When it comes to sales promotion, there are six main types that businesses use to drive sales and increase customer loyalty. These include:
Tiered Promotions (Buy More, Save More)
Tiered discounts refer to giving customers a higher percentage of what they actually spend. For example, if a customer spends $100 on a product, they may receive a 10% discount. If they spend $200 on the same product, they may receive a 20% discount. This type of promotion encourages customers to buy more in order to save more.
Subsidy is a type of promotion where the business pays part of the cost of the product or service. This type of promotion is often used to encourage customers to purchase more expensive items or services.
Merchandise subsidy is similar to subsidy but instead of paying part of the cost of the product or service, the business pays for merchandise related to the product or service. For example, if a customer purchases a laptop, the business may offer them a free laptop bag.
Price offers are promotions that involve offering customers discounts on products or services. This type of promotion is often used to encourage customers to purchase items that are not selling well or to increase sales during slow periods.
Premiums are promotional items that are given away for free with the purchase of a product or service. These items can range from small items such as keychains and pens to larger items such as t-shirts and mugs.
Cooperative advertising is when two businesses join forces to promote each other's products or services. This type of promotion is often used by businesses that have complementary products or services.
Sales contests are promotions where customers can win prizes for purchasing certain products or services. This type of promotion is often used to encourage customers to purchase more expensive items or services.
Buying points are promotions where customers can earn points for purchasing certain products or services. These points can then be redeemed for discounts on future purchases.
Sales promotion is an effective way for businesses to increase sales and attract new customers. By understanding the different types of promotions available, businesses can choose the right ones for their needs and maximize their return on investment.