← Sales: Order to Cash

Lesson 7 of 18·4 min

Promotions: encouraging the right buying behaviour

A promotion is a repeatable commercial rule intended to influence buying behavior. Buy X Get Y encourages a qualifying quantity, a bundle encourages a combination of products, and a volume tier rewards a larger purchase. These have different costs and should not be treated as interchangeable discounts.

The DNA promotion editor in the supplied source offers Buy X Get Y, Bundle Deal and Volume Discount. It includes validity, priority and active status. Buy X Get Y can target items or detail-level categories, define the qualifying and benefit quantities, limit redemptions and control stacking or exclusion when coupons apply. Volume tiers include minimum and optional maximum quantity, discount percentage or fixed price, and a calculation type.

Choosing an incentive that fits the objective

The first decision is the behaviour the business wants to encourage. A supplier may want customers to buy a complete solution, increase the quantity of a recurring purchase, or try a related product. Those objectives call for different incentives.

A bundle is useful when products naturally belong together. A volume tier can encourage a larger purchase of eligible goods. Buy X Get Y can reward a qualifying purchase with additional goods. Using the wrong mechanism may create demand for low-value extras without improving the main commercial outcome.

The cost of the benefit

Buy 2 Get 1 Free at a normal unit price of 90 gives three units for 180. The effective reduction across all three units is one-third, not one-half. A bundle may suit a pump plus a required accessory; a volume tier may suit cartons purchased in bulk. Check the cost of the free or discounted items before choosing the offer.

The cost of a free item is still real. The business needs to consider the full supply, including the benefit quantity, when evaluating margin and stock requirements. A promotion that looks affordable in percentage terms can create a shortage if the extra units were not considered in planning.

Thresholds and calculation methods

A tier boundary determines when the customer becomes eligible for a different benefit. The minimum, maximum, and calculation method need to form a coherent rule. Overlapping tiers can make the intended commercial result unclear.

DNA's Apply to All Units calculation means the reached tier applies across the eligible quantity. That differs from a marginal arrangement in which only units above the threshold receive the new rate. The customer and salesperson need to understand the actual configured method rather than assume both approaches produce the same total.

Priority also matters when several offers could qualify. The promotion engine processes lower priority numbers first. Stacking and coupon-exclusion settings affect whether benefits combine. These controls help translate a commercial policy into a repeatable result.

Evaluating success

A useful promotion produces an intentional outcome with an acceptable cost. Higher quantity alone is not sufficient if the final margin deteriorates or the customer simply brings forward purchases they would have made later.

The relevant review considers eligible sales, effective concession, product cost, and the effect on purchasing behaviour. DNA provides the rule structure; the business needs a clear reason for the offer and a way to judge whether it achieved that reason.

Check your understanding

Not marked. Answer every question to finish the lesson.

Question 1 · Choose one answerConsider this statement about promotions: Any purchase automatically qualifies for every active promotion. Is the statement correct?

Question 2 · Choose one answerCheck your understanding of promotions: Which statement is accurate?

Question 3 · Choose every answer that appliesCheck your understanding of promotions: Select all correct statements. Exactly two answers are correct.