What is a Sales Promotion?

Learn about the definition of a sales promotion, what types of sales promotions their are (and why to use each), sales promotion technology and more!

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    What's a Sales Promotion? A Definition

    A sales promotion is a marketing tactic designed to stimulate sales of a product or service by incentivizing consumers or trade partners through a variety of promotional activities. It’s a crucial component of the marketing mix. An individual sales promotion is typically designed to drive short-term sales increases, but sales promotion campaigns can serve broader marketing objectives beyond immediate sales generation. For instance, promotional campaigns may aim to build brand awareness, generate buzz around a new product launch, encourage trial among target audiences, expand engagement, or reward loyal customers for their continued support. Go here for real-world sales promotions to give you ideas for your brand: 8 Sales Promotion Examples

    Consumer-oriented sales promotion strategies often focus on providing tangible benefits or added value to consumers, such as cost savings, convenience, or enhanced product experiences. For example, an instant win offer can drive purchases and provide the excitement of a chance to win something while enjoying a product they’re already a fan of. Providing a reward that resonates with a consumer – for example, related items, more product, experiences or cash-back – can have a significant impact on the success of a promotion. Layering a sweepstakes offer for a larger prize adds an extra thrill and can help drive repeat purchases (as well as get more buzz online). On the other hand, offering a limited-time discount or gift with purchase (GWP), Buy/Get or BOGO offers on a product can entice price-sensitive consumers to make a purchase they might otherwise postpone. 

    Providing free samples allows consumers to experience a new product firsthand, reducing perceived risk and increasing the likelihood of future purchases. By understanding consumer motivations and buying behaviors, marketers can tailor sales promotion efforts to resonate with their target market effectively. This consumer-centric approach ensures that promotional offers and incentives are relevant, appealing, and capable of driving desired actions, such as making a purchase, trying a new product, or increasing brand loyalty.

    To get the maximum value from sales promotions, many brands utilize them strategically throughout the year, running a series of promotions that focus on key shopping windows, seasonal events, or relevant micro-occasions. Some brands may tie promotions to key sporting events, while others may focus on seasonal events, like “back to school”, “summer/grilling season”, “holiday season” or “allergy season” – see this useful 2024 Retail Calendar with an exhaustive list of events, windows, and occasions. On top of that, some brands have over-arching customer loyalty programs and utilize a series of promotions tied to these programs to drive engagement, sales, and new loyalty program registrations. 

    By aligning sales promotion efforts with overarching marketing goals, businesses can maximize the impact of their promotional initiatives and drive sustainable business growth over the long term.

    Benefits of Sales Promotions

    Sales promotions offer various benefits to brands looking to increase visibility, drive sales or increase product trials. First, they can generate immediate revenue by enticing consumers to make purchases through discounts, coupons, BOGO/GWP offers and other incentives. In addition, sales promotions can increase brand visibility and awareness, especially when coupled with strategic advertising efforts, social media, user-generated content (UGC) or influencer campaigns. This can help businesses to attract new customers and retain existing ones. Sales promotions can also encourage trial and experimentation with new products or services, allowing businesses to extend their product portfolios. Furthermore, by rewarding loyal customers and offering exclusive deals, sales promotions can enhance customer loyalty and retention rates, fostering repeat business and advocacy. Sales promotions serve as powerful tools for driving sales, building brand equity, and cultivating lasting customer relationships.

    Sales Promotion Strategies

    Sales promotions in marketing are a tactic to drive short-term sales and awareness, but successful brands utilize them more strategically. More impactful sales promotion strategies will involve mapping out a series of promotions throughout the year that build on each other or have some common themes or elements running through them. This allows more efficient use of creative, infrastructure, agencies, and planning time. It also provides a cohesive brand experience for the consumers. In addition, the best using an omnichannel approach to sales promotions improves participation rates and also helps with a better brand experience as well. As mentioned above, running promotions as part of a broader loyalty program allows you to keep up engagement (via a loyalty platform) with the loyalty members and the promotions can help drive new membership and more engagement from existing members.

    Types of Sales Promotions

    There are a variety of sales promotion types designed to stimulate consumer interest, encourage purchases, drive sales, and grow loyalty and advocacy. Some common examples include:

    • Contests and Sweepstakes: Organizing promotional contests or sweepstakes with prizes, such as cash rewards, gift cards, or product giveaways, to engage consumers, drive participation, and create excitement around the brand.
    • Rebates: Offering cashback or refunds to customers who submit proof of purchase within a specified time frame, encouraging sales while mitigating price objections and perceived risk.
    • Buy One, Get One (BOGO) Offers: Providing customers with an additional product or service for free or at a discounted price when they purchase one at full price.
    • Gift With Purchase (GWP) Offers: Providing a gift with a purchase of a product. Can be a related product or something like a digital product (e.g. digital cookbook).
    • Discounts: Offering price reductions on products or services, such as percentage discounts, dollar-off deals, or buy-one-get-one (BOGO) offers, to encourage immediate purchases and attract price-sensitive consumers.
    • Coupons: Providing printed or digital vouchers that entitle customers to discounts or special offers when redeemed at the point of sale, incentivizing repeat purchases and stimulating demand.
    • Limited-Time Offers: Introducing time-sensitive promotions, such as flash sales, seasonal discounts, or holiday specials, to create a sense of urgency and prompt immediate action from consumers.
    • Samples: Distributing free product samples to allow consumers to experience the offering firsthand, increasing product trial and generating positive word-of-mouth recommendations.
    • Bundling: Creating product bundles or packages that combine multiple items at a discounted price, encouraging customers to purchase complementary products together and increase their average order value.
    • Customer Loyalty Programs: Implementing rewards programs that offer points, discounts, or exclusive perks to incentivize repeat purchases and foster customer loyalty over time.
    • Cross-Promotions: Collaborating with complementary brands to create joint promotional campaigns or exclusive product offerings, leveraging each other's audiences and expanding reach.
    • Point-of-Purchase Displays: Placing promotional displays, signage, or product demonstrations at the point of sale to attract attention, highlight special offers, and drive impulse purchases.
    • Referral Programs: Encouraging existing customers to refer new customers by offering rewards, discounts, or other incentives for successful referrals, leveraging word-of-mouth marketing to acquire new customers cost-effectively.

    These sales promotion activities can be tailored to suit specific marketing objectives, target demographics, and industry dynamics, providing businesses with versatile tools to drive sales growth and enhance brand visibility.

    Sales Promotion Agencies and What They Do

    A sales promotion agency is a specialized firm that provides services to businesses seeking to plan, execute, and manage their sales promotion activities and campaigns. These agencies typically offer expertise in various aspects of sales promotion, including strategy development, creative design, implementation, and evaluation. Sales promotion companies work closely with their clients to understand their marketing objectives, target audience, and competitive landscape, devising tailored promotional strategies and tactics to achieve desired outcomes.

    Sales Promotion Tools & Technologies

    Sales promotion relies on a variety of tools and technologies to plan, execute, and measure promotional activities effectively. Some sales promotion tools and technologies include:

    • CRM Software: Manage customer relationships, track leads, and analyze customer data.
    • Email Marketing / Marketing Automation: Create, send and track promotional email campaigns, including personalization and targeting; run nurturing campaigns.
    • Social Media Management: Schedule posts, monitor engagement and analyze performance.
    • Digital Coupon Platforms: Create, distribute and track digital coupons and discount codes.
    • POS Systems: Discount codes, loyalty programs, coupon redemption at point of sale.
    • Mobile Marketing Apps: Engage via push notifications, SMS or location-based offers.
    • Analytics and Reporting: Analyze traffic, engagement, customer data, and campaign results.
    • Content Management System: Manage web pages, offer pages and sign-up forms.
    • Sweepstakes Management & Contest Management Platform: Manage sweeps and contests including registration, offers and submissions.
    • Customer Loyalty Platform: Manage loyalty program, member analytics, promotions and offers.
    • Rebate Management System: Manage rebates, rebate submissions and redemption.
    • Receipt Processing System: Collect receipts, manage receipt validation and fraud analysis; do purchase and non-purchase verification.
    • Influencer Marketing Platform: Manage discovery and connection with influencers; manage campaigns, analytics and payment.

    Sales Promotions for Marketing Should Be Strategic

    A sales promotion is a dynamic marketing strategy that leverages a variety of promotional tactics to stimulate consumer action and drive both short- and long-term sales growth. By adopting a consumer-oriented sales promotion approach, businesses can create compelling offers and incentives that resonate with target audiences. To fully realize the benefits of sales promotions, brands should create longer-term strategies tying multiple promotions together (sometimes under the umbrella of a loyalty program) to help them achieve their sales objectives while also enhancing brand loyalty and customer engagement.

    To learn about Snipp’s Contest and Promotions management Solution, click here or contact us

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