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Promotion Marketing: Everything You Need to Know

Julia Krzak
Julia Krzak
September 3, 2020
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Promotion Marketing: Everything You Need to Know

There is no marketing without promotion. After all, it is one of the four P’s of marketing – price, product, promotion, and place. In a nutshell, promotion marketing helps communicate the value of a product or service to the audience. What for? Well, to increase brand awareness, peak interest, and generate sales, just for starters. But, let us start from the beginning.

What is promotion marketing?

Promotion Marketing is a company communication with potential consumers in order to inform about the company activities, its current and future offer, shape a positive brand image, build positive relationships, and stimulate demand, in accordance with the business strategy.

The easiest way to understand promotion marketing is to imagine it as a conversation between a seller and a buyer – the seller tries to convince the buyer to purchase a product or a service through the use of promotions. What these promotions might be? Usually, promotions denote incentives, special offers, and rewards. In Voucherify, we understand promotion marketing as the use of six promotion tools – coupons, cart discounts, referral and loyalty programs, gift cards, and giveaways. 

However, in marketing, we can differentiate more than six promotion types:

  • Personal selling
  • Advertising
  • Direct marketing 
  • PR and Publicity
  • Lobbying
  • Merchandising
  • Sales promotions 

There are also two different promotional methods that you can use – price promotions and non-price promotions. Price promotions, unsurprisingly, focus on lowering prices in the hope of increasing sales. You can think here of discount vouchers or BOGO promotions. 

On the other hand, non-price promotions focus on the additional value created by promotion, not the product price itself. Examples of non-price promotions include sampling, contests, or free gifts. Depending on your line of business, different promotions will resonate better with your audience. However, the consensus is that non-price promotions tend to be more effective and creative. From the business point of view, they are also cheaper – the results you can achieve are much higher than the promotional costs incurred.

Step-by-step guide to promotion marketing

Imagine that you are a shop owner who wants to up his/her marketing game a little. What do you do? Well, this guide is a good starting point for becoming a promotion marketing pro. 

Define the product

The first thing is to identify the product of the promotion. Taking into account the costs and margins, you should choose products which potential revenues will cover promotion expenses. In addition, it is important to identify similar products to the one you’d like to promote. Promoting a product which substitute has a high margin may lead to the so-called cannibalism, which results in a lower margin than pre-promotion. Also, keep in mind that not all promotions need to be product-based. If that’s true for you, skip this step altogether. 

Understand the needs of your audience

When choosing a product for promotion, you should also define the target group of your campaign. It is helpful in communicating with consumers because by knowing their preferences and inclinations, you will be able to adjust the offer better. A promotion addressed to a specific group of people often brings greater profits than if it was addressed to everyone. 

Set the goals

You can use promotions to achieve multiple marketing and sales goals. Here are some of them:

  • Increase in off-season sales. 
  • Stimulation of product demand. 
  • Increase in customer loyalty and brand awareness.
  • Smooth introduction of a new product. 
  • Creation of competitive advantage. 
  • Better information flows about new products and services. 

By defining a goal(s), you can effectively choose an action tool.

It is worth mentioning at this point that most experts on the subject emphasize that promotions generally do not build brand loyalty, because they mainly attract price-driven customers. A loyal buyer of a given brand does not change preferences in a response to competitors’ promotional offers. From this point of view, promotional actions will bring an increase in sales in the short term, but will not result in a constant increase in market share.

Choose the right channels

Communication with consumers depends on who you want to reach, the nature of the target group, and the product promoted. Additionally, the scope and intensity of the campaign (i.e. the frequency of broadcasting, the number of viewers, listeners, etc.) must be taken into account, as well as its impact on a specific recipient. After all, there is no point in promoting women’s shoes in an exclusive men's magazine or a luxury car in a youth magazine.

Set the budget

At some point, you need to start talking about money. Analyze how much money you can spend on promotion. Take into account your current marketing budget, predicted ROI, taxes, vital expenses, and product development. Try to find ready promotional solutions that can minimize development and maintenance costs. Remember that the budget should be adjusted to the size of the market, product specificity, competitors' activities, and the target group.

10+ promotion ideas with real-life examples

There are so many brands competing for a limited amount of dollars. Conclusions? You need to stand out from the crowd of the same offers. How? Promotion marketing can be the answer you’ve been looking for. 

We’ve collected more than 10 examples of promotions used by both small businesses and huge enterprises. Let's get inspired!

Free shipping

Free shipping is one of the most popular (and profitable) promotional tactics for online retailers. By offering free shipping, you might get your customers to pay more than both of you expect. Keep in mind to use free shipping in conjunction with a minimum purchase requirement to increase your average order value. Also, go hard or go home – make customers hear about your free shipping campaign by including it in your direct communication channels. 

H&M free shipping campaign
H&M free shipping campaign

Discount for new customers

Coupons are a terrific way to increase your conversion rates and make your offer stand out among competitors. For instance, you may offer an amount or percentage discount on the next purchase and deliver it to newly-registered customers via email. 

Conqueror Envelopes new customers campaign
Conqueror Envelopes new customers promotion

Incentive for cart abandoners

Abandoned carts are one of the biggest challenges of online sales. This is confirmed by statistics – according to research by the Baymard Institute, as much as 69% of online shoppers end up abandoning the basket. Discounts have become the perfect way to nudge the customers along the sales funnel.

Levi's unfinished shopping promotion
Levi's unfinished shopping promotion

Double-sided referral program

Double-sided referral programs give you an upper hand against the competition who still sticks to traditional forms of referral marketing. With referrals, you get to take advantage of the immense power of recommendations and word-of-mouth. It may seem that providing incentives for both parties is a financial mistake, however it’s all about finding balance – it doesn’t take much more resources to cut a little discount for the referrers or the referees.

Revolut double-sided referral program
Revolut double-sided referral program

BOGO promotion

A free product can be a great way to provide additional value to customers. If used strategically, it can also increase average order size and help you get rid of products that do not sell well on their own. Remember to create product bundles that make sense to customers – mix complementary products to increase the attractiveness of the offer.

Pizza Hut Bogo promotion
Pizza Hut Bogo promotion

Happy Hour campaign

To keep the revenue flowing and to protect your margins against sudden drops in quiet periods, you can try offering a percentage or amount discounts for selected products or services. By launching a Happy Hour campaign, you get to turn off-peak hours into assets. Remember to keep the offer time-sensitive and urgent. 

Starbucks happy hour campaign
Starbucks happy hour campaign

Flash sale

Flash sales are dynamic promotions with a short time window. The short timeframe helps to convince customers to make a purchase and drive more traffic to your store. Marketing experts are in consensus that promotions are much more attractive when limited in time. 

Loft flash sale
Loft flash sale

Customer service discount

You can trigger automatic percentage discounts for all customers who raised a support ticket. This way, you instantaneously remedy any ill-feelings or indignation on the customer side and increase the chances that the ticket will be resolved successfully and amicably. You can also use sorry discounts if your brand was faced with bigger technical challenges that affected a big chunk of shoppers. 

Cotton On sorry discount promotion
Cotton On sorry discount promotion

Re-engagement (win-back)campaign

Sometimes you may need to incentivize dormant customers, and there is no better way to do it than with a fun coupon campaign. If your customer didn’t use your app or haven't made an order in quite some time, send them a discount for a new product line to give them an extra push. You can also use this kind of promotion with shoppers you haven't converted yet.

Nordstrom Rack win-back campaign
Nordstrom Rack win-back campaign

Loyalty program

All great loyalty programs consider the individual customers’ needs, interests, and preferences to win customers’ hearts, trust, and, ultimately, wallets. Try to follow an original formula for a loyalty program with multiple tiers, product-based and non-monetary rewards, individual customer dashboard and optionally a mobile app. 

Sephora loyalty program
Sephora loyalty program

Seasonal promotion

A seasonal promotion is any type of promotional activity (e.g., special offers, discounts, limited edition items) inspired by holidays, celebrations, and seasons. To take advantage of specific occasions, you may launch a special gift card or discount campaign. Seasonal promotions tend to be very effective as customers have come to expect special deals during holidays and celebrations. 

Jack Threads Halloween promotion
Jack Threads Halloween campaign

Gated promotions

To increase the personalization of your offers, you can target promotions at members of a particular group based on occupation, affiliation, and more. For instance, you can target your promotion marketing campaigns at college students or veterans. All interested customers need to undergo a verification process to gain access to the offer, giving your promotion an aura of exclusivity.

The Body Shop student-only discount
The Body Shop student-only discount

Trends in promotion marketing

The latest digital marketing trends open an amazing opportunity to improve your promotion marketing even further. The key promotion trends that are on each marketer’s mouth right now is personalization and targeting. One-size-fits-all offers don't appeal to modern customers who most often are digital natives who skilfully move around digital environments. Another trend, closely connected to personalization, is location marketing. Customers’ geolocation is a fantastic fabric for weaving promotions – it’s relevant, attractive and hits home (quite literally).  

The two remaining trends worth considering is the use of social media as a promotion channel and allowing for mobile experiences. Both mediums are growing at a neck-breaking pace. Customers are already using social media and mobile devices to perform any action imaginable – don’t ask them to switch the medium for you, instead, meet them there instead. 


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