Sales promotion: Definition, examples, and types

No matter how successful a business is, every company is going to find moments where they need a sales boost. It might be towards the beginning to build a customer base or somewhere down the line when sales are slow. This is when it’s time to introduce a sales promotion.

Promotions are foundational elements for strategies in both sales and marketing. Read on to learn all you need to know about sales promotions and discover 14 different types of promotions that can increase sales.

More in this guide:

• Benefits of sales promotion
• Cons of sales promotion
• Types of sales promotion
• Sales promotion strategies
• Preparing your sales team for a successful promotion
• Optimal avenues for running your sales promotion
• Sales promotion ideas
• Drive sales promotion with better customer service

Benefits of sales promotion

In the short term, sales promotions lead to several potential benefits. Let’s explore them in more detail.

Creates new leads

Sales promotions increase customer acquisition by offering them discounts, free products, free trials, and more. Many potential sales leads are willing to try something for a lower price. You can start tracking consumer behavior in a marketing CRM. If they like the product, they become part of your company’s loyal base.

Introduces a new product or service

Even extremely successful companies need a little help launching a new product. New customers may need incentives to buy, and long-term customers may be committed to their usual products. Providing a discount or promotion on a new product is a great way to create product awareness without doing a sales presentation.

Clears out overstock

When overstocking inevitably happens, a sales promotion can be a useful tool to get rid of inventory while attracting new customers who may not have the overstocked product yet. It’s worth noting that there is a line in terms of selling overstock. It’s wise to exercise caution, stick to ethical selling, and avoid manipulative tactics.

Rewards current customers

Sales success doesn’t stop at the first purchase. Nurturing customers over time is essential to keeping brand credibility and loyalty high. Sales promotions are an easy way to provide loyal customers with a discount, voucher, or free product that will continue to keep them engaged with your brand.

Increases last-minute revenue

Many companies use sales promotions at the end of a month or quarter to meet revenue or inventory goals. While this is not a bad strategy, it’s best to use it sparingly so that customers don’t get into the habit of waiting for an expected sale, which can be detrimental to maintaining a healthy sales volume during the rest of the year.

Gives valuable insights

Sales promotions provide a direct window into customer behavior, revealing which offers resonate most strongly—essentially tips on how to sell better. Analyzing the performance of different promotions helps businesses understand customer preferences and tailor future marketing strategies. These insights can inform product development, pricing decisions, and overall customer engagement efforts.

Maximizes sales in off-seasons or slow periods

Strategic sales promotions can revitalize sales during traditionally slow periods, ensuring consistent revenue flow throughout the year. Businesses can attract customers who might postpone their purchases by offering targeted discounts or incentives. This approach helps maintain operational stability and prevents significant revenue dips during off-peak times.

Cons of sales promotion

While most sales promotions do successfully increase sales, many also come with a cost. When considering using a sales promotion, it’s important to remember the main risks:

• Sales promotion can devalue your brand: While it may not be the case for your company, there is a general assumption in the consumer market that if a brand goes on sale, it’s because they are having trouble selling that product. While promoting a single product in your line might not make a lasting impression, a sales promotion covering your entire brand might make customers think your business is on its last legs.
• Sales promotion can complicate selling your product at its original price point: Depending on how long your promotion runs, you may attract customers who never paid full price for your product. These customers may then be turned off when you return to full price at the end of a promotion. Set strict promotional timelines and leave space in between promotions to make sure your original price is the most consistent one.
• Sales promotion can generate misleading sales data when you introduce a new product at a discount: Introducing a new product at a discount can create a surge in initial sales, but it might not accurately reflect long-term market interest. Customers drawn in by the discount may not be willing to pay the full price later, and sales could drop after the promotion ends. Analyze sales data beyond the promotional period to gauge genuine demand.

Considering these risks can help you tailor your sales promotion to successfully support your sales goals and drive growth.

Types of sales promotion

There are 14 main types of sales promotions. Each one offers unique ways of boosting sales and connecting with customers through different methods of sales psychology. Each is also an interesting take on SPIN selling, or comparing the sales situation, problem, implication, and need-payoff.

1. Competitions and challenges

Competitions or challenges usually take place on social media and serve to increase customer engagement as fans try to win a discounted or free product. They usually also result in a large amount of free publicity if the competition or challenge involves sharing the brand on a customer’s personal social media account.

2. Product bundles

Product bundles offer a collection of products for an overall discounted rate instead of buying the products individually. Product bundles give customers a reason to buy a larger variety of products, which makes it more likely they will find a product they like and want to buy again.

3. Flash sales

Flash sales are extremely short sales that offer extreme discounts for a limited amount of time. These sales work by creating a sense of urgency and need around your sale.

4. Recurring sales actions

Recurring sales actions build anticipation and predictability, encouraging customers to plan their purchases around known discount periods, like a President’s Day sale in February or an end-of-season blowout for seasonal products. These actions create a consistent rhythm that fosters customer loyalty—plus, they can help businesses manage inventory flow and maintain a steady stream of sales revenue.

5. Free trials

Free trials or demos are one of the most common sales promotions and one of the most promising strategies to grow a customer base. Businesses can offer either a limited time with the product or a limited quantity of the product to a first-time buyer at no charge to see if they like it.

6. Free shipping and/or transfers

Free shipping promotions attempt to curb the percentage of customers who abandon their carts when they see the shipping costs. The small loss in shipping fees is usually made up for in happy customer purchases.

7. Free products

Free product promotions work by offering a small free product with the purchase of a larger, mainstream product. This boosts mainstream sales without costing the company too much inventory or revenue.

8. Limited-time exclusive freebies

Limited-time freebies generate excitement and a sense of urgency, driving immediate customer action. These promotions offer unique value that can’t be obtained at any other time, making them highly desirable. A limited quantity of exclusive free items also helps create buzz and enhance customer perception of your brand.

9. Early-bird or first-purchaser specials

These specials offer discounts to first-time purchasers to welcome them as customers. Customers are more likely to buy at a discount, and because the discount only works once, the company doesn’t lose much revenue.

10. Memberships and Subscriptions

Memberships and subscriptions create a recurring revenue stream by offering exclusive discounts and benefits to loyal customers. These programs incentivize customers to commit to long-term purchases, which can foster a sense of community. Plus, offering a percentage discount in exchange for a commitment to multiple purchases or a longer contract term ensures consistent sales and customer retention.

11. BOGO specials

BOGO, or “buy one, get one free” promotions, are primarily used to spread product awareness. Customers can give their extra product to a friend or family member and build a customer base through word of mouth.

12. Coupons and vouchers

Coupons and vouchers reward current customers for their brand loyalty and encourage future purchases. This is especially effective in companies that use punch cards, which incentivize customers to make multiple purchases to earn a free product.

13. Upsell specials

Upsell promotions are not as common as the others, but they can still be extremely effective. Upsells give first-time customers a less expensive version of a product to try, and then, over time, the sales department works to convince them to purchase the more expensive and more effective option.

14. Shop and support: A portion of your purchase will be donated to charity

Shop and support promotions appeal to socially conscious customers, allowing them to contribute to a cause while making a purchase. Partnering with reputable charities can enhance brand image and attract customers who value ethical consumption—it can also increase brand advocacy by making customers feel confident in recommending your products or services to their like-minded friends and family.

Sales promotion strategies

As we’ve seen, sales promotions come in a wide variety and can be used as a sales strategy at any point during the sales process. Therefore, it’s important to be aware of best practices, activities, and techniques that will ensure your promotions are successful.

There are three primary strategies for sales promotions: pull, push, and a combination of both.

Pull strategy

The pull strategy tries to get the customer to ‘pull’ the product away from the company, usually in the form of a discount, BOGO, or another special. This is the most commonly used strategy across all businesses.

Push strategy

The push strategy tries to ‘push’ the products away from the company towards the customer, usually through B2B sales. Parent companies will reward distributors and retailers for taking additional products off their hands and selling them to consumers.

Hybrid strategy

As the name implies, the hybrid strategy merges elements of both the push and pull promotional strategies. In this approach, a company initially employs a push strategy to efficiently move its products through the distribution channels and into retail locations.

Once the product is readily available on store shelves, the company then shifts its focus to a pull strategy. This second phase aims to stimulate consumer demand and drive purchases directly from the retailers.

Preparing your sales team for a successful promotion

Your sales team is often the frontline ambassador of your brand. They need to be prepared for any promotion you plan to put in place. Their intimate understanding of the customer journey, gleaned from daily interactions, provides valuable insights into things like:

• Common obstacles that prevent deal closures

• Factors that consistently lead to successful sales

• Which sales enablement tools prove most effective

By sharing this knowledge, the sales team contributes to the promotion’s execution, ensuring it resonates with the target audience. And if your sales team is the primary point of contact for customers during the promotion, thorough training and clear communication can help them address customer inquiries and maintain consistency throughout the promotion period.

Give them easily accessible resources, like:

• Self-service help desks and FAQs
• Sales scripts for different scenarios

• Simple ways to access backend support

The more resources your sales team has to choose from, the more potential for a successful promotion. Keep this in mind when choosing customer experience software, as an AI-driven tool like Zendesk can help by autonomously creating helpful resources, answering specific questions from sales reps and customers, and much more.

Optimal avenues for running your sales promotion

Launching a successful sales promotion requires selecting the right channels to maximize reach and impact. Each of the following avenues offers unique advantages for engaging your target audience:

• Email marketing: Direct and personalized communication to existing and potential customers.
• Facebook and Instagram marketing: Visual-centric platforms for broad reach and targeted advertising.
• SMS messaging: Immediate and concise communication for time-sensitive promotions.
• Affiliate marketing: Leveraging third-party networks (like couponing pages or influencers) for expanded reach and credibility.
• Events, trade shows, and conferences: In-person engagement for building relationships and showcasing promotions.

Oversaturation is a risk when launching sales promotions. Be sure to focus on the channels your target audience uses most when communicating with your team or shopping for your products or services.

Sales promotion ideas

Sales promotions can invigorate your brand and drive sales through creative customer engagement. Here are ten distinct sales promotion examples to inspire your next campaign:

• Mystery discount codes: Offer tiered or randomized discount codes, adding an element of surprise to purchases.
• “Spend more, save more” tiers: Implement tiered discounts based on purchase value to encourage larger orders.
• Product pairing discounts: Offer discounts when customers purchase complementary products together.
• Interactive online quizzes or polls with rewards: Engage customers with interactive content that leads to personalized discounts or offers.
• User-generated content contests: Encourage customers to create and share content related to your brand for a chance to win prizes.
• Limited-edition bundles: Create exclusive, time-sensitive product bundles that offer unique value.
• “Second chance” discounts: Offer discounts to customers who abandoned their shopping carts.
• Birthday or anniversary promotions: Personalize offers for customers on their special occasions.
• Educational workshops or webinars with exclusive discounts: Combine value-added content with promotional offers.
• Charity donation matching: Match customer donations to a chosen charity during a specific period.

Don’t be afraid to experiment with different strategies and track their performance to optimize your results. Tailoring your approach to your audience’s preferences and your budget is key to promotional success.

Drive sales promotions with better customer service

The key to sales promotion success is knowing your customer base and having a reliable handle on your finances, revenue, and team statistics. With powerful AI-powered customer service software from Zendesk, you can track key customer service metrics in a centralized database for a 360-degree view of the customer.

To learn how to get started on your sales plan, download our free guide and access key sales plan benefits, features, goals, and more.