Sales promotion is a technique of marketing under which you can communicate to your target audiences with an aim of informing or persuading them about the existence or the relative advantages of your product, service or brand. This communication is intended to create or increase awareness, create or increase interest, generate sales or develop brand loyalty. This marketing technique can also help you to retain current customers and to motivate dealers and distributors so that they can improve their performance and enhance their stock turnover. 

There are two broad types of sales promotions you can consider doing.

1. Consumer sales promotions:

These are the sales promotion activities that you do to target the final consumer. The activities may include offering a discount, a gift or other incentives that can motivate the consumer to use the product.

2. Trade sales promotions:

These are the sales promotion activities that you do to target your dealers, distributors, agents or other members of your distribution channel. It may also involve the use of discounts, free samples, and other promotional techniques that motivate the channel members to move your products or services faster to the end consumer.

The following are some of the most common types of sales promotions techniques that you can apply to influence both final consumers and intermediaries, and that can suit all industries.

 

  • Offering discounts: A discount is a reduction in the quoted price of a product or service. The discount is usually given as a percentage of the quoted price. The consumers or intermediaries would be motivated to take advantage of the offer because it translates into a saving on their part. Cash and quantity discounts are the most common types of discounts offered in marketing promotions.

  • Using gifts: A gift is an item given to a person without expecting payment or anything in exchange. Gifting excites customers. You can set purchase targets for your customers, which when they attain, they qualify to be given a gift. Other gifts may not be associated with any targets. The gifts may range from additional units of the items they bought to various other items of value.
  • Use of coupons: A coupon is a voucher that entitles the bearer some discount upon purchase of a product or upon purchasing from a particular store. The coupon instigates the prospective buyer to take action and to develop product or store loyalty.
  • Financing options: This type of promotion technique is mainly used by vendors that have large amounts of financial resources. It involves allowing customers to buy on credit, and payment is made later either a lump sum or in installments. Alternatively, the financier can issue their customers with credit cards which they can use to purchase goods or services at the time they don’t have cash. The financing may also involve a third party loaning buyers some cash for their purchases, subject to their loan terms and conditions.
  • Free samples: This technique entails giving samples of a new product to prospective customers at a selected part of the market at no cost at all. The product is usually handed out to the customers who visit shopping stores or those who can be reached at strategic locations in the target market. With this technique, you afford consumers an opportunity to try the product, which was otherwise not in their budget. The consumers may then develop a liking for the product leading to an increase in sales.
  • Product bundling: When you offer two or more products for sale at the same price, then you are doing promotion by bundling. Customers would prefer to buy a bundled offer over a single one. You can bundle similar or different items. This promotional technique is bound to increase the quantity of the items sold.
  • Use of contests: You can organize an event in which people compete for a position in the purchase or consumption of a particular product. Different forms of contests can be organized for the purpose of gathering customer information, motivating customers to try a product or to create awareness about it. You can make the contests simple, like winning a gift by scratching a card, an in-house showroom game or an online contest. Due to the popularity of the internet, online contests are becoming more reliable because they have a faster penetration rate and thus can reach many customers.
  • Refunds and Rebates: The use of refunds in promotion involves a marketer offering to return a certain amount of money paid for the purchase of a product, service or their combinations. This is meant to encourage customers to increase the quantity or frequency of the purchase. For instance, if you turn up at a shopping mall with receipts of previous purchases, the mall will refund you some amount of the figure of the receipts. The refund is usually done in cash.
    Rebate is a type of refund under which you qualify after making full payment of invoice amount in strict compliance with the terms and conditions of sale. This type of refund is usually done through the customer’s bank account.
  • Use of exchange offers: This type of sales promotion tool involves trading-in an old item that is still functional for a new and an upgraded one. You may want to do this due to storage space constraints or in order to save on the residual value of the old item. This type of sales promotion technique is commonly used during festive seasons when people are in a purchasing mood. Upon the valuation of the old item, you are relieved of the final payable amount for the new item. The price reduction is usually under the heading “Exchange offer reimbursed”.
  • Free trial technique: You can use this promotional tactic to enable your product brands to enter a new market, or when you are releasing a new product, or to increase existing sales. In this case, you are allowed to use the product free of charge before you decide to purchase it. The main aim of this technique is to give the customer a chance to try the product and learn more about it before spending money on it. A number of software and online programs such as Adobe Photoshop, Microsoft office 365 and others are well-known for allowing free trial of up to one month before their purchase.
  • Email marketing: This type of sales promotion technique concerns sending commercial communication via email to a group of potential customers. The communication is usually aimed at enhancing the relationship with current or former customers, nurturing their loyalty and repeat purchasing, getting new customers or persuading the current ones to make an immediate purchase or purchase more of a product they are already consuming.
    Email marketing is currently one of the best and most commonly used methods of sales promotion. This is because it is easy to implement and it has a high rate of market penetration. The rate at which the world is shifting to digital communication is relatively high. The messages are more personalized and can be tailored to entice the customer to purchase your product.
  • Use of shows and exhibitions: These two techniques are closely related. A trade show is an organized display of products offered by players in a particular industry. Shows usually target retailers, dealers, and distributors of the industry products. Exhibitions, on the other hand, are organized product display forums by one or more industry players, targeting to showcase products to their individual buyers or even industrial consumers. Shows and exhibitions provide an opportunity for industry competitors to learn from each other and improve their relationships. Customers tend to develop longer-lasting product impressions under these types of sales promotions.
  • Product demonstrations: Sellers may opt to demonstrate the use and handling of a particular product to their prospective customers. The demonstrations may be done in their malls, showrooms, homes, and other places. This promotional technique is good for creating product awareness and especially when the product is technical in nature. The technicality of a product can prevent potential buyers from making a purchase decision. A demonstration is therefore meant to expedite the purchase decision.
  • Continuity programs: This is a promotional strategy in which a seller launches a continuous promotional program aimed at attracting and retaining customers. For example, a shopping mall may launch a monthly program of awarding customers who buy a certain quantity of a product. The customers would be tempted to remain loyal to the mall so as to benefit from the monthly awards.

It is evident from the above list that there are many different types of sales promotions techniques. Given that every business entity is unique, the type of sales promotion technique selected for use may vary from one business to another. Due to the competitive nature of the industry, most businesses resort to using a combination of sales promotion techniques. This enables them to cope with the competition, attract and retain more customers, and ultimately increase their sales and profits.