Promotion marketing 101: What you need to know plus 5 campaign ideas

Given the evolving global economic landscape impacting consumer behavior, promotion marketing might be the catalyst your business requires to fortify its position in the future. In this article, we'll cover:

Below is the promotion marketing definition:

The foundation of successful promotion marketing is the effective delivery of a valuable and relevant reward or incentive to the right customer at the right time.

Promotion Marketing uses methods like discounts, coupons, referral code, loyalty programs, and product bundling to achieve business goals.

An increasing number of businesses are turning to promotion marketing to achieve a variety of business goals. There are many different promotion mechanisms that, for a relatively small financial investment, can help businesses do the following:

The ultimate goal of all promotions, either directly or indirectly, is driving sales and increasing revenue. Simple promotions, like discounts and coupons, drive sales by offering customers a more enticing deal on a product or service.

Other promotion marketing mechanisms, like loyalty or referral programs, increase revenue in a more indirect way through metrics like customer loyalty or brand awareness.

Sourcing new customers is an integral part of referral programs in particular. Referral programs use cashback and other rewards to encourage existing customers, also known as advocates, to refer their friends.

Referral programs are proven to be one of the most effective mechanisms for sourcing new customers. This applies to both the cost and quality of new customers they bring in. Find out all you need to know about referral programs in our definitive referral program playbook.

Many promotion marketing mechanisms are also great for increasing brand loyalty. It should come as no surprise that loyalty programs are the most popular promotion mechanism for increasing customer loyalty. Loyalty programs offer customers rewards and other incentives depending on how often they shop or how much they spend.

But most other promotion mechanisms can help increase brand loyalty too. The more a brand offers its customers in the way of rewards and incentives, the more likely they are to continue shopping with that brand in the future.

Different types of loyalty programs and promotions help you generate granular data, i.e., data with a high level of detail and precision. The more granular your data is, the better you'll be able to identify and target the right customers.

A major benefit of granular data for businesses is the ability to leverage specific items, or item categories in their promotion campaigns. For example, the Peruvian online shopping platform Favo has increased its conversion rate by 38% and customer sign-ups by 21% due to its access to granular SKU filtering when running a promotion campaign.

Through a combination of all the business objectives mentioned above, promotion marketing can also help brands establish a presence in new markets. For example, a series of promotions specifically targeted toward customers in a new market can help a brand stand out from local competitors.

Marketing activities are often broken down into a framework known as the ‘4 Ps’ or the marketing mix. This concept allows you to classify all marketing-related activities into four distinct categories - Product, Price, Place, and Promotion.

Promotion marketing is an essential part of the marketing mix, and it has an important influence over many aspects of Product, Price, and Place.

It plays a role in everything, from how you merchandise your products, to positioning against competitors and even where you sell. Different promotion marketing mechanisms are used to target different segments of the 4 Ps.

For example, geofencing lets you choose precisely where you want certain products to be promoted. Meanwhile, product bundles act more specifically on your product offering and discounts allow you to directly alter your price positioning.

As an online business, improving customer engagement, driving ROI, winning new customers, and increasing revenue while maintaining low promotion costs is no easy task.

To achieve your promotion goals, you need a well-executed promotion marketing strategy to effectively incentivize customers. If you’re targeting all customers with your promotions, sending out thoughtless coupon campaigns, and blindly giving everyone 20% discounts, you are overspending on promotions and losing revenue.

Optimizing your digital marketing strategy with target promotions is a smart investment for any business looking to scale, reduce customer acquisition costs and increase revenue. The following statistics demonstrate the significant value of promotion marketing:

To get started, we recommend building your strategy with the following core promotions: coupons, discounts, referral rewards, loyalty programs, and product bundling.

Promotion Strategy: If a new customer has not made a purchase, send an email offer with 20% off their first order, valid only for the next 48 hours.

Why: In a survey of US internet users, 60% of email recipients were influenced by discounts and promotions. - eMarketer

Promotion Ideas: 8 amazing email promotions you actually open

Promotion Strategy: If a customer has not made a recent purchase, give them a coupon code for 10€ off their preferred item category.

Why: 34% of internet users look for online coupons on a weekly basis. - eMarketer

Promotion Ideas: 8 great coupon campaigns you need right now

Promotion Strategy: If a customer makes a successful referral by sharing a link on social media, give them a 10€ coupon when their friend makes the first purchase.

Why: Conversions increase 133% when mobile shoppers see a review that is positive before making an eCommerce purchasing decision. - Conversion Sciences

Promotion Ideas: Referral marketing: 4 easy ways to get more customers

Promotion Strategy: If a customer makes 5 purchases, offer them a special VIP discount for a partner service (e.g. restaurant gift card, shopping center voucher, movie tickets).

Why: 79% of both Millennials and Gen-Xers want a strong loyalty or discount program. -JWT Intelligence

Promotion Ideas: Talon.One’s definitive guide to customer loyalty

Promotion Strategy: If a user selects 2 or more products from category "X" with a cart total greater than 50€, give them a free product.

Why: 81% of emotionally connected consumers will not only promote the brand among their family and friends, but they will also spend more. -Capgemini

Promotion Ideas: Product bundling - How to get it right

If you want to see just how effective promotion marketing can be, simply look at some of our hand-picked star promotion campaigns from well-known brands.

Most of the brands you shop and interact with every day will have their own promotion marketing campaigns. These brands can give you ideas for your own promotions, and they also offer valuable insights into Best Practices.

McDonald’s Monopoly has become a worldwide phenomenon since it first launched over 30 years ago. The yearly promotional campaign reaches millions of paying McDonald’s customers with collectable game stickers on select meal items.

Credit: McDonald's

McDonald’s Monopoly makes use of a number of gamification mechanisms to turn the regular dining experience into an engaging promotional game for McDonald’s customers.

Customers can win a huge selection of prizes, from free McDonald’s menu items, all the way up to the top prize of $1 million. The promotion is so popular, it’s now run in 23 countries worldwide, acting as a blueprint for a wildly successful corporate promotion marketing campaign.

Uber is well known for its referral program which offers riders and drivers bonuses when they refer new users. Uber’s referral program has been hailed as one of the most successful and widely used referral programs of recent times.

It’s a simple idea, but Uber’s referral program, with its dual-sided bonuses, played a big part in the company’s rapid growth. At one point, it offered up to $30 to new and existing users for a successful referral. The driver referral program was even more generous, allowing drivers to earn up to $1,000 when they referred a friend.

The budget for Uber’s referral program is far out of most companies’ reach. But it’s proof that referral programs can be a huge driver for growing businesses.

KFC is one of America’s most iconic fast food brands. But thanks to some clever promotion marketing it’s also established itself as a cultural icon in Japan.

Credit: KFC

KFC received a cold reception when it first set foot in the Japanese market. Japanese consumers weren’t fans of American fried chicken at first. At least not until KFC started promoting it as a traditional dish that American families enjoyed at Christmas.

With the introduction of KFC’s special Christmas Pack and Party Barrel, Christmas sales skyrocketed. KFC is now the most popular fast food brand in Japan, feeding 3.6 million families each Christmas. It’s one of the best examples of what a bit of product positioning and cleverly packaged bundle deals can do for a brand.

There’s no specific set of tools or software requirements needed to run promotions. Some common promotion marketing mechanisms can be set up without any digital infrastructure whatsoever, i.e. in-store discounts.

But setting up digital promotions for your business requires significant investment if you decide to build your own solution in-house. To avoid additional costs and time constraints, many brands opt for a third-party promotion solution instead.

Talon.One’s Promotion Engine was built for this exact purpose. It provides a fully-customizable software platform that businesses can use to set up any promotion they’ll ever need. This includes referral programs, loyalty programs, geofenced promotions, coupons, discounts, and much more.

To launch these types of campaigns, your business should ensure it has a flexible and secure promotion infrastructure in place to power a variety of use cases.

With a Promotion Engine like Talon.One, you can create, manage and track all your discounts, coupons, referral campaigns, and loyalty programs in one holistic solution.

Once you have a Promotion Engine integrated, you can effectively scale your promotions to achieve your business goals. You can then monitor, analyze and adjust your campaigns in real-time to fit specific customer segments and market conditions.

Let’s quickly go over the promotion marketing basics we’ve covered in this blog post:

You’ve now covered the basics of promotion marketing and even got some campaign ideas. It’s time to start thinking about how you could tailor promotions to meet the specific needs of your business and its digital marketing strategy.