Many small businesses might be apprehensive about offering goods or services at a discounted rate for fear of negative financial impact. When done correctly, however, running a promotion can be a great way to boost sales, drive new business, move inventory, or reward loyal customers. The key is to find the right time and the right kind of promotion. 

What Is Your Goal With the Promotion?

First, you will need to decide the purpose of your promotion. Different goals warrant different kinds of discounts and offers. If your goal is:

To Reward Loyal Customers and Move Inventory:

Give Early Access Codes

Give your followers and email subscribers a chance at new discounts before anyone else by giving them an early access coupon code. 

Have a Flash Sale

Notices of short-term flash sale events reward your email subscribers and give them the chance to take advantage of a sale that is only happening for a limited amount of time. Keep your flash sales quite short (no more than 24 hours). 

To Attract New Customers and Move Inventory:

Consider a Tripwire Offer

A tripwire is a product that has real value that is offered at a significantly lower price or even free to help remove doubt from customers who are on the fence about buying from you. The purpose of offering a tripwire product or service is to convert potential customers into actual customers that keep coming back. 

The key to a successful tripwire offer is ensuring it has actual monetary value and that it is relevant to your business’s core offer. For example, a clinic who’s core offer is anti-aging therapies might offer a free consultation or a discount on Botox. 

Offer a Lifestyle Discount

If it is appropriate for your business, you may want to extend discounts to certain professions, such as teachers or veterans. Back-to-school deals exclusively for teachers, for example, help define your brand’s values in new customers’ eyes while potentially widening your target audience.  

To Attract New Customers, Reward Old Customers, and Move Inventory:

Hold an Extended Sale or Holiday Sale

The key here is whether to offer a percentage discount or a dollar amount discount. From a consumer psychology standpoint, that choice will depend on the cost of the product that is on sale. 

The Rule of 100 suggests that anything costing $100 or more be discounted using a dollar amount as opposed to a percentage. For example, “get $20 off for every $100 you spend.” If the product or service costs less than $100, you should offer a percentage discount. (Get 10% off your purchase of $50 or more). 

Offer a Buy One, Get One Deal

Consumer psychology plays an important role in this kind of offer as well. When given the choice between buying one item that is discounted at 50% or buying one item at full price and getting a second one free of charge, customers will almost always choose the latter. Even though it is effectively the same discount, the word “free” is universally appealing. 

Whatever your goals for your promotion, it can be a great way to grow your business and customer base. Keep it relevant, sincere, useful, and straight-forward. Experiment with what works best for you, or consult with a marketing strategist to design your next campaign.