As the growing needs of consumers and businesses continue to evolve in the modern world, so will the sales promotion activities and techniques that businesses will use in order to attract new customers and retain their current ones.
In this article we will explore different sales promotion tools and techniques which businesses can use in order to stay competitive in a constantly evolving landscape. It’s important to note that there are essentially two different types of sales promotion tools: consumer oriented promotional tools and trade oriented promotion tools.
Consumer oriented promotion tools and methods are those which focus directly on increasing sales to existing customers and attracting new customers to the business. Current customers can benefit from discounts, promotional pricing, volume discounts and much more.
New customers can benefit by getting introduction to new services and products, introductory pricing discounts, referral bonuses and much more.
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Below are some of the popular consumer oriented promotional tools used by companies in order to increase their sales and expand their customer base.
Who doesn’t love a good discount? A discount is a temporary reduction in the price of a product or service for a specific period of time. It is often used to get new customers and clients in the door as the lower price is meant to serve as an incentive for them to buy your product or service. It can also be used to treat long term customers and provide them value for their loyalty.
Free samples are an extremely underrated way to get new customers and retain old ones. They are small units of free samples which are given to customers, new or old and tend to be given during the introductory stage of a new product launch.
They are meant to generate buzz and interest in a new product or service and are a great way to get customers real reaction and opinion about a product or service.
A company that does this quite frequently is Costco. They are always giving out small free food samples in order to promote a new product or brand in their store and customers absolutely love it.
Premium offers are extra quantities of the same existing product or service at a regular price. They tend to be available to new and existing customers for a temporary period of time, sometimes in order to move products quicker.
Nothing says customer appreciation better than some cash back. It’s one of the most effective ways to get customers to spend more and keep coming back to spend some more again. Cash back rewards incentivizes customers to spend more money in order to get some in store cash for future purchases.
It’s a great mechanism to develop customer loyalty and gain consistency in your cash flow as a company.
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Returns on the other hand are pretty much expected at any company or business. Having a customer friendly return policy is important in order to create a great customer experience. Common return times include anywhere from 30 days and up to 6 months in some rare cases.
Coupons are like small doses of dopamine for people who love to shop. It’s a small certificate that gives buyers a savings when purchasing a specific product or service. Coupons are notoriously used by grocery stores and clothing stores, but almost all consumer based product companies tend to have a coupon system in place.
Volume pricing is a consumer based pricing technique which involves lowering the price of certain goods or services if a customer chooses to buy a higher volume. The average per item cost tends to be less for the customer due to them buying a higher amount.
It incentivizes customers to spend more in order to save more and is what drives Costco's business model that has made them so successful as a wholesale market.
These are point-of-purchase displays that are meant to drive sales to low cost items that are meant to compliment a customer's experience.
These can include items such as candy, magazines when you’re sitting in line at your local grocery store or sweepstakes at a local dealership or clothing store.
Trade-oriented sales promos are geared towards dealer networks of different companies which are motivated to sell a company's products.
They are targeted specifically towards dealer networks for sellers so brands can push their product onto consumers. Some of the common trade-oriented sales promotion strategies are outlined below.
Trade show displays are a common way companies promote and showcase their new and existing product lines. It’s a direct way for different distributors and dealers to gain an idea of what kinds of products and services your company offers.
Trade Show Displays are also set up in a way which induces people to stop, think and really picture themselves with the product or services and how it can help customers.
Most cash bonuses in trade oriented promotional techniques tend to have a varying degree of volume which must be met in order to receive a cash bonus. Cash bonuses are offered in order to incentivize higher levels of sales and help customers get a lower price point.
It's worth noting that cash bonuses tend to be harder to meet for most common consumers because of the massive volume that must be purchased in order to receive a cash bonus.
A push incentive is a special incentive that is given to dealers or distributors of products, typically in the form of cash or credit terms in order to “push” or promote the sale or a product to a large customer base. The goal with push incentives is to get a rush of buyers in order to gain feedback about a product and to generate quick sales.
Credit terms are extended to companies and businesses who have had a previous history of doing business with a company in large volumes. Credit terms encourage bulk orders from retailers and are typically only extended if there is a good long term relationship and past history of payback.
These are just a few of the many popular sales promotion tools and techniques that are available to businesses in order to scale their revenue. It’s worth noting that these techniques and strategies will vary widely based on the size and needs of a business.