It’s the question every year about this time. Most business owners decide well in advance or in a panic when they open their inbox and see every business or big box store sending out sales announcements. Now we have early Black Friday, pre-Black Friday, extra sales, is Black Friday even a thing anymore? I don’t even know if anyone lines up after Thanksgiving dinner.
When you decide to run a sale from panic mode, that’s a reaction not an intentional decision.
But you have to ask yourself, do you really want to run a Black Friday at all? A lot of business owners don’t want to but they feel the pressure to put something together because it feels like every other business owner is doing it. And that is what episode 160 is all about. Check it out on the podcast this week here: Katy Calls BS, episode 160.
Whether you are fan of the day or not, how do you know if a Black Friday sale is right for you and your business? This blog post will help you decide. Grab your numbers or a rough estimate and answer these five questions.
1. Who is the sale for?
Your audience has two kinds of people. People who already bought from you and love what you do and people who haven’t.
Two researchers, Eric Anderson and Duncan Simester, ran field experiments with a mail-order catalog. Some customers got deeper discounts at about 60% off while a control group got about 30% off. They tracked what each group purchased over a two year period.
Established customers who had the deeper discount purchased less further down the road. They bought fewer items, at lower prices, and spent about 20% less per customer over the tracking period. First-time customers went the opposite direction. In the two follow-up studies, they purchased 14% and 34% more later.
But this was catalog retail not digital products, how does it apply to what we are doing here? A deep discount can work as a way to bring in new buyers. Think about a flash sale instead of a long sale. Get new eyes into your world. It can cost you when you offer it to people who would’ve paid full price. You need to know your audience and time it right.
Ask yourself who you are really discounting for and by the way, use special pricing not discount. If the answer is “my existing list,” pump the brakes my friend! Offer an upgrade or throw in a coaching session instead. They already know the value of what you have to offer so make sure whatever you are offering in your “discount” or special pricing is worth it.
2. What are your numbers?
Listen, I am not a numbers girl. I’m creative and math needs to solve its own problems. You need to look at your sales from last Black Friday week. Compare them to a normal stretch around the same time.
Let’s say your offer is $200. In a normal stretch you sell 10. During last years sale, you priced it at $140 and sold 16.
Normal stretch: 10 x $200 = $2000
Black Friday Sale: 16 x $140 = $2240
Meh. You came out making $240 more without counting your time. If we dive into even more, let’s say 10 of those sale buyers would have purchased at full price anyway. That’s $60 per person that you could have made or $600.
If we subtract the hours spent on emails, posts, support, and stress trying to get your sale seen in a time of chaotic posting, was it worth it? Your numbers will tell you. If you don’t have numbers from last year, that’s your answer. Do you want to bet your energy on it if you don’t know the sale will pay off?
3. What happened after the sale?
The sales are only part of the picture. Black Friday sales can be an amazing boost for one time sales. As small business owners, we want return buyers. We are trying to bring people back as clients. Check these for last year’s sale buyers against your full price buyers:
- Refunds: Did sale buyers ask for more refunds?
- Finishing: Did they open the product, use it, or complete it?
- Support: Did they send more questions?
- Buying again: Did they come back for other offers?
If your sale buyers are asking for more refunds, causing more headaches because they aren’t your ideal clients, not opening the digital products, or never purchasing another product from you, the sale costs you more than the revenue shows.
4. Why do you really want to run a Black Friday sale?
There are 3 main reasons people jump on a Black Friday sale and there’s no shame in this game.
Fear. Everyone else is doing it. The pressure is real. If this is your reason, the answer is usually skip the sale, or wait until the feeling passes. Creating a sale in panic mode is not great.
Growth. You want new buyers, I get it, we all do! A sale can absolutely help this but it doesn’t have to be now. There is a way to do this and we’ll talk about it in step 5.
Cash. This is a big one especially right now. A Xero survey found 77% of business owners who run a holiday promo named cash flow as their main goal. A sale brings money in fast. Be super honest with yourself. You’re trading a lower price for speed. If cash is the reason, ask if you can get it another way first. A direct email to people who already asked about your offer at full price might work even better!
Can you write your reason for the sale down in one sentence? If you can’t you’re reacting.
5. What are you going to sell?
If you are going to sell something, how do you choose? Your digital product ecosystem has four layers: an entry point that builds trust, a layer that teaches and supports, a core revenue layer, and an expansion layer for buyers outside your world. A sale does not need to reach all of these layers. (Read more about the layers here)
If you discount anything, aim at the entry layer where your new buyers come in. Keep the core and expansion layers at full price. This is where your existing audience is and a Black Friday sale is perfect for new clients with an entry level product.
This is also the right place to test. Run a small offer on one entry level product and track your numbers!
What’s next?
Make the call. Are your running a Black Friday sale or not? You don’t need to but if you want to, those emails are coming in hot any day now so come up with a plan ASAP and definitely before November 1.
Once you decide, pick whether you are running it, skipping it, or swapping it.
Run it if your numbers show new buyers, not just discounts to people who would have paid anyway. Your sale price still leaves you a profit and you still have energy.
Skip it if you don’t have the number or you aren’t feeling it. Skipping is a decision, NOT a failure.
Swap it if you want to offer something but you don’t want to cut your price. A bonus, a bundle of products you already have, or a start in the new year option all add value without lowering what you charge.
Don’t throw something together to throw it out there though. Make a plan, write it down, including the reason and the date. Then when someone’s 50% off email lands in your inbox, you aren’t doubting your decision.
Still not sure what to do?
If you want the full picture on how to run a flash sale, why girl math makes sales feel better than they are, and what the shopper data looks like this year, listen to this week’s episode of Katy Calls BS.
Episode 160: To Black Friday or Not?
Not sure which of your products to sell? Or maybe you don’t know what belongs in the entry layer, which ones are your core authority, or what a sale would do to your whole digital product suite, let’s take a look with the Digital Product Infrastructure Audit!
Quick answer: To decide if you should run a Black Friday sale, check your own numbers instead of your inbox. Decide who the sale is for, compare last year’s sale to a normal stretch, look at refunds and repeat buying after the sale, name your real reason (fear, growth, or cash), and discount only the entry layer of your suite. Then write down one decision, run it, skip it, or swap it, before November 1.
