Should I Offer Black Friday Deals

In this episode of Live with The Pricing lady, I want to talk to

you about whether or not you should be offering black Friday deals.

This is a question I get quite often, and I have very strong feelings

about whether or not small businesses should be getting into this game.

And that's what I'm going to share with you today.

Sit back, relax and enjoy the episode.

Hello, and welcome to Live with The Pricing Lady.

I am Janene your hostess.

This show is all about helping you build a stronger, more profitable

business on your own terms.

We talk about all things, pricing -tactics, and strategies here to help you

build your competence and your confidence when it comes to pricing in your business.

And today we're going to be talking about a very special topic.

This is a question I get so often.

And as I said before, I have very strong opinions about black Friday offers.

And that's what I want to share with you today is help you to

explore and understand whether or not offering black Friday deals is

the right thing for your business.

Before we get into that.

Let me also remind you that my last cohort of 2023 for The Fair Price Formula

is starting at the end of November.

If you'd like to join us, head on over to thepricinglady.com/setmyprices and get

all the details and get registered there.

Now let's get into the show.

It's that time of year we're so many businesses are thinking

about offering black Friday deals.

I even had a web class recently where somebody asked me if I was

going to ask, offer them as well.

It made me realize that I've actually never addressed this topic

in one of my podcast episodes.

I thought, what a perfect time to do it, because I know a lot

of you are thinking about it.

Here's my thing about black Friday deals.

Now, if we look at the industry in which this whole thing started and why it

started, it gives us some of the answers.

They started in the retail industry and me having grown up in the US

and you probably are aware of that, this whole concept came from there.

This was a tactic that was used to get people out of the house on a day

when they're not working at least most people when they're not working

and get them into the shops to get started on their Christmas shopping.

And that was the retail industry's way of really getting people

off the sofa and into the shops.

Now it has expanded and exploded into a global phenomenon.

When I first moved to Switzerland in 2001, they never had anything like

a breakfast black Friday sale here.

Actually in Switzerland until like the last two or three years, they

only had sales two times of year.

In June.

May June time.

And then after Christmas, You know, basically to the middle of January, those

were the only times they ever had sales.

And then.

Either just before or just after COVID hit, we started seeing black Friday sales

here in Switzerland and, and always made me laugh because you know, the concept

compass from something that is totally unrelated to Switzerland in itself.

But yes, we even have them over here in Europe.

And now with the internet, of course, we also have cyber Monday, which is

an online version of black Friday.

And that is also very prominent, not just in north America, but across the globe.

Now, when I think about.

Offering black Friday deals for small businesses.

I start to get a little bit nervous.

You have to remember that these retail shops, they're talking large volumes.

They're also talking about shifting a lot of inventory.

Now that may apply in your small business, but places where I don't

really see it applying as much is in service-based businesses, especially.

I see a lot of coaches and therapists and people offering services who

also offer Black Friday sales.

It makes me wonder.

What's the real business purpose behind that.

And is it really helping their business or not.

Let's look at a few questions that you can be asking yourself so you can decide if

it's the best strategy for your business.

So, first of all, you want to ask yourself, is this aligned with my

brand and the values of my business, but also your personal values.

So some cultures have a deep.

Let's say practice of wheeling and dealing and discounting.

So it may be for your target customer group or part of the world that

you're in that, you know, this is something that is very much aligned

with the values and the practices in your industry or personally for you.

iF you're positioning yourself as a premium brand for something, and

then offering deep discounts on Black Friday, just because it's the

last Friday in November, that it doesn't really make much sense.

From a logical perspective it would actually erode your value perception

as a luxury (premium) brand.

If you're trying to play at the premium or the luxury end of the spectrum you might.

Let me say you might proceed with caution for sure.

If you were trying to decide whether or not to do that if one of your values

is transparency, for example, in your business, and you're transparent with

your prices and then you come along and one random Friday of the year, you

offer a deep discount, then you're kind of getting, telling your customers that

there's actually more profit in there than maybe they thought, and that you can.

No.

And that you're capable of offering that while still making money.

Then they may question the transparency.

So again, this are two examples of what I mean by making sure it's

aligned with your brand and or your business or personal values.

Next.

And you knew this was coming and usually it comes first, but I put

it second here today is who is your target customer right now?

Just because customers want to get a cheaper price.

Does it mean you have to give it to them?

If your target customer is people who are looking for the

lowest offer, the lowest price.

Then it could be beneficial to have a Black Friday sale, especially if

your competition is also offering it.

I'm not saying you should.

I'm just saying you could.

If at the same time, if your customers are looking for something more prestigious or

looking are interested in paying more for something, because sometimes customers

are then, if they're looking really for quality and high quality, then offering

black Fridays discounts actually kind of gives the opposite message of that.

So you might not want to do that.

So have a look at who your target customer is.

If you've developed a bio or an avatar of who they are, I like to

give a target customers and name.

So if we say, you know, what would Steve want or what would Susan want?

Then you can always make the more personal.

And then think about it in the context of how would they perceive that.

Not just that they might be excited about getting a discount, but with

that have an impact on their perception of the value of what your product or

your service or software delivers.

Another reason you might choose to do it is because that's what

your competitors are doing.

But I put a big, big word of caution here about this, because just because

your competition is doing it doesn't mean it's the right thing for you.

Yeah.

So if you're playing in a really cutthroat business, you may choose to do that.

But then you also have to be aware that you may be getting yourself into a price

war situation if you're not careful.

So there are pros and cons to doing that, to following the competition.

If you're the market leader, then in this case, you might be

leading everybody else, right.

With what you're doing.

But it could be an indication that it could be something beneficial to you.

The next thing is it has to make good business sense.

And this is where I see most small businesses, instead of looking at

this from a business perspective, like if I do this, I have the

potential to get this, and I can ensure that I can get this out of it.

If I do X, Y and said, yeah, they don't take the time to really think about it.

They just throw a special offer out there and hope that people will take advantage

of it, but they don't actually know if it makes sense for their business or not.

So a few years ago, I had a client.

She sent me a list to review and it was the discounts that she was

going to offer throughout the year.

And when I first started, you know, to myself, I had a little chuckle

about it because I thought, okay, we haven't even set your price list and

you're already, you know, lowering the prices and offering discounts.

So let's, you know, let's take a look at this.

So when we got on a call, our next call, You know, I asked her, okay,

what's the reason behind these.

And she was like, well, I see everybody else is out there doing this.

And so I thought I need to as well.

And I said, well, what's the business purpose behind it?

What are you trying to achieve by doing it?

And she said, well, I thought, you know, I just pull in a few customers

at different points of the year.

I said, okay.

But, you know, we did our planning with this price.

So now we need to actually adjust our planning to the price that

you're actually going to be selling out a good portion of the time.

At least a weighted average between your list price and the special offer prices.

And when we took a look at that math, it really drove home.

The point that every discount you make has an impact on your profitability.

And that's something that you need to understand as a result of our conversation

and our strategizing and thinking about, does this make good business sense?

She decided to do away with most of them because it wasn't really

going to help her business.

And because it didn't really fit the target customer that she was looking at.

So think about whether or not it makes good business sense.

So those are the four things that I want you to reflect on as you're thinking

about whether or not to do this.

Now, what are good business reasons to do this.

So for example, if you're going to do 50% of your volume through

black Friday sales, then, okay.

Yeah, you could, you kind of got to do that in order to get the volume.

Right.

So if volume, if you're really going to pull in a lot of volume,

then that's a good reason to do it.

If you're going to pull in two or three customers, it's probably not

worth your while, and it's probably business, you would have gotten any how.

And so basically you're just giving money away for free.

Right.

And then it's not such a good decision to do.

If you can sell enough, additional volume with such a discount that you

actually make more profit, then that's another good business reason to do it.

Right.

So.

Again, in order to understand both of these two things, there is one

very critical thing that you need to do, which most people don't do.

And that is if you know me you know what I'm going to say.

Do the math.

That's right.

You have to do the math.

Sit down, do the math and understand what it means for your business.

Now I've got a tool kit, a pricing tool kit on my website.

I'll put the link in the show notes.

And in there is a discount calculator.

And with that, you can very quickly, I mean, within like 30 seconds, understand

how much additional volume you would need to sell with a certain level of discount

in order to break even on gross profit.

And that should be your go-to tool whenever you're

thinking about discounting.

But especially if you're thinking, ah, I'm going to sell more.

And so I'll make more money.

If you're thinking that, then you need to go grab that tool kit

and use that calculator in there.

That's what I wanted to share with you in this episode, let's recap.

If you're considering offering black Friday deals in your business, you

need to treat this like any other decision you're making in your business

as a strategic business decision.

And here are the four questions we said, you should be asking yourself.

First of all, is offering those deals aligned with your brand, your business

values and your personal values.

Second of all, does it fit your target customer and how will

it impact their perception?

Of value.

Third, what are the competition doing?

And just because they're doing it, does that really mean you

should be doing it as well?

And fourth, does this make good business sense?

If you can answer those four questions, it'll help you hone in on whether or

not this is the right decision for you.

But do make sure if you choose to do it, that you sit down and do the math.

That's the last tip for this episode, because the math will help you

understand what it really means for your business and whether or

not it is a good business decision.

I wish you a great day.

If you have any questions at all, you can always reach out to me@thepricinglady.com.

And book a call with me there.

We can talk about what's going on with pricing in your business

and how we might work together.

I wish you all the best.

Have a great day and enjoy pricing, my friend.