Black Friday deals – yay or nay?
A few years ago I got an email from a client asking me to review “the attached” document. I opened it up to find a list of discounts and special offers she planned to make throughout the year. As I looked at the list my heart sank – each and every one was carefully thought out in terms of what the client was getting. But no thought had been put into whether or not they were a good business idea.
I called and spoke to her about it. Asking her what the business purpose and goal were for each one. Part way through our discussion it dawned on her and she said, “Janene, from what you’re asking me I think I see what you’re getting at. I did this because it’s what I see others doing. You’re asking me to also look at what it means and if it’s right for my business. Right?”
She got it!
As the holiday season approaches, businesses often contemplate the idea of offering Black Friday discounts to lure in customers. It seems like everyone else is doing it. But is this strategy right for your business?
Join me as I explore the origins of Black Friday, its evolution into a global phenomenon, and the critical questions you should ask yourself before adding this to your discount strategy.
In This Episode
We’ll look at the importance of aligning black friday deals with your brand values, understanding your target customer’s expectations, and whether following the competition is a wise choice. Plus, how important is it to ensure that special deals and offers have a real business purpose and are aligned with your overall discount strategy. Without that you’re just discounting for no reason and giving money away.
Deciding whether or not to offer Black Friday deals, is a strategic business move. Listening to this episode gives you the tools and insights to make an informed choice that aligns with you, your business and your customers and helps you achieve your business goals.
Tune in as I help you navigate the intricate world of pricing and business strategy.
Podcast Episode Highlights
- 0:00 Intro
- 2:24 Decoding Origins and Tactics
- 5:12 Brand-Aligned Black Friday
- 8:29 Competitor Caution: Business Sense
- 11:23 Volume, Profit, Math Mastery
- 13:21 Wrapping it Up
Favorite quotes about black friday deals
“Ask yourself, is this aligned with my brand and the values of my business, but also your personal values.” Janene
“If you’re positioning yourself as a premium brand for something, and then offering deep discounts on Black Friday, just because it’s the last Friday in November, then it doesn’t really make much sense. From a logical perspective it would actually erode your value perception as a luxury (premium) brand.” Janene
“If you’re going to do a large part of your yearly seals, like 50% for example over Black Friday deals then yea, you kind of have to do it. BUT very few businesses do that.” Janene
“Just because your competition is doing it doesn’t mean it’s the right thing for you.” Janene
*Do the math. That’s right. You have to do the math.” Janene
Tool Recommendation: Pricing Tool Kit
Other resources on topics from this episode
Want to learn how to set your prices? Join The Fair Price Formula group program and learn how to set prices for your business with more confidence.
Rate, Review and Follow the Show on Apple Podcasts
“I’ve just found my Pricing Resource!” … “A binge worthy podcast.” … “I learned so much about how to improve my profitability.”
If that sounds like you, please consider rating and reviewing the pricing podcast. It helps me spread the word to more people and ultimately get more small businesses on the path to sustainable profitability and business success. Click right here, tap to rate with five stars, then select “Write a Review.” Last let me know what you loved most about the episode!
One more thing. If you don’t already, follow my pricing podcast. New episodes come out every couple of weeks, plus bonus episode. If you’re not following there’s a good chance you’ll miss something.
Reach Out, Connect and Book a Call with Janene
Get started improving your business. Beyond this pricing podcast there’s more for you to explore. Sometimes it’s difficult to know where to begin. I suggest you Download the the self assessment Pricing Scorecard to get a view of what’s working and not in your business. Also if you’ve ever wondered “What’s a fair price?” then check out my on-demand webinar “Getting to A Fair Price”. Two great places to get started with pricing in your business today.
Get in touch with Janene, your Business Strategist & Pricing Expert. If you’ve got a business question that needs answering, a pricing challenge you’re facing or you have suggestions for future topics or guests, let me know. Your questions and insights often become episodes. Share yours with me and let’s see where it goes. Contact Janene.
Listen up! Don’t miss out. There’s a lot going on and you’ll want to be in the know. Follow my YouTube channel (rate it too please) so you don’t miss an episode of Live with The Pricing Lady or join my Email List.
Transform your business and life. My mission is to help you build a sustainably profitable business. One where you can confidently charge for the value you deliver. Curious about my coaching and consulting offers, check them out. Let’s see how we can work together. Book a complimentary Call today!
Today we’re going to be talking about a very special topic. This is a question I get so often “Should I offer Black Friday deals?”
Understanding the Purpose and Tactics
It’s that time of year we’re so many businesses are thinking about offering black Friday deals. I even had a web class recently where somebody asked me if I was going to ask, offer them as well. It made me realize that I’ve actually never addressed this topic in one of my podcast episodes. I thought, what a perfect time to do it, because I know a lot of you are thinking about it. Here’s my thing about black Friday deals.
Now, if we look at the industry in which this whole thing started and why it started, it gives us some of the answers. They started in the retail industry and me having grown up in the US and you probably are aware of that, this whole concept came from there. This was a tactic that was used to get people out of the house on a day when they’re not working at least most people when they’re not working and get them into the shops to get started on their Christmas shopping.
And that was the retail industry’s way of really getting people off the sofa and into the shops. Now it has expanded and exploded into a global phenomenon. When I first moved to Switzerland in 2001, they never had anything like a breakfast black Friday sale here.
A global phenomenon
In Switzerland until like the last two or three years, they only had sales two times of year. In June. May June time. And then after Christmas, basically to the middle of January, those were the only times they ever had sales. Either just before or just after COVID hit, we started seeing black Friday sales here in Switzerland and, and always made me laugh because you know, the concept compass from something that is totally unrelated to Switzerland in itself. But yes, we even have them over here in Europe. And now with the internet, of course, we also have cyber-Monday, which is an online version of black Friday. And that is also very prominent, not just in north America, but across the globe.
Now, when I think about offering black Friday deals for small businesses. I start to get a little bit nervous. You have to remember that these retail shops, they’re talking large volumes. They’re also talking about shifting a lot of inventory. Now that may apply in your small business, but places where I don’t really see it applying as much is in service-based businesses, especially. I see a lot of coaches and therapists and people offering services who also offer Black Friday sales. It makes me wonder. What’s the real business purpose behind that. And is it really helping their business or not. Let’s look at a few questions that you can be asking yourself so you can decide if it’s the best strategy for your business.
Brand-Aligned Black Friday
First, you want to ask yourself, is this aligned with my brand and the values of my business, but also your personal values. Some cultures have a deep. Let’s say practice of wheeling and dealing and discounting. It may be for your target customer group or part of the world that you’re in that, you know, this is something that is very much aligned with the values and the practices in your industry or personally for you.
If you’re positioning yourself as a premium brand for something, and then offering deep discounts on Black Friday, just because it’s the last Friday in November, that it doesn’t really make much sense. From a logical perspective it would actually erode your value perception as a luxury (premium) brand.
If you’re trying to play at the premium or the luxury end of the spectrum you might. Let me say you might proceed with caution for sure. If you were trying to decide whether or not to do that if one of your values is transparency, for example, in your business, and you’re transparent with your prices and then you come along and one random Friday of the year, you offer a deep discount, then you’re kind of getting, telling your customers that there’s actually more profit in there than maybe they thought, and that you can. No. And that you’re capable of offering that while still making money. Then they may question the transparency. So again, this are two examples of what I mean by making sure it’s aligned with your brand and or your business or personal values.
Know Your Customer
Next. You knew this was coming and usually it comes first, but I put it second here today is who is your target customer right now? Just because customers want to get a cheaper price. Does it mean you have to give it to them? If your target customer is people who are looking for the lowest offer, the lowest price. Then it could be beneficial to have a Black Friday sale, especially if your competition is also offering it. I’m not saying you should. I’m just saying you could.
If at the same time, if your customers are looking for something more prestigious or looking are interested in paying more for something, because sometimes customers are then, if they’re looking really for quality and high quality, then offering black Fridays discounts actually kind of gives the opposite message of that. You might not want to do that. So have a look at who your target customer is. If you’ve developed a bio or an avatar of who they are, I like to give a target customers and name.
If we say, what would Steve want or what would Susan want? Then you can always make the more personal. And then think about it in the context of how would they perceive that. Not just that they might be excited about getting a discount, but with that have an impact on their perception of the value of what your product or your service or software delivers.
Competitor Caution: Business Sense
Another reason you might choose to do it is because that’s what your competitors are doing. But I put a big, big word of caution here about this, because just because your competition is doing it doesn’t mean it’s the right thing for you. Yeah. If you’re playing in a really cutthroat business, you may choose to do that. But then you also have to be aware that you may be getting yourself into a price war situation if you’re not careful. There are pros and cons to doing that, to following the competition. If you’re the market leader, then in this case, you might be leading everybody else, right. With what you’re doing. But it could be an indication that it could be something beneficial to you.
The next thing is it has to make good business sense. And this is where I see most small businesses, instead of looking at this from a business perspective, like if I do this, I have the potential to get this, and I can ensure that I can get this out of it. If I do X, Y and said, yeah, they don’t take the time to really think about it.
They just throw a special offer out there and hope that people will take advantage of it, but they don’t actually know if it makes sense for their business or not.
A few years ago, I had a client. She sent me a list to review and it was the discounts that she was going to offer throughout the year. And when I first started to myself, I had a little chuckle about it because I thought, okay, we haven’t even set your price list and you’re already, lowering the prices and offering discounts. Let’s take a look at this. When we got on our next call, I asked her, okay, what’s the reason behind these. And she was like, well, I see everybody else is out there doing this. I thought I need to as well.
And I said, well, what’s the business purpose behind it? What are you trying to achieve by doing it? And she said, well, I thought, I just pull in a few customers at different points of the year. I said, okay. But we did our planning with this price. Now we need to actually adjust our planning to the price that you’re actually going to be selling out a good portion of the time. At least a weighted average between your list price and the special offer prices. And when we took a look at that math, it really drove home.
The point that every discount you make has an impact on your profitability. And that’s something that you need to understand as a result of our conversation and our strategizing and thinking about, does this make good business sense? She decided to do away with most of them because it wasn’t really going to help her business. And because it didn’t really fit the target customer that she was looking at. Think about whether or not it makes good business sense.
Volume, profit, & doing the math
Those are the four things that I want you to reflect on as you’re thinking about whether or not to do this.
Now, what are good business reasons to do this. For example, if you’re going to do 50% of your volume through black Friday sales, then, okay. Yeah, you could, you kind of got to do that in order to get the volume. If you’re really going to pull in a lot of volume, then that’s a good reason to do it. If you’re going to pull in two or three customers, it’s probably not worth your while, and its probably business, you would have gotten any how.
Basically you’re just giving money away for free. Right. And then it’s not such a good decision to do. If you can sell enough, additional volume with such a discount that you actually make more profit, then that’s another good business reason to do it. Right. So. Again, in order to understand both of these two things, there is one very critical thing that you need to do, which most people don’t do. And that is if you know me you know what I’m going to say. Do the math. That’s right. You have to do the math.
Your Toolkit for Informed Pricing
Sit down, do the math and understand what it means for your business. Now I’ve got a tool kit, a pricing tool kit on my website. I’ll put the link in the show notes. And in there is a discount calculator. With that, you can very quickly, I mean, within like 30 seconds, understand how much additional volume you would need to sell with a certain level of discount in order to break even on gross profit. And that should be your go-to tool whenever you’re thinking about discounting. But especially if you’re thinking, ah, I’m going to sell more. I’ll make more money. If you’re thinking that, then you need to go grab that tool kit and use that calculator in there.
Wrapping it Up
That’s what I wanted to share with you in this episode, let’s recap. If you’re considering offering black Friday deals in your business, you need to treat this like any other decision you’re making in your business as a strategic business decision. And here are the four questions we said, you should be asking yourself. First of all, is offering those deals aligned with your brand, your business values and your personal values.
Second of all, does it fit your target customer and how will it impact their perception? Of value. Third, what are the competition doing? And just because they’re doing it, does that really mean you should be doing it as well? And fourth, does this make good business sense? If you can answer those four questions, it’ll help you hone in on whether or not this is the right decision for you. But do make sure if you choose to do it, that you sit down and do the math. That’s the last tip for this episode, because the math will help you understand what it really means for your business and whether or not it is a good business decision.