Black Friday Part 1 - Create a Compelling Offer | Matt Edmundson

My name is Matt Edmundson and you are listening to the eCommerce Podcast. Now, today we are kick-starting a new mini series, a brand new mini series. All about Black Friday. And granted this whole miniseries thing is a little bit different to how we normally do, uh, key eCommerce Podcast. I'll grant you that, but I think it's gonna be really, really helpful as we aplo, approach, approach, approach Black Friday. And yes. I know it's August, but that's exactly the point, isn't it?

Because whilst everyone else is thinking about, you know, summer holidays and what books to read on the beach, whether you should read a Kindle book or a real book, and that whole debate. I think the smartest eCommerce o operators are gonna be planning their biggest sales period of the year. Yes, I do. So hopefully this year we can avoid the usual panic, uh, just before Black Friday and use the time that we have, which is normally downtime, just to

chew on a few things, to mull on a few things and get ourselves ready. So that's what this series is all about, shorter episodes. Much more condensed, much more bite-sized, gonna help you throughout August. Now, if you have listened to, uh, last week's episode, you'll have heard me talk about some of the changes that we are bringing to the eCommerce Podcast. Some of the really exciting changes actually, and I'm very excited about it. Uh, and this mini series is kicking us into that.

So if you're regular to the show, you go Matt, a miniseries. What's this all about? You did this episode last week, solo. What's going on this week? Well, I'm glad you're asking. I'm glad you want to know. Uh, these episodes are actually, uh, repurpose content from our e-commerce cohorts group Now.

If you've been around for a while, you know, you will know that we ran a paid membership group called eCommerce Cohort, and for the last couple of months I've been talking about how it's now free to join. Yes, I have, uh, we've been changing it around. eCommerce Cohort is no longer a paid community. Uh, that community that we ran for a number of years, we've decided to repurpose both the content. Uh, we're gonna bring some of that to the podcast, uh, but also the name.

So we're still using e-commerce Cohort. It's just getting a bit of an overhaul. Uh, like I said, I've been talking about this for the past few weeks on the show, and the reason, you know, is well, it's all in our plans to sort of release a lot of this content all for free. Uh, and it's now in the new e-commerce Cohort, uh, which you can find out more information about actually on eCommerce Podcast dot net. That's what we're doing because as you know, I talked about this last week.

All good stuff that we just want to put out there, rather than just having it gather, you know, the old digital dust behind some paywalls that's not say. We are permanently changing e eCommerce Podcast. We're not at all. This is just a temporary, uh, little miniseries to help you whilst I'm away on holiday in August. If you don't know, I take the whole month of August off. Uh, it's a sabbatical thing that I've done. I've written about it on LinkedIn if you wanna know more, um, and why I do that.

Um, but like I say, I, I use August to think about all kinds of things. One of them is gonna be Black Friday, just to mull on some ideas. Uh, and so yeah, we're about to get into it. Practical, actionable content. No fluff, no theory, just real strategies that we've used to generate. Let me tell you, an awful lot of sales on Black Friday across multiple different platforms. It's not an easy word to say apparently, uh, for multiple different types of businesses, uh, including actually.

Businesses that didn't run Black Friday campaigns, they decided to opt out. I'm gonna talk about that in this episode as well, uh, which I find fascinating. So this is the first episode in the mini series all about creating compelling offers that actually convert. And how we should avoid just discounting our way to a zero margin. Now, as I said, they're a little bit different. The format's different.

If you use to the show, this is some teaching content that I actually did four cohorts about Black Friday. There's four episodes plus a bonus q and a. We're gonna release all of those. So if you, uh, wanna stay connected with this, if you wanna stay, you know, connected with what's going on, make sure you like and subscribe. You know, because why would you not? Right?

And if you are the kind of chap or chap PE that likes to learn visually, you know, if you, if you need to see things, uh, make sure you check out the YouTube channel because this teaching had quite a few slides, which you'll also get to see. On the video, 'cause I know most, like 99.98% of you listen to this in audio format. Um, uh, but you know, if you haven't done so already, go check out the YouTube channel and you can see the slides.

Uh, definitely worth doing, especially if you're like me, you like to see stuff visually. Also, before we get into it, I appreciate this is a long introduction. They won't all be this long. I'm just introducing the miniseries. Um, I'm really curious to know what you think about this type of format, uh, for the show, like these little miniseries with bite-sized practical bits of content.

'cause if you like them, then we can release more and more stuff from Cohort onto the podcast platform as well, so you'd get access to that if it's not helpful. Let me know if it is helpful. Let me know should we mix more of this type of content into what we're doing on EP. And all you have to do is just find me on LinkedIn. Just go to, uh, LinkedIn slash in, I think it is slash Matt Edmundson and you'll find me there. Or just go to the website, let me know.

Uh, like I said, we're gonna be doing this for the next five weeks. We've got five episodes coming up. Um, and I really do genuinely wanna know what you think to them. Uh, is it helpful, uh, is it not? I, help me, help me help you to quote Jerry Maguire. Now, he didn't say that, did he? It was the chap in Jerry Maguire that said it to Jerry Maguire, help me to help you. Okay. All right. Let's get, that's enough, isn't it? Let's get onto the, um, the episode. So that's enough from me.

Here's me talking to you, uh, about how to start thinking about your Black Friday by creating compelling offers that protect your margins whilst driving sales. Okay, straight into it. Black Friday create a compelling offer. That is what we want to do. So how do we do that? What's on the cards for that, Matt? Well, let me, let me go through that with you. Let me pull up some stuff here. So Black Friday, everything comes down to your offer. Right.

It's just a real simple thing to mention, but it's really, really powerful. So on one hand you've got this huge downside of Black Friday and we put it here, that it is the pressure to discount and that has an impact on margin. Okay, so it is a massive pressure on Black Friday, the downside, but on the other

hand, it is the time of year that you can lower your prices without feeling like you are losing brand identity because everyone expects discounts and it's okay. I think what. I, I appreciate for some companies it's not right, but for the majority of people you can d get away with discounting a Black Friday 'cause it's just what the consumer expects. And so everything about Black Friday comes down to, uh, your offer, how well it's gonna go in some respects.

Now I appreciate people are gonna be Shan to the screen. Go. That's not exactly entirely true, is it? And no it isn't because I think, um, there are people who will buy just because it's Black Friday, consumer demand does go up. Even if you don't have any offers on your website, you will sell more during the Black Friday weekend, then you will the weekend previously, just because that's the nature of where people are at.

But if you are gonna do Black Friday, honestly, it comes down to your offer. Okay. So let's dig into this. Uh, how do we create compelling offer? Well, the first thing to say actually is abstinence is okay. Right. Abstinence is okay. You can say no to Black Friday. You don't have to do it. And I want to give you permission, as odd as that sounds, not to do Black Friday. For some companies that I've run, uh, we have done Black Friday and we are gonna do Black Friday this year.

For other companies. We opted out. It didn't make sense for us, for our brand, for our values, to get caught up into Black Friday. And it was okay to not get caught into it and sacrifice all the margin and create chaos and mayhem for our customer service and warehouse teams to make no real money at the end of it. And in effect, to pull customers from December, that would've made me money into November when they didn't. Right. So we learned a lot of that kind of stuff and we thought, you know.

It's okay not to do Black Friday. Abstinence is okay. There is, um, the company Ray. Uh, which actually I really like their story. They just put on their website, we're outside, join us. They gave all of their staff the day off on Black Friday and they all went to the hills. They're an outdoor brand, uh, and they're like, why don't you come and join us? You can buy our website if you like, but no one's here. We'll see you soon, sort of thing.

And that actually gave 'em a lot of pr, which actually did 'em a lot of goods, et cetera, et cetera. So depending on your brand, depending on your values, depending on your margins. You, you may not wanna, uh, even get involved with Black Friday. And again, right here at the start, it is okay not to, there is pressure to get involved. It's okay if you don't, if you do, let's figure some of this stuff out, right?

So the key ratio that I want you to think about, uh, when it comes to Black Friday is this margin to LTV or lifetime value of your customer, right? So. I want to think about margin and I want to think about lifetime value of customer.

If I'm sacrificing margin over here, am I increasing the lifetime value of customers over here? Right. I've gotta think about both because does sacrificing margin for the sake of sacrificing margin? Yeah, it doesn't make a lot of sense to me. So we've, uh, we, we, I, I'm interested in this margin and long, uh, long term value. Uh. Lifetime value, right? The lifetime value of the customer. So how do we do that? So here are some ideas, right?

So one idea to increase lifetime value is whenever you're com creating your compelling offer. Use upsells and bundles to enable you to increase the discount and the average order value, right? So if I sell this product here, I mean, you know, uh, if you've been following along with other stuff, I sell this. Um, is that gonna zoom? There we go. I think, there we go. We've got it focused. So this is, uh, an Omega-3, a vegan certified Omega-3, which we sell on Vegetology dot com.

It's one of my websites. It's a beautiful little product. Big fan of it on its own 20 bucks, right? Um, so if I discount that. I am really tight on margin all of a sudden. So what I can do is I can say, well, listen, um, we can use upsells, we can use bundles to create things that, that enabled me to create discounts. But my average order value increases. And so if I'm getting someone come into my website, it's never really purchased from me before. Um, and you know, we're kind of like.

Uh, just discounting one of our products and they buy it and they don't come back. That doesn't help me. So what I want to think about is their lifetime value. And to do that, I can increase the, the amount they put in the basket at one point in time, which means I'm okay to discount 'cause at least I've got some profit in that. Um, and it enables me to get them.

Especially for new customers to get 'em using more than one product to get 'em using several products to, you know, increase their chances of coming back and reusing what's going on. So, um, we can use upsells and bundles. So when you're thinking about your offer, what upsells, what bundles can you throw in there to increase, um, your average order value? Protect your margin. I like this strategy of giving your best discounts to your best customers. Right now, remember.

Um, the 80 20 rule here, in other words, that, uh, 80% of your profits come from 20% of your customers or whatever the specific ratio is for you in your company. I'm a big fan of this as a principle. Um, we are, all I say, we are all, I'm gonna assume we are all partakers of insurance companies and mobile phone companies that give deep discounts to new customers. And I cannot begin to tell you how many podcasts I listen to and there's an advert for.

Uh, a mobile company, which says, we are doing this available to new customers only. So if you're an existing customer, you can knickers and we devalue you, and it's like it's their new customer acquisition strategy.

It just sends a wrong message to existing customers. And so Black Friday's one of those times where actually you can put offers, uh, to your best customers, give your best discounts to your best customers. Don't make 'em available on the general website. Create a specific landing page, send 'em to that land landing page and say, this is available only for you guys. 'cause you're awesome. You are our best customers.

We really value you and to do, to show you that we're gonna give you something that no one else has got access to. Okay? So, um, I'm a big fan of giving your best discounts to your best customers. Uh, another strategy here is are better offers available to email subscribers.

So similar to this, um, giving your best deals to your best customers, you can put a notice on your website, um, uh, saying, listen, sign up to our emails newsletter now, because when it comes to Black Friday, um, and it's October when I'm recording this, so you know, I'm not far away when it comes to Black Friday offers, we're gonna put some offers on the website, but if you really want the best offers. Sign up to our emails newsletter because, um, that's where they're gonna be, right?

We're gonna give the best offers to our email subscribers. Uh, and that gets your email list even more active, right? People signing up to your email list and just make sure you follow that through that actually the best offers go to your email subscribers. Uh, another one here. GWP gift with purchase. So that can, that's a great way to protect margin, a great way to protect margin. Something that I have used many times over the years. Gift with purchase.

So, um, the classic example was a few years ago when it came to Black Friday, we went and got, um, some candles made and they were made by a company that also did candles for let's. Well, let's not name drop, but they did candles for a very, very popular candle shop. Uh, and so we knew the quality was good and we knew that people would like the smell. So we were like, we could get those candles. And we sold them on our website for like 20, 25 pounds, something like that.

I can't remember the exact price if I'm honest with you. Um, and they were a high perceived item, but the cost of manufacture was like four quid maybe. Um. And so we had good margin in the candle, like most candle people do. And so we were like, okay, this is interesting. So what we did, rather than giving deep discounts on Black Friday, was we said, listen, if you spend over 50 pounds, we will give you, or even over 25 pounds, we will give you, uh, this candle worth 25 pounds.

Totally free. That's our Black Friday offering. People are like, this is amazing. So I'm, I'm getting this sort of free 25 quid candle. If I spend 25 quid, that's almost like I'm not spending any money at all. Uh, and so that worked really, really well. Rather than just saying, oh, here's three pounds off your order, which just didn't feel very sexy, if I'm honest with you. So, gifts with purchase, uh, if you've got them and got the ability to get stuff in. Oh, great word of caution here.

I have done it in the past where we've gone, we've got a load of stock that no one's bought, so I'm gonna give that as a gift with purchase. But there's a reason no one's bought the stock.

And there's a reason why they don't care if that's a gift with purchase. 'cause they don't want it. So, um, you can offload stock with gifts, with purchase, increase perceived value, but if you don't try and offload stuff that people don't really want, it just becomes a bit, nah, nah, sort of falls flat. Try gift cards with purchase. This is a really clever trick that I have seen. Um, I, I first saw this with Ikea. Ikea did this thing where, um, if you went to their shop, was it a few years ago?

I saw it. You went to their shop and it said if you bought a Christmas tree from them, it was around, obviously around Christmas time. If you bought a Christmas tree, a real Christmas tree for like, I can't remember the figure, let's assume it was like 50 bucks, right? If you bought a Christmas tree for 50 bucks from them, they would give you a gift card with that purchase, four 50 pounds. And you kind of think, hang on a minute, then I'm getting a free Christmas tree.

I'm spending my money now and you're giving me a gift card. So you then read the fine print of the gift card, which says this gift card can only be redeemed between the 1st of January and the 31st of January next year. Which meant I would have to go back to the store to use that at a very specific time where it was ordinarily quiet for them. Okay. How many people redeem that gift card? I'm gonna suggest maybe 10, 15%, which is how they could afford to do it. Something like that.

I don't actually know what the numbers are. I was a total guess, by the way. So, uh, don't quote me. But the gift, um, cards with purchase are a really great thing to do. Now, you don't have to do that, spend 50 quid, get a 50 quid gift card, uh, but you can only use that gift card between the hours of 4:00 PM and five plus four on the 31st of March, right? Uh oh. The camera has gone off. Sorry about that, ladies, gentlemen, we are now back. Yes we are.

So, yeah, I was saying you don't have to do, you know, the real sort of, um, high gift card with a really narrow time when you can redeem it. Um, but gift cards with purchase are a great way to bring people back. Remember, we're thinking about increasing average order value, lifetime value. Remember, this is the two things. And so, um, rather than giving a hefty discount, we can say, you know.

Uh, instead of giving a 20% discount, give 'em a 20% gift card to spend on your website, or even a 30% gift card to spend on your website. Uh, might be worth it. You know, you can always try it. Like, again, my tip is make sure the gift card, they can't redeem it on that specific order. They have to come back to the website. Okay? Free delivery is another good way to protect margin. So if you don't do free delivery as a sort of standard. Many websites don't.

Uh, you can offer free delivery around Black Friday. That really, really does kill it. And it protects the margin on your products. And again, people perceive like they're getting greater value. Uh, buy now later, uh, buy now later, buy now, pay later. Works really well if you wanna increase lifetime value.

So people tend to buy more. If you offer that as a feature on your website, there are some questions around that that you have to work through. Um, if you don't already have buy now, pay later on your website for me. There are questions around encouraging people into debt that doesn't quite totally sit right with me, so I'd have to be really careful on the messaging. Um, uh, that's just something a a about us as a, at a, at a company.

I appreciate, you know, people are using credit cards to buy this stuff, but, um. I just don't know if I personally want to be seen to be promoting that, but I get why people do it. Um, it's not something I'm totally opposed to. I would personally have to be really careful about it, but it is something that you can do to increase, um, lifetime value. Charity promotion is a great way to protect margin.

Uh, when creating com a compelling offer for Black Friday, you can have, uh, a charity to promote. So instead of discounting your product, say, listen, we were gonna discount our products by 10%, but rather than do that because the the time that we're in, like, um, as things currently stand at the time of recording, there is a. Sort of, you know, cost of living crisis here in the uk. I'm seriously tempted to say, right.

Uh, rather than discounting, what we're gonna do is everybody that orders, we are gonna donate. Uh. X amount of pounds to this charity that is gonna help, um, the elderly, their homes this Christmas as well as keep food on their tables because I think it's a real crisis that is looming. Um, and we can use Black Friday and people's desire to buy stuff as a way to raise money for charity. I really like that as an idea. So I can include charity promotion. Just don't do it.

I've mentioned this before. Don't do it in a cheesy way. Don't do it in an inauthentic way. Be real, be genuine with it. Um, but you could totally look at doing something like that. Create a top tip, create a sense of urgency. So with your compelling offer, whatever you do, create a sense of urgency. Uh, well, I came across this, I thought it was clever. They put like a little countdown time on it. Hurry up, uh, 50 books off this, uh, Halloween only.

So this is obviously an offering up to Halloween. They've got like a countdown timer going on there. Um, only 12 left in stock. Please don't lie. Uh, if, if there, if there's 400 in stock, don't just put 12 'cause that's inauthentic. I'm not telling you to do that. What I am saying is create a sense of urgency so you can put the countdown timers on there. This offer expires in three days.

Two days, one day, four hours, 10 minutes, dot, dot, dot, dot, and create that sense of urgency in your offers. Put an end date on it. This is only available for dot, dot, dot, uh, and more people will take advantage of it. So that's the top tip. Whenever you are creating your compelling offers, use a sense of urgency. So take all those things that, uh, we've gone through. Remember the key thing that we're thinking of? Black Friday, maintain margin as much as possible.

Obviously we're gonna have to discount with Black Friday in some way or give some perceived level of discount. Um. And contrast that ratio with lifetime value. If I increase discount, can I increase lifetime value of that customer? How do I maintain that? How do I keep that going? Right? That's super, super important. I don't mind sacrificing margin today if I have more and greater lifetime value for customers in the future. Play that balance.

Well use the tips that we've told you, create your compelling offer and let me know. What you're doing, because I would love to see it. Um, I'm, I always love to learn from others actually, what they're doing around Black Friday. So do let me know, uh, would really, really appreciate that. And then I will see you in the next video where we talk about your first time buyer strategy. See you in there. Wow. Back from me to me. I hope you found that, uh, useful and helpful.

The key takeaway, black Friday isn't just about discounting. It's about creating offers that increase customer lifetime value whilst protecting your margins. At all times where possible. Next week we are diving into the first time buyer strategies for Black Friday. Like how do you turn those bargain hunters into loyal customers? How do you build relationships, not just transactions? Well, that's in episode two of our Black Friday mini series.

Uh, and it's gonna build on perfectly from what we've covered today. So. Quick reminder, all of this content comes from the e-commerce Cohort archives. There's lots more where this has come from. So make sure you subscribe to the show. And you know, I've talked about this before in the show. We are updating our newsletter that's starting in September. If you haven't subscribed to the newsletter already, join the thousands of other people that are on that newsletter.

Get on it, because all of this stuff actually is going into the newsletter first. So if you wanna be the first people to see it and get connected with it. Uh, do check that out. There's more information about all of this at eCommerce Podcast dot net. You can find out about how to sign up to the newsletter. You can find out about the new free version of eCommerce Cohort, where we're gonna put all this content there, you can access that.

Plus we have member, we have groups where we zoom, call Google meets with other eCommerce entrepreneurs and just shoot the breeze. Talk about our ideas, what's working, what's not working. Always great to connect with peers from around the world and talk about eCommerce. So you can do that for free. Uh, just find out more eCommerce Podcast dot net. Don't forget to let me know what you think about this new format, but that's it from me this week. Uh, I will see you in episode two.

Until then, start planning those Black Friday offers. That's it from me. Bye for now.