Different techniques of sales promotion
This article examines different techniques of sales promotion. There is no doubt that competition is very intense almost in all industries. In such situations, marketers apply different techniques to persuade customers to purchase their products and services. Sales promotion is one of those techniques.
What is sales promotion?
According to Monash University (2023) sales promotion refers to a form of promotion which encourages customers to buy products by offering incentives, such as contests, coupons, sweepstakes, samples, free gifts and so on.
According to Shopify (2023) sales promotion is a marketing activity that is designed to increase sales, encourage customer loyalty, or generate brand awareness.
As suggested in the above definitions, sales promotion is a marketing technique that involves the use of incentives, discounts, and special offers to motivate customers to make a purchase or try a new product. It is an essential part of the modern marketing mix and can be employed in various sectors, including retail, hospitality, and online businesses.
The primary goal of using different techniques of sales promotion is to enhance brand visibility, create customer loyalty, and ultimately boost sales and revenue. However, achieving the goals is not always a straight-forward job.
When used appropriately in line with other elements of the marketing mix i.e. advertising, PR, personal selling, direct marketing etc, sales promotion can turn out to be very effective in acquisition of new customers and retention of the existing ones. By combining these different marketing tools, companies can create a cohesive and effective promotional campaign that maximizes the potential to achieve the promotional goals.
Different sales promotion techniques
There are different techniques of sales promotion which marketers can use depending on the nature and objectives of their promotional campaigns. which marketers can use depending on the nature and objectives of their promotional campaigns. Buy one get one free, free coupon, prize draw and loyalty cards are to name but a few. The discussion that follows focuses on some of the popular sales promotion techniques.
Buy on get one free
It is one of the most popular sales promotion techniques (Gyant, 2022). It is widely seen in the retail sectors. With this technique, customers are convinced to purchase a product as they are rewarded with a free one. However, critics say this technique often forces customers to purchase something they may not need.
Money off coupons
From educational institutes to supermarkets, many companies offer their customers money off coupons very often. Customers cut coupons out of newspapers, magazines, brochures, leaflets, or a product packaging that enables them to buy a product next time at a reduced price.
Companies sometimes organise different customer-oriented competitions. Customers need to buy something in order to take part in the competition. The winner in the competition receives some rewards in the end. The prospect of winning a prize encourages customers to buy some products.
Almost all big organisations now-a-days either have their own loyalty cards or, are part of a loyalty scheme. Nectar card, Tesco Clubcard, and Iceland Bonus Card are some good examples in this regard. When customers buy something and use their loyalty cards, they earn some points. Once they reach at certain points, they become eligible for some gift money, goods or other offers.
It should be noted that different loyalty cards have different processes and rewards. For example, customers can have a free cup of tea at McDonald’s once they have collected six stickers. They need to buy six cups of tea to collect six stickers (each cup of tea comes up with a sticker) and the 7th one is free!
Gifts with purchase
Offering a free gift with the purchase of a product or service can add value to the customer’s transaction and encourage them to make a purchase.
Providing free samples of a product or service can encourage customers to try it and potentially make a purchase. This can be particularly useful for new product launches or when trying to break into a new market segment.
Creating a sense of urgency through limited-time offers can encourage customers to make a purchase before the promotion expires. This can be particularly effective when combined with high-quality advertising and marketing efforts.
Free shipping and returns
According to Gyant (2022) free shipping eliminates one of the last barriers that could prevent people from completing their online purchasing orders. When customers see free shipping and return options, they are more convinced to make a positive purchase decision.
Measuring the success of a campaign of different techniques of sales promotion
To determine the effectiveness of a campaign of different techniques of sales promotion, it is crucial to establish clear objectives and key performance indicators (KPIs) before launching the promotion. Some common KPIs that businesses can track to measure the success of their sales promotion campaigns include:
The most straightforward way to measure the success of a sales promotion is by comparing the sales revenue generated during the promotional period to a similar non-promotional period.
This metric can help businesses determine the percentage of customers who made a purchase as a result of the sales promotion. A higher conversion rate indicates a more effective promotion.
Average transaction value
By calculating the average transaction value during the sales promotion, businesses can assess whether the promotion encouraged customers to spend more than they typically would.
New customer acquisition
Tracking the number of new customers acquired during the sales promotion period can help businesses determine whether the promotion was effective in attracting new customers.
Assessing the impact of the sales promotion on customer retention can help businesses understand whether the promotion encouraged repeat purchases and long-term loyalty.
Summary of different techniques of sales promotion
In a nutshell, sales promotion is a very effective technique for companies to increase their sales. However, it should be mentioned that sales promotions may sometimes be costly. Likewise, some of these techniques have also been accused of contributing to food waste in the UK, USA, and some other countries.
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Last update: 30 April 2023
Gyant, N. (2022) 15 Insanely Effective Sales Promotion Examples to Win More Customers, available at: https://www.wordstream.com/blog/ws/2020/10/13/sales-promotion-examples (accessed 30 April 2023)
Monash University (2023) Sales promotion, available at: https://www.monash.edu/business/marketing/marketing-dictionary/s/sales-promotion (accessed 30 April 2023)
Shopify (2023) Sales promotion, available at: https://www.shopify.com/uk/retail/sales-promotion (accessed 30 April 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.