Marketing
Black Friday: Taking advantage of high consumer engagement for future wins
Black Friday presents a critical opportunity for brands and retailers to expand their customer base. A key to success is turning Black Friday shoppers into loyal customers with lifetime value.
September 13, 2022 by Michael D. Fisher — CEO, 3radical
Black Friday and Cyber Monday are key dates in the diary for most U.S. and U.K. businesses and a great time to attract new customers and drive sales.
However, while many brands push for short-term revenue, they could miss the chance to engage value-focused shoppers and turn them into repeat customers with higher lifetime value.
Customers are not just for Black Friday
According to Shopify, 64% of retailers say the customers acquired over the Black Friday weekend have a lower lifetime value than customers acquired at any other time of the year. This perhaps is unsurprising.
Most brands will have ambitious KPIs and targets focused on new acquisitions or total revenue with little thought to retaining those new customers after the weekend is over.
For any brand thinking about long-term revenue, customer retention should be a priority focus. Research shows the likelihood of a future repeat purchase increases every time a customer shops with a brand, from 17% after one purchase to 52% after six transactions. Therefore, any budget spent fostering new acquisitions and encouraging them along the customer journey will likely lead to a much more effective ROAS. Especially with the cost of acquisition skyrocketing since the pandemic.
Bypassing buyer's remorse
It's also true that becoming too focused on the hard sell and short-term wins can invite risk.
The higher traffic over the Black Friday weekend makes it harder for brands to provide the same high-quality customer experience and service. According to PwC, 32% of customers would stop doing business with a brand they loved after only one bad experience. Being too focused on those short-term wins can potentially reap long-term losses.
And the short-term wins are also becoming shorter than anticipated with the rise of Returns Thursday. This is the Thursday after Cyber Monday when consumers are most likely to return their impulse purchases. IMGR reports one in three U.K. shoppers return what they buy on Black Friday. This is not only a reduction in revenue but could also cost businesses twice the price of delivery to return the product into the supply chain.
How to keep your Black Friday customers coming back
With the acquisition costs rising, Black Friday presents a vast opportunity to engage new customers. These three quick tips will help foster brand loyalty for Black Friday and beyond:
Change your KPIs
If a brand's key success metric for their Black Friday campaign is Return on Ad Spend or total revenue, then this is what the sales and marketing teams will focus on. However, to make a shift in mindset stick, brands can't just pay lip service to lifetime value; they must officially make it the core aim of the campaign.
Black Friday is also a solid opportunity to consider and prioritize customer reactivation metrics. For example, people already familiar with the brand will likely become regular buyers more than first-time purchasers.
Consider motivations and needs
Over the Black Friday weekend, it's more important than ever to take the time to find out more about your customers. Returns Thursday shows that pushing hard-sell tactics to drive Black Friday sales doesn't work in the long run. Instead, those items will come right back to the business. Only by genuinely solving a need will brands make the purchase stick.
"1 in every 3 shoppers return what they buy on Black Friday, with approximately 30 million unwanted goods being sent back to stores."
– IMRG, The UK eCommerce Association
By discovering customer motivation and intent, brands will gain valuable customer insight. For example, why are customers deciding to try the brand now? Are the products out of the customer's budget, or are the risks lower at a discounted price? Knowing this level of insight is critical to maximizing customer lifetime value.
Let customers control their preferences
3radical research shows 92% of consumers are willing to provide their data in exchange for discounts and offers. So Black Friday is an excellent opportunity to learn more about your customers — but that doesn't mean brands should push it too far. It won't last long if brands don't respect customers' data at this early relationship stage.
Brands should allow customers to control their marketing preferences easily. By allowing them to select the platforms, content, and frequency of communications, brands know how best to target each audience member. As a result, customers will be more engaged with the marketing messages they receive because it arrives on their terms.
Conclusion
Undoubtedly, Black Friday presents a critical opportunity for brands and businesses to expand their customer base.
However, chasing short-term wins can lead to long-term losses. Instead, there is a more significant opportunity to drive revenue for the present and future — turning Black Friday shoppers into loyal customers with lifetime value.
About Michael D. Fisher
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