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It’s the most wonderful time of the year… for sales, for cheer, and sometimes also for stress. If you work in DTC, you’re well-aware that we’re entering the busiest (and hopefully most profitable) period of the year. Being prepared is the secret to staying ahead of the game, and if you’re like a lot of brands, you’ve had your plan ready to tackle Black Friday Cyber Monday (BFCM) for months.
If you haven’t, trust us - you’re not alone. There’s still time to get some key parts of your business ready to grab a slice of the BFCM pie!
In this article, we’ll discuss:
So, read on and keep the Tums close.
While the retail environment (and economy as a whole) has been a little chaotic, we still expect BFCM 2023 to be the biggest on record.
The last few years have been up-and-down due to the COVID-19 pandemic followed by supply-chain issues, and now inflation has entered the chat.
In 2022, US online retail consumers spent a record $9.12 billion on Black Friday, which was up 2.3% compared to 2021.
When the effects of inflation were first felt last year, consumers were looking for deals and happy to participate in BFCM sales. Now that we’re used to being hurt by the economy, it’s likely customers will be seeking out deals wherever possible. According to Nosto, BFCM 2023 is expected to hit $21.36 billion in sales.
As DTC business owners, it’s important to ensure you’re participating in this event so you don’t leave sales on the table.
So, how do you make sure your DTC business is ready to rake in some sales during the biggest shopping event of the year?
Triple Whale Product Manager Logan Brown is sharing some specific and actionable tips for you to own BFCM this year:
Just how much does it cost to acquire a new customer? BFCM is a competitive time to spend money on new customers, but if you set up your sales with a healthy understanding of how much your products cost, variable expenses, and desired contribution margin, you can win the marketing game.
New Customer Cost Per Acquisition = nCPA = Total Ad Spend / Count of New Customers Acquired in Time Frame
Here’s how you determine your nCPA target:
If Chubbies Shorts were running a BFCM offer where you get 30% off when you buy any two shorts, this is how it would break down:
Discounts: $47.70
Estimated Shipping: $8
Pick/Pack Estimate: $2.50
Transaction fee estimate: $2.78 (assuming 2.5%)
Returns: $5.56 (assuming 5% returns)
Total: $66.54
How much does Chubbies stand to make in this hypothetical calculation if they run this promotion?
$159 (gross value) - $66.54 (expenses) - $39.75 (COGS) = $52.91
How much do you want to spend on advertising?
Scenario 1 (Positive Contribution Margin):
In this scenario, Chubbies aims for a 15-20% contribution margin, which sets the target nCPA between $20-30.
Scenario 2 (Break-Even):
If they’re spending $52.91 on advertising for each new customer order, that means they’re breaking even.
Scenario 3 (Negative Contribution Margin):
Sometimes, a company may choose to employ a negative contribution margin on the first customer order with the goal of making profit on the 60-90 day lifetime value (LTV).
In this case, Chubbies may know that on average, every new customer returns an additional 20-30% on top of their original average order value (AOV) within the first 90 days. If they choose to lose more money on the initial order to bring new customers into the ecosystem then lean on their retention marketers to bring them profit on those customers in the following 90 days, it just might work out!
There’s nothing quite as annoying as receiving countless emails from DTC companies with the same sale offer that you already purchased. Logan suggests it is wise to exclude subscribers that have already purchased during the promotion period from about 90% of what you send during that time.
In Klaviyo, build a segment where the action = “placed an order”, AFTER, [insert date your promotion started]. Then, add this segment to the “exclude” section of your email campaigns. Another bonus is that the segment will automatically update with anyone who fits the criteria, so you can set it and forget it during this busy time.
Just make sure you include them if you’re sending a brand new offer they haven’t seen yet or if you’re sending an important update regarding inventory or shipping timelines.
Here’s something very important you’ll want to set up before your BFCM sales begin. Whenever you run big promotions, you’ll inevitably bring customers into your ecosystem that aren’t really your customers - they’re just buying gifts for your real customers.
To make sure you understand which customers are gifters, set up a Post-Purchase Survey that asks: “who are you buying for?” Then, you can store that data in either Klaviyo or Triple Whale to build a segment of customers who purchased for a friend, spouse, boyfriend, or girlfriend.
When you set up your marketing efforts for 2024, you can differentiate messaging for these folks as they won’t engage with your brand like the true consumer (the person who received the gift). However, you can still target them at key buying times like Valentine’s Day, Father’s Day, Mother’s Day, or whichever holiday is most appropriate for your brand/who made that initial purchase. Take a look at this blog to get a deeper understanding about why post-purchase surveys are so important.
There’s no bigger let-down than clicking on an ad for a sale and seeing “sold out” on the item you were hoping to score! By using the Product Analytics feature in Triple Whale, you can ensure you’ve got enough stock to support the promotions. If your best-selling size/color of a T-shirt sells out, performance for that page or promoting it could hurt your conversions.
With Product Analytics, you have access to a robust array of real-time KPIs for every product and variant. Additionally, you can see which ads drove sales of each product, which can help you to iterate and improve on your ads, or decide which ones to keep running or put a stop to.
When sales start rolling in, you’ll want to keep a close look on your ad performance, inventory levels, and make sure everything is running smoothly. One great place to keep a look at it all is Triple Whale’s Pixel Page. Here are a few ways to set up your Pixel view for optimal tracking during BFCM:
Time Frame: select today to measure real-time performance. Since Triple Whale syncs with our connected platforms approximately every 15 seconds, it’s the closest to real-time possible!
Click Date: With Click Date selected, you’ll be able to judge the immediacy of your performance by adding this additional qualifier: an individual must not only purchase during the selected time frame, but also click on an ad. For example, all purchases in the example below are from customers who both clicked on an ad and purchased today.
First Click: This model shows us which platform was responsible for driving a customer to your site. For example, if they click on a Facebook ad then later Google the website, Facebook would get the credit. When it comes to prospecting (and paid ad campaigns), the First Click model gives great insights into which platforms are driving awareness (and later conversions).
Most of us know how to deal with stress by now (or, perhaps, you’re used to running on straight cortisol. It’s not recommended, but I’m familiar with it). The final thing to consider here is how all of this affects you personally, which the retail machine doesn’t really care about. However, you should give self-care a little consideration if you plan to keep your body for the long haul.
Here are some tips for taking care of your sanity:
Self-explanatory, but it’s important to spend some time unchained from your desk. There’s a world outside, and you could probably benefit from a little Vitamin D and sun exposure.
It’s very easy to forget you have a life outside of your DTC business, but chances are there’s a friend waiting to grab a coffee or cocktail. As a busy business owner, your calendar is likely overloaded. Make it a point to set aside a few time slots for recharging your social battery. Bonus points if you also get a little exercise in!
With the app on your phone, you can keep the quick details about your business performance right at your fingertips. This also makes it easy to make quick changes as necessary. And anything that makes business easier makes life easier. Search for Triple Whale in the Apple App Store or Google Play Store to get it on your device!
The benefits of meditation are plenty! Once thought to be a practice only attainable by hiding out in a monastery, apps like Calm and Headspace have made a mindfulness practice more accessible than ever. Schedule in 5-10 minutes per day where you’re not looking at your sales, and your brain will thank you!
Don’t skip out on sleep, it’s truly where your body repairs itself. And a great breakfast is the first thing you should do in the morning to get the day going!
Let good people do good work. If you’re a one-person show, see above (give yourself a break). If you’ve got a full team, delegate appropriately and let them do their jobs.
Are you ready to take BFCM by storm?
When we look at previous years, we know that even with economic instability of 2023 that we’re still going to see a record year for BFCM. With the tips from Logan outlined above, you can be sure you’re making the most of your marketing efforts.
It will be busy, but if you use the tips for how to stay calm, you can be ahead of the game!
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