A sales promotion is any temporary perk or price reduction intended to make a sale more enticing. You’ve most likely seen them and used them plenty of times. Promotions usually don’t go on forever — their short-term availability is what makes them most appealing. A good sales promotion gets you feeling like you need to purchase this company’s product right now.
Understanding what makes sales promotions effective
A sales promotion must accomplish at least three discrete goals:
- Draw attention in a world that is abuzz with new information.
- Prompt the potential customer to explore the offer further through inquiries, online shopping, or in-person shopping.
- Complete a sale or gain a loyal customer, depending on the ultimate goal of the promotion.
To accomplish the three goals above, a given sales promotion must:
- Be clear and recognizably valuable. Complicated language may make readers assume there’s a trick, so straightforward promotions do best.
- Make it easy to shop. This often means having a hyperlink in your promo so that the more impulsive reader of the promotion will immediately start looking at the offer.
- Make it compelling. Even if there’s a “catch” — like a discount that applies to the item itself but that doesn’t reduce shipping charges — it needs to be compelling enough for the shopper to still complete their order.
As you can see, even a simple sales promotion requires a lot of behind-the-scenes work to successfully draw in customers. Below are 12 examples of how you might use promotions to drive more sales.
Effective sales promotion examples
1. Free trial
A free trial taps into the psychological state that something free is also risk-free. This works particularly nice for items that people try once and realize they cannot live without. It’s also helpful if the free trial costs relatively little to you.
Companies used to make it complex or frustrating to cancel a membership or subscription after a free trial, but this strategy has become less popular. Instead, companies will now advertise how easy their cancellation process is, which is more incentive for a customer to sign up for a free trial.
2. Just-in-time discounts
In the world of online or app-based shopping, discounts that are specifically designed to appear right before someone abandons a potential purchase are particularly effective.
If a shopper had an item in their online shopping cart for a while, a pop-up with a promotional code for a small discount might be just the push they need to click “buy now.”
A similar strategy is to offer an add-on right before the purchase is complete that lets someone add another item to their order at a special price.
3. Bulk discounts
It’s basic math that, if you can sell a few additional products at a slightly reduced profit margin, you’re still better off than if you sold only one item at the full regular price. Bulk discounts are popular because they reward loyalty and boost overall sales.
4. Holiday or special day discounts
Many people are already in shopping mode at particular times of the year, including the back-to-school season or right after Thanksgiving as they prepare for the winter holidays.
Tying a discount or sales prices to a particular time frame reminds people of a reason to buy and gives you a natural endpoint for the sale, after which the product or service will go back to full price. This prompts your customer to take advantage of the deal now.
5. First month discount on a subscription
For some products and services, a free trial may lead to too many cancellations and may not be worth the promotion. Perhaps your tanning salon finds that offering a free session brings one-time traffic, but a 30% off coupon draws more long-term sales.
A discounted first month will bring in more motivated customers who are willing to pay at least a bit to start. They get the benefits of being a regular customer or subscriber and may want to continue even when the price goes back up. This might be the right tactic for you to get more ongoing sales.
6. Loss leader
When there’s a lot of competition for a particular product, sometimes companies offer a single item at a very low price to draw in a customer who might otherwise go do their shopping elsewhere.
For example, the Kroger grocery chain had a promotion in which they offered a small free item to users of their app every Friday. They found that few customers used the app just to get the free item. Instead, many ended up doing their entire grocery shopping for the week.
7. Club membership with perks
People love to be part of the “inside crowd.” Creating a loyalty club for your best customers can be a great way to get them to want to spend more.
You can either charge an annual fee for the club that offers valuable savings once they’re members or have a free club that they can access simply by sharing their email or phone number. Either way, these sales promotions make people feel like they have special, “VIP” access and may prompt them to make more purchases.
8. Contests and giveaways
One way to combine some of your marketing efforts with sales promotions is to create contests or giveaways in which the entrants who don’t win still “win” a discount coupon or access to a sale.
The contest itself focuses on getting the word out and generating buzz about your products and services, but tying in an extra promotion makes everyone feel like they’re a winner.
9. Trade-in discounts
For items like cell phones or computers, trading in the item in exchange for a discount on a new item can be a valuable promotion. It can prompt people to consider a new purchase sooner since their trade-in item gets less valuable over time.
It helps your bottom line if your product is one where you could easily resell the trade-ins, but sometimes even a small trade-in discount is enough to motivate a new purchase, making your ability to resell the trade-in potentially moot.
10. Free “gift” with purchase
A popular sales promotion within the cosmetics and body care world, suggesting that certain purchases trigger a free gift can set off the same psychological reaction of a free trial.
Even though you might choose to price the regular items with enough profit margin to easily cover the cost of the free gift, structuring the price this way can help people feel like they are getting a special treat and make today the right day to buy.
11. Affiliates or refer-a-friend discounts
Another promotion that combines marketing with sales is the idea of giving discounts to your loyal customers who refer their friends.
If a customer buys a pair of shoes for $100 and gets a $10 discount for every friend who also buys a pair, they may feel like they are “earning” free shoes by sharing out their codes.
In reality, most customers will end up buying their next pair at $90 or $80, not waiting until they’ve referred enough people for free shoes. At the same time, those discounts are boosting their loyalty while bringing you new customers too.
12. Special-population discounts
Society is particularly indebted to the populations of people who do some of the most difficult work. If you work in a setting where people tend to make purchases together, like a restaurant, an effective promotion may include offering free items or discounts for teachers, first responders, military veterans, or other special populations.
They’ll often bring others with them who pay full price, and you’ll also generate goodwill in the community.
Using the psychology of sales to promote your products
Most sales promotions rely on a few key aspects of how people behave. For instance, think about how people:
- Love to know or have something rare (promotions with a membership club or a bulk discount)
- Respond when told that something is scarce or time-bound (holiday sales or just-in-time discounts)
- Like to be the one who paid the least for something (free trials, discounted first months, and loss leaders)
Your sales promotions can do a lot of work for you, whether that’s introducing people to your products for the first time through contests or refer-a-friend discounts or building reliable, long-term customers who see their use of your product as part of their identities.
The key to a good sales promotion is to make sure that you monitor how your customers respond and whether it boosts not only revenue but also your total profit. The best sales promotions may seem like a “great deal” to the customer, but they also help you make money.