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August 18, 2010 / Tony Arena

How to Keep Your Customers With Simple Promotions

Promotions have been used offline for years as a marketing tactic and increasingly you are now seeing them appear as online tactics.

Two reasons to use promotions online or offline are:

Retain existing customers by providing additional value to their purchase

Expand on existing customers by providing an incentive to purchase more of your product or service (up sell) or purchase a different product or service in your range (cross sell)

There are many types of promotions you can implement, so here are a few of the common ones:

Price Discounts

A common type of promotion is discounting the price of your product or service for a limited period of time.

If you discount your price, you need to determine how much additional volume needs to be sold to cover the loss in revenue as a result of the discount.

Multiple Purchase Discounts

Another way of encouraging customers to buy more is to offer a discount if a customer purchases a certain quantity of your product. For example, buy 3 bottles of soft drink for $4.00 and save 80 cents. Multiple purchase discounts not only offer a saving for the customer and additional sales for your business, they assist in blocking out the competition for a period of time.


Sweepstakes or games of chance enable a customer to enter a competition where they go into the draw to win a specific prize determined by your business. Find out what your target market likes what their interests and behaviour are and then decide on your prize.


A contest is a game of skill rather than a game of chance and it is at the discretion of your business to decide who wins eg. colouring contest or “in 25 words or less..”.

Government laws are different for contests as opposed to sweepstake promotions so make sure you check the regulations.

Value Adds

A value add is when you provide a reward to your customers for purchasing your products or services. Value adds are often used to increase the average transaction value of a customer i.e. encourage them to buy more to receive the reward.


A premium is a product you give away to your customers that includes your business logo or marketing message eg. mouse pads, caps, t-shirts, calendars etc. Premiums can increase awareness of your brand or business or act as a reminder for existing customers.


Coupons can be used to communicate your promotional offer to your target market. More importantly, coupons provide a simple way to track the success of your promotion.

When developing a promotion that involves a coupon, you need to consider the following:

Who should receive the coupon, how will the coupon be distributed, what do you want the coupon to do and what does the coupon need to communicate eg. conditions.

Cross Sell and Up Sell

The objective of a cross sell promotion is to increase the average transaction value of your customer by encouraging them to purchase more than one product or service in your range.

Up sell promotions encourage customers to purchase more of the same product or service.

Bonus Packs and Multipacks

Bonus packs offer more of your product for the same price as the original size. For example, receive 500mls of shampoo for 375ml price.

Multipacks are the grouping of like products together to encourage customers to buy more. They are sometimes offered at a discounted price as opposed to buying each product individually.

What do you think of using promotions in your business?

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