How to Create A Pricing Strategy Around Black Friday
According to the e-commerce analytics team at Adobe Digital Economy Index, customers spent $8.9 billion on Black Friday last year. That's a billion with a B!
What’s more is that for the entire Cyber Week, which runs from Thanksgiving through Cyber Monday, customers spent a total of $33.9 billion online.
Talk about a cash cow!
As a savvy entrepreneur running a product-based business, you need to be tailoring specific pricing strategies for this big shopping event. In this article, I’ll lay out exactly what you need to know on how to create a pricing strategy around Black Friday.
Pricing Strategy
So you’ve already used my handy guide on How to Price Your Products. You know that pricing your products correctly means identifying how much value your products bring to your customers and then setting the price accordingly.
Why do you need to do anything different for Black Friday?
Black Friday means huge opportunities for extra sales and therefore extra revenues. You could do more business on this one day than the whole month of December if you work it right!
Planning out a dedicated pricing strategy for Black Friday can ensure your product-based business doesn't miss out on all those big sales!
Goals: Sales or Profit?
The first step in creating a Black Friday pricing strategy is identifying your goals. A good place to start is whether you want to maximize your sales or your profit.
Sales
The Goal: If you have a product-based business selling things like art prints, do you have a ton of older out-of-season prints laying around? Black Friday is a great time to clear out outdated inventory by adding big discounts to old inventory.
How to Implement: Find the minimum price at which you are willing to sell that old inventory. Make sure it still covers the costs associated to create it while still offering a big discount.
Profit
The Goal: Are you a female entrepreneur with a growing coaching business? You may want to have the goal of maximizing your profits for Black Friday on your hottest products.
How to Implement: Identify the max price your customers are willing to pay for your hot product. Compare your pricing with your competitors’ pricing to get a good benchmark.
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Analysis: Do the Work
After you identify your goals, it’s time to do some work. Analyzing your products, pricing, and sales history will help you configure the best prices for your Black Friday deals.
A good place to start is by running some what-if scenarios. If you have three pricing changes you want to try, forecast out how they will affect your sales and revenues using historical data. This can be a little tricky without the right tools, so be sure to check out my article on How to Create a Forecast Report for Your Business or reach out to me if you need help in this area.
Promo Ideas
Beyond pricing individual products, the add-ons and discounts you offer for Black Friday can also have a huge impact on your sales. Here are some of my top picks for Black Friday promo ideas for product-based businesses.
Up-selling
Up-selling is the act of convincing your customer to purchase the premium version of the product they were originally interested in. The premium product is more expensive, but brings added value and features the base product doesn’t have. Say you are a female entrepreneur with a life coaching business that sells journals. Your base journal may be pre-bound and only have 100 pages. When your customer goes to check out with that journal in their shopping cart, have your website prompt them to check out your premium journal that features 50 more pages and an added sticker pack.
Cross-Selling
Kind of like up-selling, cross-selling prompts your customer to check out your other offers. With cross-selling, though, you are recommending other products to add to their order that are supplementary to the product they are interested in. In our life coaching journal example, have your website offer the customer interested in your basic journal the sticker packs as an add-on.
Bundles
Product-based businesses do really well offering bundles of products on big holiday shopping days. If you are that life coach, run a Black Friday promo where adding the sticker pack to the purchase of a basic journal nets them a sweet discount.
Freebies
You can tempt customers to make purchases by offering freebies on select purchases. If you are a female entrepreneur running a real estate business, offer your customer a free eBook about prepping their home for going on the market. You can offer it as a free add-on when making a purchase or you can offer it for signing up for your email list, whichever is more valuable to your business.
I hope this article got your thoughts churning and gave you some good tips for how to create a pricing strategy around Black Friday.
For more sources for Black Friday stats, check out:
Adobe Digital Economy Index on consumer spending
The Better Bureau Business on small business stats
If you’d like some additional tools for pricing strategies, hit me up for a one-on-one consultation today!
