By Ed Fry, Head of Growth, Paddle
Black Friday and Cyber Monday are set to be huge. Even if you aren’t planning to do any promotion, you’re likely to see revenue increase by 20%. But why stop there? After all, Black Friday sales can see you increase revenue even up to 120%.
It’s not limited to the weekend any longer, either. Data from the same period last year indicates that, by Wednesday before Black Friday, sellers were already launching their deals and sales were up almost 25%, and 50% up on Thursday.
We’ve also seen Cyber Monday grow into as big a sales day as Black Friday – with sellers typically doubling their average daily sales or more.
To help, we’ve shared key tips on how to get the most from this festive sales period.
Not all discounts are equal
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Offering a discount is a bit of a no-brainer but understanding what type of discount to offer can be tricky. It is important to weigh your options when deciding your discount strategy, as not all promotions carry the same weight.
There are typically three discounting strategies that you can either use in isolation or in a combination:
- Total coverage: Apply the same discounts across your product range
- ‘Best sellers’ discount: Put only your best selling products on promotion
- ‘The ignored’ discount: Offer higher discounts on older or less popular products
Big cuts work well for very low or very high priced digital goods
How much you discount requires careful consideration. Our data from the same period last year found discounts between 30-40% were the most attractive to users, and therefore delivered the best returns.
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If you’re looking to heavily discount, bear in mind that this tends to work for very low or very high priced products (less than £10 or higher than £50).
This is because it comes down to how the discount is perceived by the user – a small discount on a low priced item feels less of a saving. For example, a user saving £20 on a £100 item will feel like they’re getting a generous discount, compared to a purchase that sees a saving of £2 on a £10 item. This is in spite of both deals offering the equivalent of a 20% discount.
So, before you discount, do your homework. Look at what your competitors offered last year; what is considered common within your industry (essentially, what have relevant audiences grown to expect during this season); which of your initiatives over the previous years brought the highest ROI etc.
Make existing customers feel as loved as the new ones
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Black Friday isn’t just an opportunity to pick up new customers, it’s also a time to up-sell or cross-sell to your existing customer base. Tailor offers using customer insights and promote relevant offers to each of them in order to up their spending with you or to purchase additional products.
To make these offers more appealing, consider;
- Offering them an exclusive sneak peek and discount on the products that will be on sale before you open this up to the rest of your audience
- Offering them a lower discount than the main Black Friday one but apply this across multiple products (e.g instead of 30% off your main product, give a 20% off all/some products)
A coupon is as good as a discounted price
Coupons are great alternatives to discounted prices of individual products, especially if you are planning a last minute Black Friday campaign.
It is far simpler to issue and distribute coupons plus it is a good reason to contact past, present and new customers. Plus tracking their performance is typically much easier with coupons.
Cut through Black Friday noise
There are many good tactics to getting your promotion to more potential customers – making sure they are unique to this time of year is one of them. For example, look to bundle key products on promotion with a ‘little something extra’ (perhaps some branded swag or a low cost item you know customers love) and promote it as a Black Friday special.
This makes the customer feel special and suggests you are going above and beyond during this seasonal week, while maintaining that the main driver of sales is the discount on your main product.
Black Friday is a huge opportunity and everyone wants a slice of the pie. These tips we’ve talked about aim to help increase customers’ likelihood to buy; but having a deep understanding of t your market, your competitors, and your ideal customer profiles will make a massive difference to how potential buyers will respond to your Black Friday / Cyber Monday campaign.
Good luck and happy discounting!
Stats sourced from Paddle data from thousands of software sellers during 2018’s Black Friday/Cyber Monday period – source.