20 Effective Sales Promotion Strategies for Any Business

“Everybody loves a bargain,” discount department store chain owner Eugene Ferkauf told Time magazine back in 1961. Indeed, the prospect of saving money continues to motivate customers to do exactly the opposite: spend—and what better way to create that desire than with a sales promotion that offers a price discount, free trial, or cash back. Those are just three of 20 types of sales promotions described in this article that businesses and their marketing departments can use to their advantage, whether their goal is to boost revenue, acquire new customers, or clear out excess inventory, among others.

What Is a Sales Promotion?

A sales promotion is a classic marketing tactic used to spur customers’ awareness, interest, and ultimate purchase of a company’s products or service. Promotions can take many forms, from limited-time price discounts and free samples to bundled offerings and subscription programs. However, excessive or frequent promotions can potentially erode brand value—and profit—so sales promotions must be applied thoughtfully.

Key Takeaways

• Sales promotions are a powerful way to boost revenue and attract new customers.
• But marketers must plan these deals prudently to protect profit margins and perceived brand value.
• Popular types of sales promotions include discounts, first-time buyer rewards, and abandoned cart deals.
• The first step in kicking off a sales promotion is to identify its goal and target.
• Analytics and automated pricing tools can track promotion performance and inform future strategies.

What Is the Purpose of a Sales Promotion?

Halloween candy clearance sale! Subscribe and save! Buy one, get one! No matter the state of the economy, who personally or professionally wouldn’t want to get more for their money? Done right, sales promotions also make good business sense. That’s because they can:

• Increase revenue: A short-term promotion, such as a coupon or flash sale, can tip the scale in favor of more customers purchasing a product or service.
• Attract new leads: Offers of free trials, sample products, or first-time purchase discounts can capture contact information from potential customers, creating opportunities for sales to follow up.
• Market a new product or service: Promotions such as introductory pricing can generate early awareness, interest, and adoption of new business offerings.
• Make room for new inventory: Sales promotions are an excellent way to clear out slow-moving or excess inventory, which otherwise ties up capital and accrues ongoing carrying costs.
• Build customer loyalty: Loyalty programs, punch cards, and subscriber-only promotions encourage repeat purchases and higher spending.
• Upsell and cross-sell to existing customers: Product bundling and complementary services, such as a deal on an extended warranty, can encourage larger purchases and upgrades, increasing average order size while providing added value to customers.
• Maximize seasonal opportunities: Aligning promotions with specific seasons, holidays, or events helps businesses tap into predictable spikes in consumer spending. Conversely, certain promotions can sweeten the deal during an off-peak period—think: beach hotel offering steep discounts and added amenities during winter and spring.
• Counter the competition: Well-timed sales promotions can reinforce a business’s market share when new competitors enter the market, launch new offerings, or run promotions of their own.
• Gain market insights or customer feedback: Limited-time promotions allow businesses to test new offerings, pricing strategies, or marketing approaches with minimal risk. For example, testing different discount levels can reveal the threshold where customers are most likely to convert.

Pros and Cons of Sales Promotions

In the early 1990s, profits were falling for vacuum maker Hoover’s U.K. subsidiary, so it began promoting free roundtrip airline tickets within Europe with the purchase of £100 worth of products (about US$175 at the time). The promotion improved Hoover’s finances, so it extended the deal to U.S. flights. But this time around, the cost of the promotion far exceeded sales, leading to the eventual sale of Hoover’s entire European business.

As this example demonstrates, sales promotions can drive impressive results or significant losses. The results often depend on how well businesses understand the pros and cons.

Pros of Sales Promotions

When thoughtfully implemented, sales promotions can help organizations achieve important short-term objectives. Among their many advantages, promotions can:

• Increase sales and revenue by encouraging higher transaction volumes and larger orders.
• Generate awareness, enthusiasm, and buzz for new products or features.
• Speed up the sales cycle, especially when deals are time-sensitive.
• Clear out aging inventory while it still has value.
• Attract new customers, improve retention, and support expansion.
• Prompt online shopping cart abandoners to complete their purchases.
• Provide insight into customer behavior to inform future promotions.

Cons of Sales Promotions

On the flip side, sales promotions can potentially result in short- and long-term consequences when they’re not well-planned or executed. Among the disadvantages, they could:

• Interrupt cash flow, reduce product contribution margins, and hurt profit margins as the result of overdiscounting.
• Throw off forecasts due to temporary sales spikes.
• Damage a company’s brand image and perceived value.
• Train customers to wait for a promotions before purchasing.
• Complicate inventory management and fulfillment due to the sudden rush of orders.
• Require additional resources to advertise and support the promotion.
• Bog down staff who could otherwise work on other marketing endeavors.

20 Sales Promotion Strategies to Try

Making sure the pros outweigh the cons takes careful consideration. For instance, businesses should first calculate how much they’ll need to sell, at minimum, to cover their expenses (aka the break-even point). They must also understand how a promotion could impact their profit margins and brand reputation. With these important details factored into their planning, marketers will be ready to decide which of the following 20 sales promotion strategies to implement.

1. Discounts: Most sales promotions can technically be classified as a discount because they result in buyers paying less than the original list price for a product, service, subscription, event ticket, etc. Customers might save when buying in bulk or even receive something free. The “right” discount and type of sales promotion depends on the industry, target customer, and desired profit margin. For example, apparel shoppers are twice as likely to make a purchase with a 20% discount than they are at full price, according to ecommerce consultancy 2Visions.
2. Coupons and vouchers: Coupons are one of the oldest forms of sales promotion. Also known as vouchers in parts of Europe, they are used by businesses for a multitude of reasons—among them to attract new customers, build loyalty, increase sales, or stimulate larger order sizes by requiring a minimum amount to work, such as $5 off a $20 purchase. Most coupons expire by a certain date, creating a sense of “use it or lose it.”
3. Flash sales: Whether lasting for a few hours or several days, flash sales are time-sensitive deals that businesses employ for quick results, such as a spike in sales or to get rid of slow-moving inventory. Common examples include 24-hour clearance sales and early-bird specials. Flash sales create a sense of urgency that taps into shoppers’ instinctual fear of missing out. To amplify the effect, a group of researchers suggest using precise discounts (14.5%, not 15%), which consumers perceive as not lasting long and so pushes them to purchase.
4. Buy one, get one deals (BOGO): BOGO deals are another effective way of moving products off the shelves or creating a sense of greater value. The concept is simple: Offer customers a free or discounted product with the purchase of another item of at least equal value. Supermarkets run these promotions frequently, a la “buy one box of donuts, get another box free” or “buy one frozen pizza, get the second 50% off.” BOGO deals also work to stir interest in complementary products, such as “buy a smartphone, get 30% off a wireless charger.”
5. Free shipping and free returns: Other than a few minutes of time, what do shoppers have to lose when products they’re on the fence about can be shipped and returned for free? Indeed, according to a 2024 survey about consumer returns, 82% of respondents say return policies influence their decision to buy online. Of course, organizations must have the budget to cover these expenses without hurting their profit margins. This is why some companies stipulate a minimum amount must be spent to qualify—thereby increasing the average order size—or require an annual paid membership (think: Amazon Prime).
6. Add-ons, free gifts with purchase, and bundles: A multitude of marketing research from over the years shows that, when shoppers perceive they are getting more for their money, they’re more apt to make a purchase, switch from a preferred brand, or spend more to receive extras. Be it a free extended warranty on a hardware purchase, a bonus month of cybersecurity protection with the purchase of an annual subscription, or the complimentary configuration of enterprise software, this category of sales promotion also aids with customer retention. Giveaways don’t have to be expensive to be tantalizing, which is good news for small businesses.
7. Samples and free trials: Speaking of inexpensive, free product samples and service trials provide a commitment-free way to entice shoppers to try something new—and potentially become a paying customer. Software companies, for example, often offer 7- or 14-day free trials to interested prospects. And who can walk through a department store without being asked if they’d like to be sprayed with a new perfume or cologne?
8. Giveaways and contests: These promotions are fun ways to generate brand awareness, excitement, engagement, and revenue. Giveaways and contests provide people with the chance to win or compete for prizes as a reward for their business. For instance, for every purchase a customer makes during a specific time period, a business could enter them into a drawing for a $500 gift card. A video game competition could award free merchandise to the winner. Either example can help solidify customer loyalty and lead to additional sales.
9. First-time buyer rewards: Promotions aimed at first-time buyers get the seller-buyer relationship off to a positive start. They also pave the way for repeat business and brand loyalty. Rewards can take the form of discounted prices, free gifts, points that can be used toward a purchase, or cash bonuses. Banks, for example, frequently offer cash bonuses to persuade people to open new accounts.
10. Referral programs: It costs companies a lot to acquire new customers. Smart companies set up formalized programs to encourage and reward customers who recommend them to others and bring in new business (or some other qualifying action, such as signing up for a demonstration). It’s also a gift that keeps on giving: A paper in the Journal of Marketing Research shows that customers who were referred by others make up to 57% more referrals than customers acquired another way. Rewards for new customers include discounts, gift cards, and even cash.
11. Punch card programs: Free car wash after six full-service washes. Fifty percent off one menu item after 10 restaurant visits. Punch card programs are a type of loyalty program that aims to increase repeat business by rewarding shoppers with a complementary item, gift card, discount, service upgrade, or other bonus after they buy a specific number of products or services. Purchases are tracked via physical or digital punch cards, which the customers keep and the vendors mark off with each transaction.
12. Membership programs: As a late-1980s American Express ad campaign made famous, membership has its privileges. For customers, joining a company’s membership program gives them access to exclusive products, services, content, rewards, discounts, trainings, and other perks—all of which could be worth more than the program’s annual fee, if they spend enough. Businesses also benefit. First, the membership program itself is a source of revenue. Additional sales from repeat business is another plus, along with the myriad upselling and cross-selling opportunities that boost both average transaction value and customer lifetime value.
13. Subscription programs: Like loyalty and membership programs, subscription programs help organizations develop stronger customer relationships, reduce attrition, and grow sales. Under the subscription model, customers pay a monthly fee to receive products or services on an ongoing basis and often at a discount compared with nonsubscribers—which is why it’s considered a sales promotion tactic. From a business standpoint, subscriptions are an opportunity for recurring revenue. Common examples include streaming movies and music, access to cloud-based software and storage, tech support, and automatically shipped office supplies.
14. Partnerships and joint deals: Also known as collaborative marketing, this sales promotion pairs two or more complementary offerings that expose companies to each other’s markets, thereby boosting visibility and, hopefully, resulting in additional sales. These cost-efficient deals appeal to small businesses, such as a local gym that provides 10% off coupons to a nearby vitamin store, which, in turn, gives out passes for a free gym class. Other types of partnership deals to consider include affiliate marketing programs, where partners earn commissions for driving sales; sponsorships that connect brands with events or organizations that share the same audiences; and working with influencers who have large social followings in their target marketers.
15. In-person events: “The five senses have long been the gateway to decision-making over the logical mind,” states an article about the effectiveness of in-store wine tastings as a promotion strategy. Smart marketers understand that this holds true for nearly every product or service category, be it a software demonstration, immersive game experience, or fabric-sampling event. In-person events tap into the human desire for personal connection and interaction. They also help build trust, boost brand awareness, generate leads, and stimulate sales. In business-to-business markets, a solid one-third of decision-makers prefer in-person interactions at all stages of the buying journey, according to McKinsey & Company.
16. Online exclusives: Nearly 80% of small and midsize businesses have an ecommerce presence, according to a PMNTS report. Online-only deals can help these businesses stand out, boost sales, expand market reach, drive traffic to their websites, clear out inventory, and learn more about their customers. Promoting these deals as “exclusive” also evokes a sense of importance, which can help convert browsers to buyers. Online-only deals can even get people to change how they shop: Research from Big Commerce finds that 82% of consumers who prefer shopping in-store for home furnishings say they would switch to online if presented with an online-exclusive promotion. Social media posts, email blasts, website display ads, and paid search are some worthwhile channels for businesses to advertise these sales.
17. Abandoned cart promotions: Seven out of 10 shoppers failed to complete their online purchases in 2024, according to Statista. Chief among the reasons cited by the researcher: unexpected shipping costs, a long and/or complicated checkout process, mandatory account creation, and payment concerns. One way to counteract the lost business implied by abandoned carts is by retargeting those shoppers with ads or personalized emails that tempt them back to their carts with a one-time offer, such as a price discount or free shipping. A simplified checkout experience, guest checkout options, and acceptance of multiple types of payments are also best practices.
18. Cashback programs: The way this promotion works is that when a customer buys something, they file a form and the company sends them back a fixed amount or percentage of what they spent. As long as companies preserve their margins by being careful about how much money they offer back, cashback programs can be a potent way to tempt new and current shoppers to spend more and come back, often to use the cash they received.
19. Seasonal sales: Sales promotions tied to special occasions can lift revenue and profits during times of the year when consumers are excited and ready to spend. Holiday promotions, small observances like National Coffee Day, seasonal events like June weddings, and general seasonal themes like summer travel deals all present lucrative business opportunities that also help companies enhance visibility, gain new customers, inspire impulse purchases, and build loyalty.
20. Clearance sales: After all the peak shopping times have passed, what can businesses do to unload inventory that’s not selling well, will soon be obsolete, or was overordered? Clearance sales can prompt fast inventory turnover, which reduces a business’s carrying costs and frees up capital for other purposes. Clearance sales also appeal to price-conscious buyers who, if satisfied, may return for full-price purchases.

Sales Promotion Tips and Best Practices

A great deal alone doesn’t guarantee a successful sales promotion. From initial planning through post-promotion analysis, the following best practices can help marketing teams maximize returns and help build lasting customer relationships.

1. Identify Both the Target Audience and the Goal of the Sale

A solid marketing strategy begins with the team defining who they’re targeting and what they’re aiming to accomplish. Are you rewarding loyal customers for their repeat business or attempting to clear out last season’s inventory? Different promotions work better depending on the goal. For instance, first-time purchase discounts can attract new customers while member-exclusive deals help retain existing ones. Setting specific, measurable objectives, such as increasing average order value or reducing cart abandonment, helps teams create promotions that meet their business goals.

2. Choose Your Advertising Channels Wisely

Demographics tend to influence the different communication methods that audiences respond best to. For example, younger audiences generally engage more with social media promotions than their older counterparts, but business buyers lean toward direct email communications or in-person meetings. It’s a good idea for marketers to test multiple channels with smaller promotions before launching a major campaign. That way, they can see which are most effective for their target market and select the right combination of channels.

3. Make the Deal Feel Like a No-Brainer

When customers can easily figure out how much they’ll save or gain without pulling out their calculators or squinting to read the fine print, they’re more likely to act on a promotion—and not feel frustrated with the brand, either. They keys to making a promotion feel like a “no-brainer” are to craft a low-risk, high-reward scenario whose value proposition is immediately clear and compelling. Offers like “Buy 2, Get 1 Free” or “Free Shipping on Orders Over $50” meet that criteria. Such clear and concise offers also reduce the risk of misunderstandings or customer service reps burdened by a rush of inquiries.

4. Create a Sense of Urgency

When time is of the essence, customers have little choice but to make fast decisions. Limited-time offers and scarcity messaging in the form of flash sales, countdown timers, or inventory alerts (“Only 3 Left”) play right into the psychological fear of missing out. Keep in mind that promotions tied to urgency should reflect actual business conditions, such as genuine inventory limitations or seasonal changeovers. False scarcity can damage customer trust and brand reputation.

5. Don’t Overcomplicate How to Redeem Rewards

Multistep, cumbersome redemption processes that require multiple codes or long strings of numbers and letters frustrate customers and lead them to abandon purchases—which means lost revenue. Keep the process simple—whether it’s automatically applying discounts at checkout, offering one-click coupon activation, or providing clear instructions for in-store redemption—and ensure staff knows how to answer any customer questions.

6. Follow Up With the Customer Post-Purchase

A successful promotion doesn’t end at the sale. Rather, the time after a purchase is made represents an opportunity for marketers to build long-term relationships with customers. Sending personalized thank-you messages that include relevant product recommendations or information about upcoming promotions is one tactic. So is issuing another discount to encourage repeat purchases, though do so sparingly to avoid training customers to buy only during a promotion. Reaching out with short satisfaction surveys or requests for product reviews not only add touchpoints but can gather valuable feedback, too.

7. Leverage Technology to Measure Success

Analytics tools that track key metrics throughout a promotion’s life cycle can help marketers understand which promotions work best for specific audiences so that they can apply that data-driven insight to future campaigns. Analytics tools can monitor basic sales performance as well as more sophisticated metrics, such as average order value, customer acquisition costs, and redemption rates per channel. Customer relationship management systems also are valuable, as they can centralize tracking, reveal how customers respond to specific offers, and illuminate how promotional purchases influence long-term buying patterns.

Troubleshooting Sales Promotion Pricing Challenges

For all of their benefits, sales promotions can hurt profitability if pricing is mismanaged. For example, a 10% discount on a product with a 30% margin requires selling 50% more items just to maintain the same profit level. When running multiple promotions across different channels, these pricing scenarios become extra challenging, and manual processes and spreadsheets increase the risk of high-stakes errors.

NetSuite CPQ helps businesses manage complex promotional pricing while protecting margins. The cloud-based software automatically applies appropriate discounts based on volume thresholds or customer segments and implements approval workflows for discounts that exceed certain thresholds. CPQ can streamline an organization’s entire sales process with automated product configuration, pricing, and quote generation that help close deals faster. It can also help businesses manage subscription-based pricing models, product bundling, and pricing analytics. With NetSuite CPQ, companies can employ sales promotions with confidence, knowing their automated system will help them maintain pricing integrity and profit margins.

Sales promotions are a tried-and-true way of helping companies accomplish specific goals, whether it’s to attract new customers, clear out inventory, or many others. Marketers who can deliver results without sacrificing margins or brand perception help boost short-term sales and contribute to long-term business growth. Success boils down to thorough planning, precise execution, and consistent performance measurement.

Sales Promotions FAQs

How do I decide where to advertise my sales promotion?

The online and offline channels your target market prefers is where you want to advertise. For example, younger consumers are more likely to engage with social media promotions, but business buyers often respond better to direct email communications or in-person events.

How do I use psychology to persuade my customers to buy?

Urgency, exclusivity, and the fear of missing out are all powerful psychological motivators. A 24-hour flash sale with limited quantities, for example, plays into all these triggers, communicating to customers that they must act quickly.

How do I know if my promotion worked?

Leading analytics tools and customer relationship management systems that track key performance indicators (KPIs) throughout a promotion’s life cycle can tell you much about its effectiveness. Important KPIs to monitor include revenue generated, new customer acquisition rates, profit margins on promotional items, and customer engagement levels across different channels.