Welcome to Ask Nik, an advice column by me, Nik Sharma, on all-things entrepreneurship. I’ve spent the majority of my career focused on launching, scaling, and operating direct-to-consumer ecommerce brands like Hint, JuneShine, Caraway, Black Wolf Nation, Spritz Society, and Poo~Pourri. Today, I run Sharma Brands, a consulting firm and growth partner to some of the most admired startup brands as well as the largest CPG companies that we all know, love, and use daily.
Got a burning entrepreneurship question you’d like me to answer? Tweet or text me!
Everyone is typically ready to spend on Black Friday and Cyber Monday (BFCM) deals. I want to offer my customers great BFCM-worthy deals, but I also want to balance that with the fact that I generate a good percentage of my annual revenue during these holidays. What should I run for my BFCM (and other holiday season) offers? How can I ensure that I am not just running discounts that cut into my margins?
A Merchant Who Wants to Discount, But Still Make Money
It’s great that you put your customers at the forefront while keeping your balance sheet and growth trajectory in mind. I love your business savviness!
When it comes to your BFCM offers, keep in mind that your customers will remember your offers from prior years, so don't do anything for short-term revenue gain that might go against your intended brand perception. If your goal is to not be a heavily discounted brand, avoid steep discounts at predictable times of the year. If you offer 50% off site-wide in November, for example, the sales from your loyal customers will drop beginning October and they won't buy until that 50% off sale hits again.
The punchline is: be smart with how you package these promotions and discounts for your customers. It’s not about handing away free money. It’s important to have a strategy around moving inventory that you’re having a harder time selling or coupling other products that have lower sales velocity with those you know people will buy immediately.
On Thursday, Thanksgiving Day, I like to keep things low-key. To your active customer list, thank them for being a loyal customer in a way that feels authentic to your brand.
Right around post-Thanksgiving dinner time, which may vary based on your customer base, send a note to your most valuable customers (MVC) giving them early access to your Black Friday sale.
The MVC segment is typically your subscribers, loyalty/rewards members, ambassadors, general high life-time value (LTV) customers, or maybe even your first 1,000 customers. You can use tools like Postscript, Klaviyo, or Yotpo to make these emails feel personal with very little manual work on your end.
It's Black Friday—the Super Bowl for us marketers! People are ready to shop and spend money. If your sales start to slow down in November, remember it’s because customers are waiting until Black Friday to make sure they get the best deal possible.
My favorite offer for Black Friday is a high-discount combined with a high average order value (AOV) offer. For example, If you're selling a $20 product, try to build a bundle that sells for a total of $100 after a 30-40% discount. When you increase the AOV, you can afford to give a bigger discount on the product.
Be conscious of your shipping costs when building discount bundles. If you're selling candles, can you ship up to four candles for the same price as two candles? If so, make your offer revolve around four candles. Look for those efficiencies and double down on them.
I would also recommend using this offer on groups of customers that have previously become familiar with your brand, or Facebook Lookalike audiences (using 1-2% lookalikes) to drive new customers or retarget those who have engaged with you but haven't purchased. You'll be shocked how many people are ready to try your product when there's a discount attached. Make sure the creative very explicitly details the discount either in the visual creative, or in the copy.
Saturday and Sunday
The Saturday after Black Friday is also known as Small Business Saturday (coined by American Express). Sunday is still open... maybe someone will try to claim it?
On Saturday and Sunday I like to push different offers, if you have the resources to do it. You can test subscription-focused offers on Saturday/Sunday, or you can just put together new bundles where you include products that need a bit of love selling.
Last year at JUDY, which sells emergency supplies, we sold four main kits: The Safe, The Mover Max, The Starter, and The Safety. For our BFCM sale on Saturday, if you bought The Safe, you got The Safety for free. And on Sunday, if you bought The Mover Max, you got The Starter for free. Saturday was about a $45 discount to the customer, and Sunday was about a $60 discount.
These types of promotions can be great for testing new products or categories you launch, or if you're looking to stop selling certain products and want to reduce inventory. In the past, we successfully used this tactic with carbonated products that were getting close to their best-before date.
Cyber Monday/Cyber Week
Cyber Monday is no longer just one day—it lasts the whole week. At this point, everyone is also free from their family and Thanksgiving commitments, so there's more time to shop online. My favorite Cyber Monday promo runs for the full week, making it Cyber Week.
During this week, run a site-wide, tiered promotion for your customers. Blast your full CRM list, and tell them the more they spend, the more they save. Here's an example:
- Spend $50 & get free shipping
- Spend $100 & save 10%
- Spend $250 & save 25%
- Spend $400+ & save 35%
Tuesday is known as Giving Tuesday, so find a charity of your choice, or use an app like Change Commerce to donate a percent of your net profits. If you think this will make you less money, think again. Customers love to support brands when they know that a portion of it will go to a good cause. Additionally, psychologically, it lowers the barrier to purchase, knowing that the money is not only going to get them a product they will love, but also directly help a cause.
Be thorough with the sales you run for Black Friday through Cyber Week. Keep in mind that next year, your customers will remember what you ran this year, and for how long. Be concise with your messaging, but also explicit with what you’re offering in discounts and promotions. Lastly, don’t forget to lean on customers who’ve expressed intent in your brand previously and leverage your sale as an opportunity to drive trial.