Thoughts on Black Friday Pricing
My pricing friend, Courtney Rogers, recently?posted advice?on whether or not to participate in Black Friday.?Her advice is wise.?She articulates that this decision, like all tactics, should align with your company’s strategy, mission, and vision.??
The article prompted me to consider why Black Friday works and which companies should participate.?Since Black Friday was last week, you’ll have to remember this advice for next year, but maybe the thinking will help in some other pricing decisions you need to make.?
First, why does Black Friday even happen??This may be obvious, it is the busiest shopping day of the year.?Most people in the US don’t work on the day after Thanksgiving, and they want to get a start on buying Christmas presents.?From a retailer’s point of view, there is a massive spike in shopping on that day.?They want to get their “fair share” of shoppers.?Maybe they can even get more.?This is one day of the year when they should pull out all of the stops to attract shoppers.?That includes price discounts.?The same goes for the entire month following Thanksgiving but to a slightly lesser degree.
Now, should YOUR company participate in Black Friday sales??Besides Courtney’s advice, here are two other observations.??
First, B2B companies rarely participate.?Why??Possibly because there is not a rush of Christmas shopping by businesses.?The rush comes from consumers shopping for Christmas presents.?Hence, if you’re a B2B business, you probably don’t want to offer deep discounts.??
Second, this makes sense for companies that see a big spike in sales revenue during the holiday season.?Think of these as commonly gifted items.?Of course, we give toys and slippers and clothes as gifts.?(Did anybody enjoy getting socks and underwear for Christmas?)?These are items that are on sale.?But items not heavily dependent on the gift-giving season don’t participate.?Most groceries aren’t discounted (more than usual.)?Netflix doesn’t have Black Friday sales.?If your business is not cyclical, you probably don’t want to behave differently during the holiday.??
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Black Friday is a unique situation.?Like all situations, closely consider the decisions your customers make and the behaviors you expect of your competitors.?That should inform your actions.?Good luck next year!
Now, go make an impact!
And don’t forget to join us for our 2-day interactive pricing workshop in Las Vegas on January 12 and 13!
Chief Marketing & Customer Experience Officer | Business Leader | Communications Specialist | Pricing Professional
2 年Mark Stiving, Ph.D. - Very good thoughts. I spent time at a computer hardware company that sold both B2B and B2C. I was floored at how much goods go out at NEGATIVE margin. The second year, I treated it like a capital expense and surveyed the executive staff for the size of the check we wanted to write. Then, we did the "while supplies last" approach. Sold out by 10AM... thankfully.
Pricing Consultant & Advisor | Helping manufacturers and wholesalers achieve double-digit margin growth by moving focus from price to value | Speaker | Non Executive Director | M&A Optimisation | Transformation | Interim
2 年As ever, great advice from Mark. The key point for me is in the very first paragraph, align pricing actions with strategy, vision and mission. So many businesses I speak with have no clear pricing strategy and often seem to take pricing actions with little alignment (sometimes zero consideration) of the business strategy.
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2 年Black Friday is just one MORE thing you can add to my EVER-lengthening list of reasons why I hate Christmas. The tacky decorations, the ubiquitous bad music, and the deafening commercialism have simply ruined it.
Pricing Expert @ Impact Pricing | Speaker, Author
2 年You can also read the full blog on our website: https://impactpricing.com/blog/thoughts-on-black-friday-pricing/ Splunk Mania Thermo Fisher Scientific TIBCO Thomson Reuters Varian