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Introduction
Black Friday is the e-commerce big league, and we’re here to ensure you’re more than just a player—you’re a winner. Were you already prepared? Perfect. Let’s take it to the next level. This guide is your definitive playbook for maximizing net profit.
Strategies, Analytics, and Actions: Your Black Friday Playbook
The guide follows a goal-oriented approach, with tailored sections to meet specific business objectives.
Optimize Merchandising
Which Product to Promote for Black Friday? (Homepage & Ads)
Context
Promotion isn’t just about quick sales. The real game-changer is long-term profitability and customer loyalty.
Analysis
Calculate each product's LTV net of COGS.
Action
Feature the products with the highest LTV net of COGS on your homepage and ad campaigns.
Pricing & Discounts
Measure the Impact of Discounts
Context
Pricing strategy can make or break your profitability. Discounting can be a double-edged sword—too much can eat into your margins, too little may not entice customers.
Analysis
Examine LTV by customer cohorts using promo codes.
Action
Apply the learnings from your Q1-Q3 best-performing offers to your BFCM discounts.
How Much to Discount?
Context
Don't let aggressive discounting erode your margins.
Analysis
Build a daily P&L to understand your existing margins.
Action:
Use your daily P&L to set a discount level that preserves your margins while attracting customers.
Free Shipping Threshold
Context
Free shipping can incentivize larger purchases, but it needs to be balanced against shipping costs.
Analysis
- Analyze your existing Average Order Value (AOV).
- Calculate the incremental shipping cost.
Action
- Set the free shipping threshold a notch above your existing AOV, keeping your shipping cost in mind.
Cashbacks vs. Discounts: Who Gets a Deal?
Context
Optimizing the type of incentive.
Analysis
Analyze customer responsiveness to both in the past.
Action
Implement the most successful incentive for your BFCM strategy.
Is It In Stock?
Context
Avoid frustrating customers with out-of-stock items.
Analysis & Action
Use hourly tracking of stock levels for featured products to ensure they are available for purchase.
Optimize Spend
Marketing Spend
Context
Your budget is finite, and now is not the time for branding; it's time for conversions.
Analysis
- Examine performance by campaign and associated metrics like CPC, CPM, and conversion rates.
- Adjust the budget allocation based on this analysis.
Action
- Cut loose anything that's not converting—Channel more budget to campaigns that work.
- Set up a CAPI enhancer on Facebook for better visibility and lower costs.
Maximize Revenues
Don't Under-Spend in Marketing
Context
Being too cautious can be as harmful as being reckless.
Analysis
- Evaluate Lifetime Value (LTV) by channel and campaign.
- Set suitable cost-caps and CPA targets based on these LTV metrics.
- Look at the ROAS from the previous periods to understand the surge in returns.
Action
- Align your spend with the channels that bring in high LTV customers.
- Increase bids a day before based on the expected ROAS and Conversion Rate (CVR) increase. This prepares your campaigns for the expected surge in traffic and potential sales.
Ensure All Traffic Sources Are Captured and Evaluated
Context
Not all traffic sources are created equal; some may bring a significantly higher conversion rate than others.
Analysis
Use Google Analytics 4 and Shopify data to look at conversion rates by source.
Consider the volume each source contributes to make the data more actionable
Action
Capture all possible traffic sources.
Prioritize or reallocate resources toward the traffic sources with high conversion rates.
Refine Your Conversion Funnel
Context
Understanding how your customers move through your sales funnel can offer insights into where you might lose them. Fixing these points can directly impact your conversion rate positively.
Analysis
- Use a mix of Shopify, Google Analytics 4, and First-Party Data to examine your funnel conversion by product type.
- Identify bottlenecks or stages where users are dropping off.
Action
Make necessary adjustments to the funnel stages that are underperforming. Whether it's the product description, checkout process, or any other stage, optimize it for better conversion.
Mobile vs Desktop Users
Context
The device used for shopping can significantly impact the user experience and conversion rates.
Analysis
Compare conversion rates, AOV, and bounce rates between mobile and desktop users.
Action
Optimize the website and campaigns for the platform showing better performance or work on improving the weaker one.
Email Segmentation: Who Needs a Discount?
Context
While discounts attract customers, they can also erode profit margins. The key is to offer discounts to those who genuinely need an incentive to convert while retaining the profitability of transactions from customers who don't require discounts.
Analysis
- Use Polar Custom Reports to build a 1-click segmentation of your customer base.
- Evaluate who among your customers are more price-sensitive and who are more inclined to purchase without a discount.
Action
- Create email campaigns targeted at each segment. For price-sensitive customers, offer discounts or special deals.
- For others, focus on value and benefits rather than price reduction.
Comprehensive Flow Performance Review
Context
Knowing how each flow performs will allow you to make real-time adjustments, ensuring that you’re maximizing every touchpoint with your customers.
Analysis
Use Polar Custom Reports to generate a 1-click aggregated report of all your key metrics, from open rates to conversion.
Action
Review the performance of all your email and retargeting flows. Make necessary adjustments to messaging, timing, and frequency based on what the data shows.
Summary
You are now equipped with a comprehensive strategy to maximize your top-line revenue and minimize both marketing and product costs. Go forth and conquer Black Friday 2023. Here is a final checklist over time
Retro-planning
Six Months in Advance
- Demand planning
- Stock orders
- Awareness campaigns
- Test discount options
One Month in Advance
- Set up tracking and attribution tools
- Decide on featured products and discounts
- Evaluate traffic sources
- Plan your creatives
One Week Before
- Set up your campaigns
- Test and fix the funnel
- Set up alerts and store monitoring
- Remove poor-performing campaigns
- Review all flow performance and adjust
- Increase Bids a Day Before
- Avoid Budget Caps
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