Black Friday: Expert InterviewWe sat down with our eCommerce Service Manager, Jack Bates, to discuss Black Friday preparations and get his insight on best practices for eCommerce businesses.
If you're a small business owner preparing for Black Friday, watch this video for useful tips and advice from an eCommerce expert.
You can find the transcript below...
Want to drive sales? Just add people.
How do I know if taking part in Black Friday is right for my business?
“There are a lot of things to consider when organising a promotion for Black Friday with an eCommerce business. It’s important to take into account the margins of your products and also the industry that you’re operating in.
It also depends on whether you’re selling B2C or B2B. If you’re operating as B2B, I don’t necessarily think a promotion for Black Friday is viable, unless you’re offering the savings to your current customers.
If you’re B2C, you need to think about lifetime value and product margins. Ultimately, price is always going to be king, making loyalty subject to attrition.
So, if you are looking to run a promotion through the Black Friday period, these are the main things I would consider.”
How do I know what discounts/special offers to use? How many do I need to offer?
“This comes back to profit margins. If you only have a small margin, do not offer a sale, as it will make it hard for you to recoup the costs. The only time that I’d say that this would be sensible, is if you’re looking at new customer acquisition, which will have a high rate in repeat purchases and therefore lifetime value.
However, if you’re looking at offering discounts of, let’s say, 10,20,30%, or potentially even higher, you want to consider how often that product is purchased. Are you just trying to get rid of old stock to improve cash flow? Or are you trying to push top-selling products?
The decision is down to you at the end of the day, but I’d always suggest offering discounts between 10-20%, again only offering this on products that have profit margins sitting in the 30-40% range.”
What is the best way to make my customers aware of my special offers?
“Raising awareness of your special offers can be done through a range of channels, for example, organic posting on your social media pages, paid media, email marketing, etc. The more that you spread this message, this will help to get customers who may have made a past purchase back to your website, but also then increase the awareness in potential new customers from shares and follows.
It also depends on the industry that you’re operating in, e.g. there may be certain forums, Facebook groups, etc. that may work better for different types of businesses.
From a paid media ads perspective, we want to focus on reach. A Google Display campaign can be a great way to raise awareness in people who might not even know about your brand. You can target Similar Audiences, people who are in-market, or people who are in a certain verticle, to show your ads to.
This can then be followed up in forms of remarketing, for example, if a person has been on your website and then dropped off on a product page, the use of Dynamic Remarketing can showcase that particular product back to them around the Google network, including Youtube and Gmail.
Google Merchant Centre is also a fantastic tool to promote your Black Friday sale. You can show the user four different ways that you are offering promotions. This can be from free delivery, a percentage off, a specific amount off, or a complimentary item/product. You can focus on targeted radiuses, specific countries and set the timescale in which you want to run these promotions.”
Is the goal of Black Friday all about getting sales?
“The goal of Black Friday comes down to your own personal key performance indicators (KPIs). Some businesses may want to focus on customer acquisition, some might use it for maximising profits. Personally, I think you should use the Black Friday period to increase awareness and visibility, whilst maximising sales.
We know for a fact that people are in-market to buy during this period, so your conversion rates will go up, competition will also know this, leading to increases in bids. If you’re not price-competitive, start earlier, because this will enable you to beat some of the competition (50% of Black Friday sales happen… before Black Friday itself.
If you are being price-competitive (one of the things that I’ve noticed over the years of doing this), is that you don’t want to increase your CPC. There is going to be such an increase in demand that you don’t want your budget to be exhausted too quickly.
If you have an unlimited budget, then you can be more aggressive, but in most cases, SME’s don’t have this.
Businesses that want to maximise profit tend to want to achieve really high return on ad spends (ROAS), they may achieve ROAS of 1000, 2000%, but fail to look at the big picture.
If you were to keep your margins at a level you were happy at before the promotional period, but increase spend, you are going to see retention of that spend moving forward, which will then help you to grow.
Our job is to help SME’s scale online, and this is one of the best ways you can do this.”
When do I need to start advertising? Can I make changes on the day?
“Research from Google suggests that searches for Black Friday start from around 11th October and peak on Black Friday (26th November, this year).
If you’re not price-competitive, start your promotions earlier. If you are competitive on price or waiting for your manufacturer or distributor to provide you with those prices, you may have less time to run these sales.
From experience, I’ve found that running a promotion either on a few specific dates or over a two-week period provides the best results. But again, this will depend on if you are selling own-brand products or products from other brands.
In terms of making changes on the day, this should only be done based on performance – if you’re exceeding your targets, you don’t want to be limited by budget. Whereas, if things aren’t working as well as hoped, you want to consider KPIs such as the checkout process, is it easy for customers?
If you’re running out of stock of a certain product, you should pause these campaigns on Google Ads, because you don’t want to waste budget – especially on Search campaigns.
With regards to Shopping campaigns, if your product has run out of stock, it will stop showing on Google (this is nothing to be concerned about) so there will be minimal budget wastage.”
What would you say the best performing businesses have in common?
“They keep it simple.
They have targeted offers on a range of products, they don’t make it convoluted and they make it easy to check out, offering a range of payment options.
Site speed is also a massive factor. If your website is slow, then you’re going to see an increase in bounce rates and a decrease in conversion rates. Making sure your website can deal with the increase in traffic during this period is going to be incredibly important.
They don’t have any hidden catches. They would be very clear on their shipping options, e.g. if it’s free after a certain price. They don’t add any costs on at checkout, so businesses that might be advertising excluding VAT prices, and then they come with a nasty surprise at checkout with the including VAT price, could also lead to an increase in cart abandonment.
In summary, keeping it simple is the best way to make sure you’re being direct with the customer, providing them with what they want, and reducing potential points for them to drop off during the customer decision-making journey.”
What is your number 1 top tip for small businesses on Black Friday?
“You don’t always need to offer a promotion.
This comes back to what I said at the start – your own margins and marketing objectives.
If your margins are too small, don’t offer a sale.
However, if the objective is new customer acquisition (because you know the lifetime value of the customer will be there), then you can offer a sale.
Please don’t fall into the trap of offering a sale for the sake of it!”