicate the deadline clearly to your audience.
  7. Test and Measure: Test, experiment and release various features of a campaign to see what works best. This could include different communication, an assortment of offers or try various channels to see what's most effective. Test and optimise accordingly!
  8. Track results: Track what's working and do more of that. Ditch what does not take you closer to the campaign goals. Apart from analytics (which is KEY!), bank on customer feedback to know what they want more of. Make quick adjustments and keep your campaign up-to-date with the changing needs of your customers.

In conclusion, businesses today must look beyond just great price and product offering and re-strategise their marketing to add higher value for each customer, at every touch-point. It is now long foreseen that digital promotions will no longer be a 'one-time' treat and instead be highly influential in driving acquisition, retention, engagement and loyalty!

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