What is a Sales Promotion?
A sales promotion is a type of marketing strategy that motivates customers to purchase within a specific window of time through various incentives or rewards. A sales promotion strategy often incorporates some sort of discount on goods, but it can also attract customers through strategies like bundling, complimentary services, or gifts.
No matter what reason for purchasing you offer customers, sales promotion activities are a great way to attract new customers and re-engage the ones you already have.
6 Types of Sales Promotions
Every type of sales promotion has its various advantages and is designed to suit different goals. Here is a list of the most common sales promotions in retail.
1. Discount Promotions
The most classic type of promotion: a discount. Save either a dollar or percentage amount when you make your purchase, or run a buy one get one (BOGO) deal. This type of promotion is good in any context — that’s why it’s a classic.
2. Tiered Promotions (Buy More, Save More)
Tiered discounts refers to offering customers a larger percentage off the more they actually spend. For example, if a customer spends $100, they may get 10% off; but if they spend $200, they get 20% off. This strategy is a great way to motivate customers to spend more across the board and feel like they are getting more value as they increase their purchase amount.
3. Private Sales
A private sale refers to a sale that’s only available to a certain segment of your customers. That segment can be based on factors like previous lifetime spend, geography, or even affinity group. A private sale promotion is also a great marketing tactic to extend to a local organization or club in order to encourage new customers to shop from you for the first time.
4. Flash Sales
You may remember Flash Sales from their heyday in the early 2000’s. A flash sale is when you provide limited-time offers and discounts for certain items, even if just for a few hours. Flash sales are the ultimate urgency driver, but if you’re looking to extend their impact while still motivating customers to shop quickly, then consider running multiple flash sales in a row but limiting which products are available during each promotion.
5. Free Gift with Purchase
Everyone likes gifts - they’re free! The free gift with purchase is a great way to reward customers for purchasing either a specific item or for spending above a certain threshold. You can either let the customer choose the gift or use gifting as an opportunity to introduce your customers to a new product. The gift you provide is also a great way to move lingering inventory.
Giveaways are typically very high-value gifts or bundles offered as a reward to only one or a select few customers; they are essentially contests but the way customers enter is either by spending a certain amount of money or completing a specific task such as following your brand on social media or providing their email for an email list. Giveaways are a great incentive for smaller requests like this one because the method of opting in for a chance to win is not too demanding on the customer. By making it easy for the customer to participate, you are increasing the number of customers who accomplish your desired task, even though they know the chances are low that they will win.
How to Run a Successful Sales Promotion
Let’s talk about some sales promotion techniques and best practices that will help you run the best promotion for your large or small business and customers.
Define your objective.
If you’re considering running a sales promotion, it’s important to know why. Having a clear objective will help you determine what kind of promotion to run.
Here are some common reasons for a promotion:
- You need to move lingering inventory.
- One of your channels is not hitting its sales or traffic goals.
- You’ve opened a new store.
- You want to highlight a certain item or category.
- You’ve launched a new line of products.
The key to any successful sales promotion is to ensure that it instills urgency in your customers. You want to make sure that customers have a reason to act within a certain time frame, otherwise you won’t get the outcome you were hoping for.
Urgency can come in many forms. For example, you can limit your promotion to a certain number of days, or to a certain number of qualified participants (e.g. “the first twenty people who purchase”). Once customers see that they can only benefit from your special offer for a limited time, they’ll make your offer a priority.
Market your promotion across channels.
Once you know what your promotion will look like, it’s time to tell your target audience! Your sales promotion can either target a specific segment of your customers, or you can make it available to everyone and share steps to qualify. Either way, the next step is to outline the timeline and methods of communicating your promotion so that customers know what it is and how they can take advantage.
The most common ways of sharing news about a promotion include email marketing, social media marketing, website banners, and in-store collateral if you have physical retail. However, you can also rely on your sales team to spread the word and help educate customers on the details with platforms like Endear. Be sure to educate your entire team about the promotion because customers may rely on them for additional questions.
5 Great Examples of Sales Promotions in Retail
Below are some different types of sales promotions with examples from leading brands and Endear customers.
Before you offer promotions on your website, consider offering items to your most loyal customers privately first. For example, Schutz Shoes used Endear to put together a Friends and Family promotion for their top customers before launching their spring sale across their website. The exclusivity of their sale reminds shoppers that they are getting a first look as a reward for their customer loyalty.
You can assess who qualifies for this private promotion by any metric you choose, such as total lifetime spend, number of purchases made this year, or simply based on who visits your stores the most. To market your sale, you can put together a product page only available through a specific URL or share a special code for check-out if you’re running the promotion online.
2. J. Crew Factory
A clever example of a flash sale is this ad from J.Crew Factory. The GIF format is engaging and catches your attention. It also calls to attention that the flash sale ends the same day at 3pm — creating a sense of urgency to shop the sale while it still lasts. The campaign connects consumers directly to the J.Crew website with a clear link “Right this way”. If you’re asking shoppers to visit on a whim, make sure it’s easy for them to access your products.
Since their start, Everlane has enabled customers to "pay what you wish", providing items at various price points for purchase. Given their dedication to transparency, they also publish how each price impacts their business, with the lowest price usually near to an at-cost option. This strategy puts trust and faith in customers who may choose to pay a bit more than at-cost in order to support the business they care about.
While this strategy really stresses the community aspect of a brand relationship, the actual logistics of setting up buckets and enabling consumers to pick their price may be challenging. You can also create different discount codes instead and use good messaging to explain how each percentage off will impact your business.
Think back to your own experience with presents. While receiving cash can be nice, you often remember the thoughtful gifts and the person who gave them to you more. Hair care brand MONAT is a great example of this tactic. MONAT VIPs receive discounts with every order as well as specially-selected free products at a certain price point. This encourages customers to sign up for the VIP program and buy enough products to receive the free gift.
The benefit of this approach is that customers who shop will automatically earn credit toward a free gift, helping to move more inventory. If you can, try to populate the items available for free as part of the customer's shopping experience.
Give-aways are another excellent vehicle for spurring both store and e-commerce traffic, purchases, or even social media engagement. For example, CB2 offered its customers the chance to win a $1,000 gift card for writing a review of their favorite product.
While this specific giveaway doesn’t require customers to actually spend any money, it helps the brand create more user generated content (UGC) that it can then leverage to help give future customers confidence about their purchases.
Sales promotions are an incredible short-term way to increase sales, traffic, or any other goal you might have. However, they are only as effective as the number of people who know about it and participate in them. The more you can market your promotions through all your available channels, the more likely you are to see the results you want.
Endear is the ultimate retail partner and sales promotion tool. Whether you’re operating a hybrid, omnichannel model, or purely brick-and-mortar, our features can help you spread the word about your promotion in a personalized way so that your customers are even more likely to participate.