Methods of Sales Promotion

Sales promotion for companies is all about the ways the company markets the product or service it is touting in order to make money. It's often tied to new product launches, explains Inc. magazine. Marketing also involves some testing on the part of the business to determine which combination of these various methods of sales promotion work best for its products or services, and allows the company to sell the most.

Identify Your Target Customer

To create a sales promotion, you must first understand to whom you are trying to sell the product or service, according to Lumen Learning. You can then choose a methodology that appeals to that customer. Create a scenario that describes who the customer is, how they think and feel, what they like to do, what their household income is and how the product or service benefits them or fills a need they have. Drill down in your demographics. For example, don't just target women. Is your target customer a single woman or women with children or affluent women ages 35-55?

Review Your Product Life Cycle

A product's life cycle is composed of four main stages: introductory, growth, maturity and decline. Sales promotion efforts are different in each stage because the needs of the audience are different in each stage. Determining where your product falls in the product life cycle reveals how you should be marketing your product.

Generally, products in the introductory stage require sales promotions to bring awareness to customers; growth products offer sales promotions that differentiate it from its competition; maturity requires more of a reminder type sales promotion using coupons and special sales; and the decline stage is typically where cost cutting measures occur to cut down on sales promotions.

Choose a Sales Promotion

Start off by choosing one method to test as a sales promotion. You may start by offering coupons to customers. Coupons can work for almost any stage of the product life cycle and coupons can be distributed in a variety of ways.

You can distribute coupons online via email, in stores where the product is sold, on your business website, in direct mail – your own direct mail campaign or in coupon supplier mailers such as Value Pak and Red Plum.

Track the Response Rate

When you implement the sales promotion, track the response rate of the method. For example, coupons may include a coupon code that customers have to input in online orders or provide during a phone order to claim the savings.

If the sales promotion is successful – generates a profit – then you can mimic the sales promotion in future campaigns. If not, you can modify the existing sales method or add a new method to the mix.

Try a New Sales Promotion

Try out a new sales promotion, such as giving away free samples for customers to try. You may combine giving away free samples with a coupon so after a customer tries the product, likes it and decides to buy it, the user also has the added incentive of saving money to buy the product.

Repeat These Steps

Continue to add and subtract sales promotions until you find the marketing mix that works best for your business. You might try testing certain promotions by limiting them to a certain geographic region or a handful of stores or sending a limited number of email offers before you roll out nationally to everyone.

Almost an unlimited number of sales promotion possibilities exist. Some of the other sales promotions you can use include demonstrations; customer loyalty or frequent buyer programs; signs or display racks in the stores where the product can be bought; rebates; bonus gifts; and contests.