Well, it happened again.
The annual consumerist bacchanalia of consumption has come and gone, undoubtedly leaving large numbers of casualties in the form of ruined electronics and broken toys in its wake. But as we (often quite literally) pick up the pieces and settle in for the real swing of the holiday season, it’s worth considering: what lessons can we learn from this annual frenzy?
Because there’s actually quite a lot.
1. Stay Out of Crowded Spaces
The unofficial start of the holiday rush, Black Friday took shape as companies jockeyed for Christmas shoppers. The competition got heated as the day developed a reputation for being the “biggest sales day of the year,” with stores opening earlier and earlier and earlier before finally actually starting their sales on Thanksgiving itself.
It got a little crazy, but it did that because stores all across the United States were trying to occupy and own a single space. The resulting contest for customers became legendarily ridiculous, as companies poured more and more and more resources into encouraging (and then coping with) a massive rush – which hasn’t actually translated into profitability, as deeper and deeper sales essentially encourage customers to do their holiday shopping both when prices are at their lowest and when overhead is at its highest.
Highly-competitive segments are often the least profitable because it turns into a buyer’s market, driving prices down as people try to snipe each other’s business. It’s a losing proposition.
Instead, businesses should be trying to reach and corner niche markets where demand is high but supply is low. Everyone trying to seize the same customers means that nobody gets to control their message, and all they can do is blare out “LOW LOW PRICES.” If you want to actually make money, skip the rush, and focus your resources where they’ll do you more (and longer-term) good.
2. Cultivate Loyal Customers
A side effect of Black Friday and Cyber Monday is the encouragement of a mercenary kind of customer; instead of building loyalty, you get the dash-and-grab lot, after the best deals and nothing more. They’ll stick with you as long as your prices are low – and vanish the second the money they save is greater than the cost of driving across town to make the purchase. That value calculus means you’re not building any of the foundations of long-term business health, and forces your company back into the month-to-month cashflow crawl, where you’re reduced to begging for business instead of building a loyal customer base that comes back to you no matter what.
And of course you are. You’re encouraging the wrong customers to do business with you in unsustainable ways. They aren’t coming to you for any of the real value that you bring to the table; they’re just after the lowest price. But you want the kinds of customers who won’t drop you like a sack of bricks the moment it’s convenient.
That’s why it’s important not to compromise on price, but instead to ensure high value for the money in every aspect of the customer experience, including post-purchase care and support. You need to build your marketing efforts around being client-centric instead of having “the lowest prices out there,” communicating clear value and keeping your customers engaged over time.
This can mean lots of things; it can mean you’ve built a truly delightful Twitter feed. It can mean you personally reach out to customers after sale. It can mean you have an absolutely unrestricted return policy that demonstrates your confidence in your product – and gets them back into your store. But what it can’t mean is “all we want are value shoppers.”
Because when that’s all you want, that’s all you get.
3. Urgency Works
Alright, so I’ve been talking a lot of smack about Black Friday and Cyber Monday for the last several hundred words, but they do get one major thing right: urgency really does work. In Black Friday’s case it works a little too well – shunting off the best sales into one major day causes all these other structural problems as we’ve discussed – but creating a sense of urgency in your marketing clearly does impel action. Limited-time offers, flash sales – these things are huge pushes that can get customers off their butts and compel them to making a buying decision.
People dither. People love to dither. “Is it worth it? Is this the best use of my money? I really want it but…” Simply saying that an offer will be off the table, reminding them that a failure to take action will cost them money if they do decide to purchase later, can help them get off the fence.
And it works. Creating a sense of urgency in an email subject line, for example, can lead to a 22% higher open rate. It’s a little bit of a brain hack; urgency causes us to act a bit more impulsively, to be less considered, basically to make a decision one way or the other – and usually in favor of taking the deal.
In other words, the one thing Black Friday gets right is also easy to replicate and incredibly effective. And you don’t have to make people camp out in the freezing cold to make it work.
Black Friday isn’t a crowning achievement of American culture, but there is definitely a lot we can learn from it, if just as a cautionary tale. Building sustainable business practices can drive real, long-term growth for your company rather than keeping you addicted to short-term cash flows and crowded rush-based revenue strategies.