Sales promotions are targeted marketing efforts used to help motivate customers to buy, usually in a limited timeframe. For small businesses, these types of promotions can help boost short term cash flow, attract new customers, or clear out inventory.
Unlike broader brand marketing strategies, sales promotions are often focused on a specific product, category or service. They may also focus on some kind of special offer which may be time sensitive, which can make them a powerful marketing tactic.
Sales promotions can come in various forms. This means there are options that can suit many different types of businesses, products or services.
Each type of promotion can have its own unique benefits. Selecting the right one depends on your business goals. Below we share examples of some popular types of sales promotion strategies.
Reducing the price on selected items to help attract customers. These types of sales promotions may particularly appeal to price-sensitive buyers. They can also be a good way to help clear out any inventory that isn’t shifting at its usual price.
Offering a second product for free or at a discount. This can be an attractive choice for new customers.
Time-limited sales that help create urgency. They can help push quick purchases from customers who may fear missing out on a good deal.
Encourage customers to purchase more by offering discounts on grouped products – usually in the same category. These promotions can help increase the average order or sale value.
A way to help generate excitement and increase engagement with customers. They give people a chance to win a product or service, usually in exchange for information e.g. an email address.
At certain times of the year customer demand can increase, particularly around holidays. Consider aligning sales promotions with these dates to help meet demand and encourage people to buy. Be sure to consider business management over the holiday sales season.
Black Friday is a great example of a strategic sales promotion opportunity.
Many businesses use this annual shopping event to help attract customers, clear out inventory and compete with other businesses.
Not every business uses the same strategy for Black Friday. And nor should they. It helps to fit your sales promotion with your specific business goals.
If you’re planning a Black Friday promotion, you might think about your objectives up front. They could include:
When you understand your goals, you can consider the best type of sales promotion to help maximise performance.
You might also choose to run multiple promotions across different products or services. This can help you be even more targeted, attract different types of customers and achieve a range of goals.
While sales promotions may offer significant benefits, there are a few important things to consider.
Heavy discounts may lower profitability. So, you may want to consider impacts on both revenue and profitability when planning your promotion.
Frequent promotions could mean that customers might expect regular discounts. This could impact perceived product value.
Sales promotions may impact brand perception. Customers could see them as a reflection of lower quality.
Being clear on your objectives and planning any sales promotions well may help you maximise benefits and achieve your goals.
Below are some steps you may consider in planning your sales promotion.
Identify a specific objective or set of objectives for the promotion. This could be attracting new customers, clearing inventory or boosting short-term sales.
Select the type of sales promotion that aligns best with your goals and appeals to the customers you want to attract.
Set a budget and timeframe for the promotion. This can help you manage costs and profitability.
Develop a campaign to promote your sales promotion. Think about which channels you want to use to get your message out, including the role your website will play.
Consider areas of your business that may be impacted by increased demand and how you’ll manage that. This could include stock, staffing and your website or payments solutions.
Think about how you’ll measure the performance of your promotion. Will you be able to see what’s happening in real time? How easy will it be to adjust your promotion if needed?
Investing in marketing to build awareness around your sales promotion can help you achieve the best result. Think about the messages you want to communicate and where you can get them in front of potential customers.
To help boost your sales promotion effectiveness, here are some ideas you may consider:
Connecting with your target customers in the lead up and during your sales promotion will be a priority. Here are some ideas to consider.
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To offer the best customer experience possible, it can help to prepare your business operations for increased demand. This can also help you offer a safer, more secure shopping experience for your customers.
Below we unpack three key areas to think about.
Ensure your website is well set up to deliver a great customer experience during your sales promotion period. It can act as a powerful tool to communicate with your customers, provide product descriptions to help them shop and FAQs to answer common questions.
Think about if you need to upgrade your business website to help support your promotional activity. You may want to have a support plan in place to help you address any issues with your website quickly should they arise.
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Black Friday and Cyber Monday can be prime times for cyber threats. Monitor your site for any unusual spikes in traffic and have a response plan ready in case of incidents.
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If you have a physical store, think about staffing and how you’ll manage store capacity, especially during peak hours. Creating clear entry, exit and shopping paths for more efficient customer flow can help avoid congestion.
Think about how to manage transactions on the go if you think customer wait times could be extended. You could also consider new payments solutions to help keep queues moving.
Sales promotions can be powerful tools when aligned with your business goals and planned effectively.
Consider key retail periods, like Black Friday and Cyber Monday, Christmas and end of financial year sales. Customers may be actively look for promotions during these times.
Timing and preparation are key to helping sales promotions be successful and creating meaningful results for your business.
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