Sales promotion tools and techniques: consumer, trade and B2B examples

Sales promotion tools are short-term incentives that give people a reason to buy now rather than later. For customers, the main tools are discounts, coupons, samples, bonus packs, rebates, loyalty rewards and contests. For resellers and other trade partners, they are allowances, dealer loaders, trade contests, displays, training and spiffs. Used well, promotions win trial and move stock. Used too often, they teach buyers to wait for the next deal.

What is sales promotion?

Sales promotion is one of the elements of the promotional mix, alongside advertising, personal selling, direct marketing and public relations. It runs for a limited period and aims to lift demand or improve availability. It is a tactical, short-term tool rather than a brand strategy, which is why it works best as part of a wider plan. See our guide to the marketing mix and the four Ps of marketing.

There are two main types:

• Consumer promotions target the end buyer to make them purchase.
• Trade promotions target wholesalers, retailers and other channel partners to make them order, stock and sell the product.

What are the main consumer promotion tools?

Discounts and price deals

A temporary cut in price, such as 20% off for two weeks. Discounts bring in new buyers and reward existing ones, but frequent discounts can lower the price people consider normal. Set an end date and stick to it.

Coupons

A coupon gives a saving on a specific product, either printed, digital or as a code at checkout. Codes are easy to track, which makes them useful for measuring which channel or partner drove a sale.

Free samples and trials

Sampling lets people try a product before buying. It is common at launch, when the main barrier is that buyers do not yet know the product. In software, the free trial plays the same role.

Bonus packs

Extra quantity for the same price, such as 25% more in the same pack or a third month free. Bonus packs add value without cutting the headline price.

Rebates and cash back

The buyer pays full price and gets part of it back afterwards. Rebates protect the list price and give you customer data, but complicated claim processes frustrate buyers.

Loyalty rewards

Points, tiers or rewards for repeat purchases. They aim to keep existing customers buying rather than winning new ones.

Volume pricing

A lower unit price for buying more, such as a discount per seat above a certain number of users. See our guide to pricing strategies.

Contests, sweepstakes and games

Prizes for entering or taking part. They create attention and sign-ups, but the rules for prize promotions differ by country, so check local law before you launch one.

Point-of-sale displays

Displays at the place of purchase, from shelf signs to checkout stands, that prompt impulse buys. Online, the equivalent is a well-placed offer on the product or checkout page.

What are the main trade promotion tools?

• Trade allowances. Discounts or payments to retailers for buying in a period, featuring the product or giving it shelf space.
• Dealer loaders. Gifts or extras given to a reseller for placing an order of a certain size.
• Trade contests. Prizes for the dealers or sales teams that sell the most.
• Point-of-purchase materials. Displays and signage supplied to the reseller.
• Training programs. Teaching resellers' staff how to sell and support the product.
• Push money, or spiffs. Direct payments to a reseller's salespeople for each unit they sell.
• Trade discounts. Lower prices for channel partners in return for the functions they perform, such as stocking and selling.

Trade shows are also used to present new products to distributors and dealers, often combined with show-only order terms.

How do B2B and SaaS companies use sales promotion?

B2B buyers respond to incentives too, but the tools look different:

• Free trials and freemium plans play the role of samples.
• Annual billing discounts trade a lower price for commitment and cash up front.
• Launch or early-adopter pricing rewards the first customers of a new product or plan.
• End-of-quarter offers help close deals that are ready to sign. Use them sparingly, or buyers learn to wait.
• Upgrade promotions move existing customers to a higher plan. See our upselling techniques.
• Referral rewards pay customers or partners for introducing new customers. See how to create a partner program.
• Event offers at trade shows, webinars or conferences give attendees a reason to act during the event. See how event marketing can grow your audience.
• Channel incentives such as spiffs, extra margin or bonus tiers for resellers and agencies.

What rules apply to discounts and free offers?

Promotions are regulated in most markets, and the rules apply to online offers too.

United States. The FTC's guide on former price comparisons says a "was" price must be one at which the product was openly and actively offered, in good faith, for a reasonably substantial period. Raising a price for a few days and then "reducing" it is called a false claim. The FTC's guide on the word "free" says the conditions of a free offer must be stated clearly and conspicuously at the outset, and that the same product should not carry a "free" offer for more than six months in any 12-month period.

European Union. When a trader announces a price reduction, it must show the lowest price it charged for that item in the 30 days before the reduction. This is designed to stop inflated "anchor" prices.

The guides above are written for consumer offers. B2B deals are often negotiated, but honest reference prices and clear terms are still good practice.

How do you choose the right sales promotion?

1. Start with the goal. Trial, a larger first order, an upgrade, loyalty or channel push each call for a different tool.
2. Pick the audience. Consumer, trade partner or business buyer.
3. Protect your price. Prefer bonus packs, extended trials or added services over deep price cuts when you can.
4. Set clear limits. An end date, eligibility rules and a budget cap.
5. Track it. Use unique codes or links and compare results with a period without the promotion, so you can see the real lift.

For more, read our guides to FOMO marketing and cross-selling examples.