Sales promotion

Buy 1 get 1 free sign

Sales promotions aim to provide a short-term boost to sales. While a straightforward price cut is one option, other incentives can also be used effectively - costing less to implement, but providing a bigger increase in sales

The most straightforward sales promotions are variations on price reductions. These include special offers, money-off vouchers, buy-one-get-one-free (BOGOF) deals or 20% extra free, giving the customer more for their money.

But sales promotion are limited only by your imagination. For example, you could run a competition to draw attention to your product. Free gifts also work well: the trick is to find a gift that is inexpensive but at the same time attracts customers. A related form of sales promotion is based on a tie-in with another product (such as a new movie) or a good cause. Longer-term, loyalty programmes can help retain customers and boost sales.

Merchandising and field marketing

Most sales promotion activity is focused on the places where your product is sold. Visual merchandising displays aim to make your product more visible, encouraging consumers to make an impulse purchase or to choose your brand over a competitor's. As well as point-of-sale displays, other merchandising options include encouraging retailers to devote more shelf space to your products or offering specially packaged products such as Christmas gift sets.

For added impact, you can send in your own field marketing people to help retailers sell your products. You could run a demonstration of your product in a store or at an event. If you cannot provide your own staff, you could outsource activities like this to a field marketing agency.

Another alternative is to aim your sales promotion at the intermediary rather than at the end-customer. For example, you could offer a short-term discount to retailers, or free branded goods for sales staff. Many sales promotion ideas can be adapted to target the trade instead of consumers, or both.

Sales promotion strategy

Although individual sales promotions are short-term, tactical activities, sales promotion can raise important strategic issues. Clear objectives can help you understand which sales promotion ideas will work for you and how they fit with other marketing activities such as advertising and SEO.

Although price cuts may increase sales, they also shrink margins. Short-term sales increases may be at the expense of future sales - for example, if customers have bought two for the price of one. Unless sales promotions attract new customers, the overall effect may be to reduce profits. So while sales promotion can work well for new product launches, there are risks with existing products.

You should also think carefully about how sales promotions affect your brand. Regular price discounting or a poor quality free gift might devalue your brand. On the other hand, a well-planned loyalty scheme could strengthen your image and provide you with useful data on your customers' purchasing behaviour.