It’s that time of year again. Enormous sales banners are hastily plastered all over the high street shopfronts, promotional emails flood your inbox, and websites become a mismatched collection of aggressive pop-ups. These days, it’s almost impossible to escape the madness of all those tempting Black Friday Sales.
While it’s obviously a great luxury as a consumer, it does raise questions about what impact this has on sales and whether it’s a viable marketing strategy for businesses. Oftentimes, it leads to a blurry line between incentivising new customers and devaluing your products to existing customers. In this blog, we’ll look at the implications of Black Friday on consumer psychology and how you can use this (or not) to your advantage.
Don’t devalue your brand or product for a quick sale
The psychology behind what people value is a strange thing. It’s not built on quantifiable metrics, but cost does play into it. People seem to value a premium product more purely because it’s a premium product.
What a strange, circular, and almost illogical way to think. It’s essentially saying: “I like this thing a lot, but the real reason I like it so much is because whoever made the product told me that’s what it’s worth.” And, to a certain degree, this does form the backbone of our consumer culture.
If everything was sold for what it was objectively worth, and not for its value, none of us would be making any profit. Moreover, it’s the very same reason that a Picasso painting sells for millions, while your toddler’s masterpiece is stuck on your fridge door (even though they definitely share some inherent stylistic similarities).
We attach value to things based on how valuable we perceive them to be. And it just so happens that monetary value weighs heavily in these considerations. The quality of components and materials are nothing compared to the emotional value we attach to it. Just look at all the extortionate vintage and antique equipment and furniture out there.
You set the tone when you price your products. Don’t give your customers reason to devalue your product, as it will turn them away forever.
How do you promote good consumer behaviour?
This is a crucial but also difficult question for most businesses. Do you want to attract a bargain-hunting Black Friday shopper looking for a last-minute steal or do you want to nurture a customer and build a lasting relationship with them? If the latter sounds like you, then maybe skip all the Black Friday malarkey and focus on setting up a marketing campaign that gets you qualified leads.
The last thing you want is to incentivise consumers to wait for big sales. You want them to buy your product because they NEED it, then and there.
“I’ll just wait for the Black Friday Sale,” means less profits for you and it promotes lazy consumer behaviour. The worrying thing is that people are creatures of habit. If they see something and they know they can get cheaper by simply waiting, they will. Every single time.
It’s even been proven to work adversely when it comes to promoting brand loyalty. According to Shopify, “64% of retailers reported that shoppers acquired during Black Friday and Cyber Monday have a lower lifetime value than shoppers acquired at any other time of the year.”
It’s similar to the Groupon effect – where customers come to your business only because there’s a deal on and then continue to shop elsewhere. While you may get a quick sale, you’ve lost a potential customer for life.
The simplest way to negate this is to focus on adding value, instead of subtracting costs. You end up making a good margin and your customer grabs a better deal. Everyone’s a winner.
Differentiate between existing customers and new customers
My last point is a subtle, yet vital one. Offering value to existing customers is completely different from lowering your product in price (and more importantly in value) to a new customer you haven’t engaged with yet. Furthermore, what does that “50% off” say to the customer that just bought your product a month earlier? While it doesn’t state it explicitly, it does communicate that they either overpaid for a product that isn’t worth as much, or that your Black Friday customer is underpaying for a product that you are still making a healthy margin on. Either way, it doesn’t promote the exclusivity that you probably want to attach to your brand. And, let’s face it – if your margin wasn’t at least 10%, you probably wouldn’t bother with your sales promotion.
Each strategy has its advantages and disadvantages. The important thing to remember is that your business is unique. Participating in Black Friday by default, just because everybody else does, might not always be the right way to market your product and your brand. But if it is – make sure you do it right, and plan well in advance.
What are your thoughts on Black Friday? Let us know what you think.