How do you promote sales? Practical tactics that work

Published Monday 30 March 2026

Table of contents

• What is a sales promotion?
• Strategies to increase sales
• Promotional tactics to boost sales
• Increasing sales to existing customers
• Finding new customers
• How to measure your sales promotion success
• Do the numbers on sales-boosting strategies
• Use Xero to track and grow your sales
• FAQs on increasing sales

Key takeaways

• Prioritise existing customers over new customer acquisition since retaining current customers costs five to 25 times less than finding new ones and can boost profits by 25% to 95% with just a 5% increase in retention rates.
• Remove barriers to buying by streamlining your purchasing process, offering multiple payment options, providing prompt customer service responses, and implementing customer-friendly billing like flat fees or instalment payments.
• Use cross-selling and bundling strategies to increase average order value by promoting related products alongside current purchases, which can increase sales and profits by 20% and 30% respectively.
• Track promotion performance by setting clear goals beforehand, monitoring customer acquisition costs and conversion rates, calculating return on investment, and using analytics tools to measure which tactics deliver the best results for your business.

What is a sales promotion?

A sales promotion is a short-term tactic designed to boost sales quickly. Unlike long-term marketing strategies, promotions create urgency and give customers an immediate reason to buy.

Common goals for sales promotions include:

• Attracting new customers with a compelling offer
• Encouraging existing customers to buy more or buy sooner
• Clearing excess inventory
• Launching a new product or service

Sales promotions work best when they're part of a broader strategy. A well-planned promotion drives revenue without damaging your margins or brand perception.

Strategies to increase sales

Increasing sales comes down to two paths: selling more to existing customers or attracting new ones.

Start with existing customers. It's often more affordable than finding new ones. In fact, acquiring a new customer is five to 25 times more expensive than retaining an existing one, and it makes strategic sense. Once you're good at maximising sales to current customers, each new customer you bring in is automatically worth more.

The money you spend on customer acquisition delivers a bigger payback when your existing customer value is already optimised.

Promotional tactics to boost sales

Promotions can take many forms. The right approach depends on your business type, margins, and goals.

Here are common promotional tactics that work for small businesses:

• Discounts and special offers: Reduce prices temporarily to drive volume
• Buy-one-get-one (BOGO) deals: Encourage larger purchases while moving inventory
• Free shipping: Remove a common barrier to online purchases
• Free samples or trials: Let customers experience your product before committing, which is especially effective for existing customers who are 50% more likely to try new products
• Limited-time promotions: Create urgency with deadlines or countdown offers
• Bundle pricing: Combine products at a lower total price to increase order value
• Loyalty-based discounts: Reward repeat customers with exclusive pricing

Choose tactics that align with your profit margins. A promotion that drives sales but erodes profitability isn't a win.

Increasing sales to existing customers

Barriers to buying are anything that stops a customer from completing a purchase. To increase sales, identify and remove these obstacles. For certain types of businesses, it also makes sense to build a deeper relationship with customers.

Reduce barriers to buying

Think about the purchasing process from your customers' point of view. What might stop them from buying? What might entice them to complete the purchase?

Make ordering easier

Streamline your purchasing process so you don't leave opportunities on the table. Review these common friction points:

• Phone responsiveness: Answer calls promptly and return messages quickly
• Quote turnaround: Send quotes in a timely manner
• Ordering options: Offer online ordering or standing orders for recurring needs
• Checkout experience: Provide multiple payment options to help complete the sale

Make billing friendlier

Customer-friendly billing encourages repeat business. Consider these approaches:

• Flat fees: Charge the same amount each month even when service levels vary. Customers who prefer cost certainty find this attractive.
• Instalment payments: Let customers pay for big-ticket items over time to help their cash flow.

You may need software or third-party services to offer this flexibility, but flexible billing can help increase sales.

Use strategic promotions with existing customers

Target promotions to your existing customer base to encourage repeat purchases without eroding margins. Here are two promotion types that protect your margins:

• Bundling promotions: Offer deals like "buy this and get that for half price." The discount only applies to part of the bundle, so you attract higher customer spend while reducing margin loss.
• Loyalty-based discounts: Reward repeat customers with special pricing. The benefit of ongoing sales outweighs the cost of the discounts.

Cross-selling

Cross-selling is promoting a related product or service alongside what your customer is already buying. It's an effective way to increase sales per customer, with one McKinsey study seeing a significant increase in sales and profits of 20% and 30%, respectively.

Try these cross-selling tactics to increase your average order value:

• Colocate related items on a shelf, in a display, or on screen for ecommerce
• Build product recommendations into your sales scripts
• Offer bundle discounts on additional items, though this isn't always necessary

Cross-selling differs from upselling, where you promote an upgraded or higher-end version of what the customer is already buying.

Learn about upselling in the guide Upselling techniques to increase revenue.

Expanding your range for existing customers

Expanding your range means adding new products or services to increase what you can sell to each customer.

Start by doing research to identify opportunities:

• Ask your customers what else they need from you
• Ask similar businesses what they're selling that you're not
• Ask your suppliers to suggest products that complement yours

Consider adding goods or services to complement your existing offerings:

• Sell related services if you're a goods business, such as installation, training, or maintenance
• Sell related products if you're a service business, such as haircare products for a hairdresser or analytics tools for a web services provider

You can also repackage your existing offer to reach new audiences:

• Reframe or rename a product for different customer segments
• Pitch to new markets, such as a chocolate maker supplying restaurants and caterers

Get more tips in the guide Launching new products.

Relationship marketing

Relationship marketing focuses on building long-lasting customer connections rather than one-and-done sales. It encourages repeat business by keeping customers engaged over time, which is key because the likelihood of selling to an existing customer is 60–70%, versus just 5–20% for a new prospect.

Common relationship marketing tactics include the following approaches:

• Creating mailing lists or social media groups for regular communication
• Circulating newsletters with news, tips, and business announcements
• Running loyalty clubs that offer advance access to new products, discounts, or giveaways
• Hosting events such as information evenings, product launches, or exhibitions

Finding new customers

Finding new customers expands your revenue beyond your current base. Once you've maximised sales to existing customers, these strategies help you reach new markets.

Expand your presence (physical or online)

Expanding your presence exposes your brand to new customers in new places. You can expand physically, online, or both.

Physical expansion

Opening new locations extends your reach, but it can be costly. Consider modest beginnings:

• Share a workshop or office space
• Open a pop-up shop
• Partner with a complementary business

Online expansion

Expanding online is often less costly and removes geographic limits:

• Open an online store if you're a retailer
• Set up to serve clients remotely if you provide professional services

Take time to learn how your products or services are typically sold online.

Broaden your marketing

Broadening your marketing means changing when, where, and how you speak to potential customers. Here are three approaches to try.

Experiment with digital marketing

Test social media and search marketing. You can try low-cost strategies and see what works before investing more.

Tap into word-of-mouth marketing

Word of mouth is one of the most effective and affordable forms of marketing. People prefer to buy what's been recommended to them, with research showing that 50% of customers report making an impulse purchase at a store after receiving a recommendation.

• Ask satisfied customers to spread the word about your business
• Tell B2B clients you're looking to work with more people like them
• Build referral requests into your regular conversations
• Consider offering referral incentives, but try the free approach first

Test new audiences

If you've been marketing to the same group, pivot slightly to include a different demographic. For example:

• A web services supplier to small businesses could target sports clubs and charities
• A commercial kitchen supplies business could open their offering to households

Expand your range to attract new customers

Expanding your range can make your business relevant to a wider group of customers, not just your existing ones.

When adding new products or services to attract new customers, keep these principles in mind:

• Identify what you're already good at and where you could add value
• Keep new offerings within your existing field of expertise
• Calculate the true cost of expansion before committing
• Pilot new offerings before making permanent changes to your range

How to measure your sales promotion success

Tracking results helps you understand what's working and where to invest your effort. Without measurement, you're guessing.

Follow these steps to measure promotion performance:

1. Set clear goals before you start: Define what success looks like, whether that's revenue, new customers, or units sold
2. Track customer acquisition costs: Calculate how much you spent to gain each new customer
3. Monitor conversion rates: Measure how many people who saw your promotion actually bought
4. Calculate return on investment (ROI): Compare the revenue generated against the cost of running the promotion
5. Compare performance across promotions: Identify which tactics deliver the best results for your business
6. Use analytics tools: Track results in your accounting software to see the financial impact clearly

Regular measurement lets you refine your approach and invest in what actually works.

Do the numbers on sales-boosting strategies

Every sales strategy has costs. Before committing to new tactics, work out how to pay for that extra activity.

Track these expense categories to understand your true costs:

• Capital expenses: New tools, equipment, physical locations, or websites needed to execute your strategy
• Operating expenses: Increased inventory, freight, marketing spend, or sales commissions

Protect your margins. Increasing sales only helps if you can still make money on those sales. Changes to costs or pricing will affect your margin. If your margin is set to shrink through discounting, make sure the increase in sales volume delivers an overall increase in profits.

Use Xero to track and grow your sales

Managing promotions and tracking their financial impact is easier with the right tools. Xero helps small businesses:

• Track promotional spending against revenue growth
• Monitor margins in real time
• See which tactics deliver the best return
• Keep financial management simple while you focus on sales

Ready to track your sales growth with confidence? Get one month free and see how Xero simplifies financial management for small businesses.

FAQs on increasing sales

Here are answers to common questions about growing sales and running effective promotions.

How much should I budget for sales promotions?

A common guideline is to spend around 5% to 10% of your expected revenue from the promotion. Start small, measure your results, and adjust your budget based on what delivers the best return.

How can I run promotions without hurting my profit margins?

Use tactics like bundling or loyalty discounts that protect margins while still offering value. Always calculate your break-even point before launching a promotion to understand the sales volume needed to stay profitable.

What's the difference between a sales promotion and a sales strategy?

A sales promotion is a short-term tactic to boost sales quickly. A sales strategy is your overall plan for growing revenue over time, which may include promotions as one component.

When is the best time to run a promotion?

You can run promotions during seasonal peaks, slow periods you want to boost, or when launching new products. The best timing depends on your industry and your customers' buying patterns.

How do I know if my promotions are working?

Track key metrics like revenue generated, customer acquisition cost, and return on investment (ROI). Compare the results against your goals and previous promotions to see what's delivering value.