We’re seeing it everywhere this week. In fact, I think it started weeks ago. Black Friday deals, Black Friday discounts.
It’s no longer just a day either, it seems to go on forever, starting weeks before ‘Black Friday’ and continuing into December.
With so much hype as the day approaches it’s hard not to get swept up in the excitement of it all. But for small businesses, it can feel like there is an enormous pressure to join in – even when it perhaps doesn’t make good business sense.
Where does Black Friday come from?
Traditionally Black Friday was the Friday after Thanksgiving in the US and marked the start of Christmas shopping. It came to the UK around 2010 and has been causing havoc for small businesses ever since.
Large retailers buy products in such huge quantities that they can command the best price when buying wholesale.
When it comes to offloading their stock, they can therefore afford to take a hit on the retail price. For small businesses this is not the case. With smaller margins, these businesses are normally already squeezed for profit. Offering substantial discounts because Black Friday tells you to can be hugely detrimental.
Hold Your Nerve!
As a business owner, it’s really tempting to think about offering deals and discounts for Black Friday.
But our biggest piece of advice to any business owner feeling pressured to cut prices this week is to hold your nerve. Try not to follow the crowds unless you really think your business can take it.
If you’re reading this and thinking but I WANT to offer a deal or discount then below are a few options to consider…
Options for Service Based Businesses
At PPF we are not big believers in discounting services. We always advise clients to add value in other ways instead. So, for service-based businesses we would recommend adding something extra to what you already offer such as an online resource or perhaps giving exclusive access to something useful.
For transparency, yes PPF does have a Black Friday offer… BUT not on our ongoing monthly services. We have packaged a bundle together for a one off service with some added extras that add value and have offered it at a sustainable (for us) discounted rate.
We have done this on a service that we truly believe will help a large number of small businesses including those that may not currently be in a position to work with PPF on a regular/ ongoing basis but that would really benefit from our insight & business knowledge to empower them to grow in 2024.
(If this intrigues you, drop us an email and we’ll share with you the details – hello@pinkpigfinancials.co.uk or check out PPF on Instagram)
Options for Product Based Businesses
For product-based businesses, discounts are expected during Black Friday sales, but it’s crucial to avoid reducing prices to the point of making a loss. Holding stock incurs costs, so use Black Friday to shift old or surplus stock at lower prices. For e-commerce, ensure postage remains at full price to cover expenses.
Here are some ways that you could sustainably offer discounts on your products:
Tiered Discounts: Encourage higher spending with escalating discounts – for instance, 10% off for orders above £50, and 15% off over £100. This strategy boosts sales volume while maintaining profitability.
Bundled Products: Offer product bundles at a slightly reduced rate compared to purchasing items inpidually. This moves more products and introduces customers to additional items.
Loyalty Rewards: Reward returning customers with special discounts or benefits, fostering repeat business and customer loyalty.
Value-Added Offers: Enhance the appeal by including a complimentary gift with purchases over a certain amount, offering high perceived value at a low cost to you.
Exclusive Deals: Offer special discounts to email subscribers or social media followers, aiding in growing your digital presence.
Extended Warranty or Services: Add value through extended services or warranties rather than reducing the product price.
Free Delivery Over a Set Amount: Motivate larger orders by offering free delivery for purchases exceeding a specific threshold.
By adopting these approaches, you can craft attractive Black Friday deals that increase sales and customer satisfaction, all while safeguarding your profit margins.
Don’t devalue your business
By offering too much of a discount, you run the risk of diminishing the quality of your goods and services. You should also make it very clear that this is a limited time offer as otherwise some customers may also then expect the lower price to be honoured at other times.
Not every product or service is right to be discounted for Black Friday and you’re not going to lose business by not offering it. If this is you, and it doesn’t feel right, hold your nerve, ride out the wave, and things will settle again in a few weeks.
Not a Client Yet? Let’s Change That!
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We take the stress out of your accounts, maximise your time, and provide the expert guidance you need to reach your goals.
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