“We’ve trained customers to wait for the discount, to look for the sale.” – Jill Avery, Harvard Business School professor, speaking with Harvard Business Review.
Key Takeaways
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- Start every promotion with a specific goal, such as increasing order size, attracting new customers, encouraging repeat visits, or moving slow inventory.
- A promotion does not have to mean taking 20% off everything. Bundles, purchase thresholds, loyalty perks, gifts, and special access can create value without deep discounts.
- Partnerships with complementary businesses can introduce both companies to new customers without requiring either business to slash its prices.
- Measure profit, average order value, repeat purchases, and customer behaviour—not simply how much revenue came in while the promotion was running.
Introduction
Putting something “on sale” is one of the simplest ways to promote a product or service. Lower the price, advertise the discount, and give customers a reason to buy now. The problem is that doing this too often can change the way customers shop. Instead of seeing a sale as an occasional opportunity, they may begin expecting one. Harvard Business Review has described how repeated retail discounting can effectively train customers to wait for lower prices, while more recent research suggests that bigger discounts do not necessarily create a stronger response.
That does not mean businesses should stop running sales. It means a sale should have a job. You may want customers to try something new, spend slightly more per visit, come back next month, bring a friend, clear out seasonal inventory, or discover your business for the first time. Each of those goals calls for a different kind of promotion.
The first question, then, is not “How much should we discount?” but “What do we want customers to do?”
Define the Problem Before Offering a Discount
Before creating the offer, decide what success would actually look like. Imagine a café that normally sells plenty of coffee but very few pastries.
A blanket 15% discount on the entire bill might increase traffic, but it also discounts the coffee people were already going to buy. A better promotion might be a coffee-and-pastry bundle.
Now imagine the opposite problem: plenty of customers visit, but few return. Discounting today’s purchase does not necessarily fix that. Offering a reward toward the next visit might.
Or perhaps a local shop is struggling to reach new customers. In that case, lowering prices for existing customers may be less useful than partnering with another local business whose customers are likely to be interested in the store. Once the problem is clear, choosing the promotion becomes much easier.
5 High-Impact Promotion Strategies
1. Use Product Bundles to Increase Order Value
Bundles are particularly useful when customers naturally buy several related products or services. Instead of discounting every item individually, combine complementary items into one offer. A garden centre might create a herb-growing bundle with three plants, soil, and a planter. A salon might package a haircut with a treatment. A bakery could sell a weekend breakfast box rather than discounting every pastry in the display.
Rather than offering 15% off everything in a skincare store, create a three-product “winter skin” set at a modest package price. The customer gets an easier purchasing decision, while the business encourages a multi-item transaction.
The value does not necessarily have to come from a dramatic price reduction. Convenience, curation, or a small bundle saving can make the overall offer more appealing. The important part is choosing products that make sense together. Throwing three unpopular items into a package and calling it a deal does not create much value for the customer.
2. Set Spending Thresholds to Protect Margins
Another option is to make the promotion conditional. “Spend $75 and receive free delivery,” for example, behaves very differently from “10% off all orders.”
A threshold gives customers an incentive to add something to their purchase rather than reducing the price of whatever they already intended to buy. The same principle can be applied to free gifts, bonus loyalty points, service add-ons, or tiered rewards.
The threshold should be based on your normal transaction size. If the average customer spends $45, a $50 threshold probably will not change much behaviour. A reasonable higher target (perhaps $60 or $65) may give customers a realistic reason to add another item. The objective is not simply to make the offer look generous. It is to determine whether the additional spending is worth the cost of the incentive. This is also why knowing your margins matters. Free shipping, free products, and discounts all have a real cost even when customers do not see that cost directly.
3. Reward Future Purchases to Drive Retention
A promotion can also be designed around retention. Instead of giving every customer money off today, give them a reason to come back.
A restaurant could provide a small reward that becomes valid the following month. A retailer could offer members early access to a seasonal collection. A service business might reward referrals. A café can still use something as simple as a traditional punch card.
Xero’s small-business loyalty program guide recommends keeping programs simple and selecting rewards that provide genuine customer value without unnecessarily damaging margins. It also suggests measuring factors such as repeat purchases rather than simply counting how many people enroll. This approach is particularly valuable for businesses where repeat customers matter more than one large transaction.
A promotion that produces $5,000 in sales this weekend but gives customers no reason to return may be less valuable than one that produces $4,000 now and brings a meaningful share of those customers back three weeks later.
4. Create Authentic Urgency with Limited-Time Offers
Urgency works best when there is a legitimate reason for it. A weekend promotion, end-of-season clearance, anniversary offer, launch event, or slow Tuesday special has a clear beginning and end. Customers can understand why the offer exists and why it will disappear.
That is different from a website where a “20% OFF! ENDS TONIGHT” banner appears every day. Constant urgency eventually stops feeling urgent.
Use limited promotions selectively and connect them to a business reason. A restaurant might promote a typically quiet evening. A retailer might clear seasonal products before new inventory arrives. A gym might run a new-member promotion in January.
5. Leverage Strategic Cross-Business Partnerships
Some of the most useful promotions do not need to involve a discount at all. Cross-promotions allow two businesses with complementary audiences to give one another exposure.
A florist and a bakery could create a Mother’s Day package. A bookstore could host an event with a nearby café. A yoga studio could partner with a local wellness business for a joint event. A wedding photographer and florist could create a planning guide together and introduce each business to the other’s audience.
The businesses should complement one another rather than compete directly, and there should be a genuine reason that the same customer would care about both. The U.S. Chamber of Commerce describes cross-promotion as a collaboration in which businesses promote one another’s products or services, giving each company exposure to an additional audience. Partnerships can take many forms. Two businesses might create a package together, trade newsletter features, host an event, offer reciprocal customer perks, run a giveaway, create educational content, or simply recommend one another. The important part is that both businesses contribute something and both audiences receive something worthwhile.
Don’t Ignore the Operational & Staffing Impact
A successful promotion can create a problem of its own: suddenly, you have more customers than usual. Before advertising the offer, consider what the promotion could do to staffing, inventory, customer service, order preparation, and checkout times.
A restaurant expecting a major Valentine’s Day promotion may need additional servers. A retailer running a weekend event may need more people at checkout. An ecommerce company might need additional coverage for fulfillment and customer support.
This is where workforce planning becomes part of marketing. Using an employee scheduling system such as TimeWellScheduled can help businesses schedule additional coverage around expected promotional traffic, communicate shifts with employees, and avoid discovering on the day of the sale that the promotion worked better than the staffing plan did.
Key Metrics: How to Measure Promotional ROI
High sales during a promotion are encouraging, but they do not automatically mean the promotion was successful. Suppose a store normally makes $10,000 on a weekend and makes $12,000 during a 25%-off promotion. Revenue increased, but the business also gave up a quarter of the selling price on hundreds of transactions. Was the promotion profitable? That depends on what else happened.
Did customers buy more items per transaction? Did the promotion clear inventory that needed to move? How many purchasers were new customers? Did they return? Did a partner promotion introduce the business to an audience it could not normally reach? What was the gross profit compared with an ordinary week?
Measure the result against the original purpose of the promotion. If the goal was larger transactions, look at average order value. If the goal was retention, look at repeat purchases. If the goal was customer acquisition, track how many new customers purchased and how many came back later. If the goal was inventory clearance, measure how much target inventory actually moved.
That final step turns promotions into something you can learn from rather than a cycle of guessing which percentage-off sign to put in the window next.
Conclusion: Turn Promotions into Long-Term Growth
Sales can be useful without becoming the entire marketing strategy. The strongest promotions give customers a reason to act while also helping the business accomplish something specific. Sometimes that means a discount. Other times, the better answer is a bundle, a spending threshold, a return incentive, a loyalty reward, or a partnership with another business.
Before launching the next promotion, start with one question: What customer behaviour are we trying to encourage?
Once you know the answer, you can build an offer around it, protect your margins, prepare your staff, and measure whether it actually worked. That turns a sale from a temporary price cut into a business strategy.
