Sales promotion: Meaning, needs, and benefits


In 2021, your sales promotion strategy in marketing can do at least one out of the following two things:

1. Boost average order value, improves customer retention, drive conversions, preserve brand equity, optimize ROI, protect margins and profitability on every traditional as well as digital marketing channel


2. Erode brand value perception, leak conversions and sales, train customers to buy only at a discount price, provide a poor customer experience, eat away profit margins, and harm customer lifetime value metrics.

Well, we would love to hedge a bet that 90% of businesses want promo and discounting sales promotion strategy to land in the first camp.

This article will help you understand the elements of strong sales promotion strategies, its goals, and benefits, so that your team can plan and improve every sales promotion technique that matters the most in 2021, especially to all the e-commerce companies.

What is a sales promotion?

A sales promotion is basically a marketing approach to motivate customers to take a specific and pre-determined action through incentives, offers, and sales discounts. It is sometimes referred to as a discounting strategy.

Well, it is just not limited to discounts, offers, and holiday promotions by running marketing campaigns.

These are only a part of your marketing strategy. The overarching plan needs to understand dynamic, evergreen, and personalized promotions as well.

If you are setting up a sales promotion strategy with a purpose to acquire new customers, we bet you this is absolutely a weak approach. Though customer acquisition is one of the biggest benefits of a solid strategy, but the best sales promotion techniques are used in every stage of marketing funnel.

Many businesses refer marketing campaign as sales promotion techniques; however, this is a misnomer, as every marketing campaign doesn’t need to have a sales promotion strategy attached to it.

Why needed a strategic approach to sales promotions?

The goal of any sales promotion strategy is to engage the customers like the exact way they need to be engaged to encourage customers for journey continuity.

It is obvious that the goal of your specific promotion strategy might be more granular than the goal of your overall strategy. For instance, if you are running a BOGO offer with the goal of clearing seasonal inventory or repeat purchases with a 20% discount to improve customer retention.

It will help a business to improve virtually all conversion funnel metric while executing a well-crafted, data-driven strategy, with the purpose of protecting brand equity and profitability.

The benefits of formulating strategic sales promotion techniques:


You marketing team has a lot on its plate between

  • A/B Testing
  • Running marketing campaigns
  • Prioritizing growth experiments
  • Measuring and optimizing key e-commerce KPIs
  • Launching new products
  • Managing several marketing channels

Along with hiring, onboarding, recruiting, online merchandising, managing contractors, and a million of other things. You can focus your resources on other demands and adopt a set-it and forget-it approach to your sales promo strategy.

20% welcome coupon on black Friday BOGO sales, that is offering free shipping across the board…

Why make this more complicated?

Taking a strategic approach to sales promotions comes with a host of benefits, providing an upside to the health of the company’s marketing channel and it is one of the crucial aspects of your marketing program.

Let’s break these benefits:

1. Conversion rate optimization at all stages of marketing funnels:

Ahh! talking about conversion rate optimization- every marketing team’s holy grail. CRO is the most coveted benefit in the marketing buzz of the century, taking a strategic approach to your offers and discounts.

It is best to optimize only the sales conversions that will have potential future revenue and brand equity on the table. After all, it is better to engage the first-time visitors differently than repeat customers, as they are least likely to convert.

2. Boost margins:

If you are adopting a 40% off sales promotion strategy, the customers will probably convert really well, no matter what is your pricing strategy. More you need to spend on marketing and growth when you offer greater margins.

A solid sales promotion strategy will boost profitability and maximize your margins that will make your marketing program sustainable over the long-term.

3. Customer lifetime value and customer lifecycle:

It is well-known research that the customer lifetime value is lower if you provide with the higher discounts to your first-time customers.

Higher discounts have lower value customers

It makes a sense too. If your customers make their first purchase of your product with 20% discount, why will they pay full price of the product the next time? Moreover, if they are returning to your store the next time, they will expect similar discount offers and if they won’t find any, they will leave your store without converting.

4. Protected profitability and increased ROI:
every marketing team knows the struggle of forming marketing campaigns that will drive conversions without hitting margins, especially on paid channels.

This can be tough! The 10% coupon will seem reasonable for first time visitors that come from organic search on the Internet, but the margins quickly crumble when you need to pay for that organic traffic through advertisements on social media or affiliate marketing.

Check out the impact of 10% discount on marketing channels:

5. Preserves brand perception:

Brand perception means what you customers believe about your brands and how they view it. Brand perception comes from how the customers are viewing your store, saying about a particular brand on social media, to the reviews of the products and of course, sales promotion strategies.

In traditional marketing, people would only know about a brand that is running a heavy sales promotion, or only to those who stopped near your store and read the hoarding or perhaps received the flyer.

But one thing a business must understand that repeated exposure to heavy discounts might work in the retailer’s favour but it can seriously harm the customers’ perception about your business.

6. Excellent customer experience:

Your team is working hard to target the right customers with marketing campaigns and promotion techniques. Your entire work is wasted unless you provide an excellent customer experience. The journey of customer satisfaction starts even before they visit your store or lands on your e-commerce website. It totally depends on how well you treat them and how you target these audience.

Wrapping up

In this article we learned about the meaning, needs, and benefits of sales promotion. In the next blog, we will be learning about how to effectively formulate the sales promotion techniques.

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