2021 has been another year of flux and change: we started out with hope that we’d be back to “normal” and COVID-19 behind us thanks to the rollout of vaccines, but we’re not quite there yet. The world has opened up a little, but normality seems far from restored – and it’s a possibility that the normality we remember might not fully be back any time soon.
This change is even more apparent in the WordPress and WooCommerce space: while we’ve seen some fluctuations over the last 18-24 months, growth remains unstoppable as the importance of eCommerce sites continues increasing in this new world. We’ve also seen a number of huge acquisitions which have shaken the foundations of our industry. These are all leading to new ways of thinking about WordPress.
This brings us to the second Black Friday to happen during the pandemic: November 26th 2021 is coming up fast! Our most important advice this year remains: pay close attention to the detail and plan ahead.
Black Friday is the one time of the year where potential customers go looking for products to buy. Some of those purchases will be planned, but many will be impulsive. There’s thus an extremely high ceiling on Black Friday for WordPress businesses: we think a good sale can capture 2x typical monthly revenue.
In this post we’ll look at what constitutes a good sale, and how to make it happen. We’ve got five basic rules to get you started:
- You don’t have to do a sale, but you probably should
- Start from your year-round pricing first
- Design your Black Friday pricing for maximum impact
- Don’t forget your current customers
- Get your communications plan set up
Let’s break each of these down.
You don’t have to, but you probably should
The post Alex wrote in 2020 discussed in detail why you shouldn’t necessarily have to do a sale for Black Friday. A Black Friday sale could:
- Undermine the long-term value perception of your product by enabling customers to think “I’ve seen it significantly cheaper, so why should I ever pay full price for it?”
- Serve to punish your most loyal customers who have always been willing to pay for your product.
If you do more sales periods throughout the year, these two issues can become even more pronounced: too many discounts can signal to customers that your product isn’t worth it and significantly reduce confidence. That spells disaster! Here’s Jack from WP Fusion, speaking for our last post about why they only do Black Friday as their sale every year:
Black Friday does well for us because we don’t have any other sales throughout the year.
I know some people do a February sale and/or a midsummer sale to get through seasonal lulls. It’s a lot of work to be running promotions all the time so I prefer to just get it out of the way in one go. It does make our November look very strong, but possibly at the expense of a slow February / June.Jack Arturo • Founder, WP Fusion
You also need to take into consideration what kind of WordPress product you sell. If your plugin is more of a B2B solution, there’s a strong chance that your customer’s purchase decisions are never going to be based on impulse. A discount won’t make them decide to buy your product any more than they would at any given point throughout the year. Doing a Black Friday discount might be a waste of your time.
Usually, products that sell closer to a B2C model, with an average order value of around $100, are a better fit for a sale than those with more of a B2B model with an average order value of $250+. But – even for “bad fit” products, the advantages of doing a Black Friday sale outweigh the risks.
Typically, sales dip at the start of the year but tend to climb throughout the year to a November peak. We see this across the industry; you may as well take advantage of this with a sale:
We’ve seen businesses whose yearly results double thanks to this: getting the sale done right can make the whole difference between growth and decline. A good Black Friday sale:
- Will deliver about 2x the average monthly revenue for the year
- Doesn’t have to reduce your Average Order Value because of the discount
- Can actually help you significantly grow your business in the long term
Here’s how you can kick off your planning.
Start from your year-round pricing first
A key factor at Black Friday is the price and discount combination. By the time we get to Black Friday, your hands are fairly tied on discount level – but beforehand, there’s time to get your prices right.
You almost certainly want to price your products at the profit maximising point: the sweet spot between profit and quantity of sales. This probably means putting your prices up.
Getting your prices up before Black Friday puts a sale in context: obviously, discounting from a higher price lets you get a higher average order value at Black Friday.
The first step, therefore, is to look at your pricing and truly understand if it’s at its best. Here are a few questions you should ask:
- Do I know exactly the value all my paying customers are extracting from my plugin?
- Have I designed my tiers to relate to the different profiles of customers who buy my product?
- Would higher pricing mean less overall volume but more revenue due to the type of customer it will attract?
To understand the value of your product, it’s good to discover all of its possible uses: are the outcomes customers are achieving with your product extremely valuable? Does that mean they’d be willing to pay more for it while still being really happy with it? Answering this is key to understanding whether you’re pricing it right.
Tiers are also an important ingredient of a healthy pricing model: many WordPress products tend to tier only according to the amount of sites a plugin can be installed on. This is generally a mistake: customers either need that amount of sites, or they don’t. Tiering a paid product properly, on the other hand, gives you the ability to grow with your clients.
Getting it priced right is the ultimate target: you don’t want to scare away potential customers, but you do want to make sure your tiers are priced at what they’re worth. Cheaper isn’t better here: it’s better to have fewer customers on the top tiers who are happy to pay significantly more, than a large volume of customers who bought the top tier for its affordability but will never make full use of the full product.
There’s of course more nuance than this to getting your pricing right as each WordPress business is different: the above are good guidelines to how you can start tackling this. Once you’re confident with your year-round results being at their best, it’s time to move to Black Friday pricing itself.
Design your Black Friday pricing for maximum impact
To start off, I want to repeat a sentence from above: cheaper isn’t necessarily better. The first thing to take into consideration is how much of a discount you’re going to give: too little, and it might not be enough to persuade clients to purchase; too much, and you’ll get the sales but lose the AOV, revenue potential and compromise your product’s value perception.
30% is the smallest big discount and should be your default discount level. This chart of discount levels offered by WordPress products in previous years shows the market agrees:
As we’ve said before, though, it’s usually not enough to just slap on a discount level: the most important trick is how you are going to package your sale.
If you have multiple products, one idea to explore here is to consider creating bundles exclusive to Black Friday. Creating a package of products or add-ons to be sold together at a discount can be more effective than giving a 30% discount on individual products, and help you protect your AOV and overall revenue.
Should you have a single product, however, slapping on a discount may be the only thing you can do, although there are multiple ways of executing it which could make the sale more effective, including:
- An extra “launch discount” to claw back non-renewing clients: consider offering an extra % to customers with expired licenses. An extra $10 off for the first 100 customers is an excellent incentive as it adds urgency and scarcity.
- A lower perpetual discount to attract longer-term purchases: an interesting experiment we’ve seen is where customers are offered a 10 or 15% discount instead, but one they can keep for every renewal, rather than just for the first year.
Another idea is to discount lifetime licenses if you have them available throughout the year, or make them available exclusively for Black Friday. Due to their higher perceived value, a discount on a lifetime price can bring their price to a level which raises your AOV, delivers high revenue return, and protects your product’s value perception. Do ensure that the starting (non-discounted) price of such licences is at least three times that of yearly renewable: that means that a 30% discount would mean the price is roughly double what you would usually charge for a year, which is good value all round for Black Friday.
Here’s Katie Keith from Barn2 about the impact of discounting lifetime licenses:
During our 2020 Black Friday sale, we offered a 30% discount on both lifetime and annual licenses. Normally, 5.5% of our sales are lifetime licenses: this increased to 23% during the Black Friday sale period, so customers were obviously attracted to the cheap lifetime deal.
Of course, there’s a risk that discounted lifetime sales won’t be profitable for us because the customers may require support over a long period, while having paid a smaller amount for the plugin. However, I believe that discounting lifetime licenses is still worthwhile because statistically, people who purchase an annual license during the Black Friday sale are less likely to renew than customers who purchase at other times of year.
Our Year 1 renewal rate is normally about 48%, and this decreases to 34% for customers who bought during the Black Friday sale. If these customers do renew, then a lot of them cancel their subscription and re-purchase the plugin each year during the sale.Katie Keith • Co-founder, Barn2
Don’t forget your current customers!
This all raises a question which must be central to your plans: how do you keep your current customers happy? There are a couple of different segments to take into consideration here:
- Customers who paid full price in the weeks leading up to Black Friday
- Customers who have renewed regularly for the last few years
- Customers who joined last Black Friday
Customers who have paid full price in the weeks leading up to Black Friday may feel like they should have postponed their purchase. Two ideas here: you could offer pro rata discounts to customers who contact you about this, or consider being proactive and offering further value from their investment by way of a special upgrade deal at a great price. This helps you keep them happy as well as gives you the potential to unlock even more revenue from them, so it’s a win-win situation.
Loyal, regularly-renewing customers may be a little more tricky: some may be approaching the end of their lifetime as customers, and may have already taken many of your previous offers up. The solution here could be to create tailored bundles or even exclusive lifetime upgrades, to help you retain them and unlock the remaining revenue potential you can.
Customers who purchased last Black Friday are particularly interesting: they’re up for their first full-price renewal. We’ve seen that renewal rates here tend to be lower than the usual average: this could be because they’re not willing to pay in full for the perceived value they have of the product. You could therefore consider a “conciliatory” offer to these customers to help them renew, including:
- Cancellation offer: this could be a popup offer which appears when a customer confirms they will cancel their licence (e.g. by removing their credit card details), offering them a one-time discount.
- Lock in their discounts: similar to the offer outlined above, give these customers the opportunity to lock in a perpetual 10 or 15% off. This can be done either when they try to cancel, or proactively if you can identify that usage patterns look like they might not renew.
These ideas could help you “reanimate” customers who are otherwise at higher risk of being lost due to your Black Friday offers.
Let’s move on to the final part: communicating your sale.
Tell the world about your sale, quickly
Once you have your pricing in place, it’s time to let everyone know about it! There are a number of phases to distributing the sale, as outlined in last year’s article:
- The Build Up: this is the phase leading up to the big sale, and your communications here should focus on reminding potential buyers of your brand and telling them you’re working on great things for this year
- The Craze: this is the period where you make the offer public and start pushing it hard to close as many sales as you can through all the channels you can manage
- The Last Call: this is the very last days of the sale, where you use your channels to remind customers who are still thinking about it that the sale is about to end permanently
This leads us to an important point about when to start the sale: every year, we find more sales starting earlier and earlier. The best practice is to start a week before Black Friday and end on Cyber Monday. This keeps the sale concentrated around the most important period, and gives it a strong deadline visitors know they need to take action by. Make sure the end date is clear from the beginning and make good use of clear countdown timers in your communications, to give enough time for decision-making to take place but also add a sense of urgency which can help push the decision.
Next, make sure you make use of all the channels available to make your sale known! This includes;
- Your website itself: make sure visitors are fully aware of the sale in every step of the journey through your site, including your homepage, pricing page, and blog.
- Social media: post your sale to Twitter, Facebook, and any other medium you have following on. Make sure you add reminders throughout the week, and use blog posts to make the content more relevant and informative.
- Emails to your lists: whether this is current customers or leads you may have, make best use of these lists throughout Black Friday week as they are the “lowest-hanging fruit” available to you and the ones most likely to convert. Make sure you’ve segmented them properly in advance to guarantee relevance of your messaging and effectiveness, and send the right volume of emails to help you cut through the noise.
- Round-ups: Black Friday round-ups are becoming more widespread each year, and more and more websites and Facebook Groups are creating lists of what’s available, usually updated throughout the whole period. Make sure you research these in advance and inform them of your sale to get maximum coverage possible.
At the end of the week, don’t forget to make a final call! It’s good practice to remind visitors to your sale who may not have converted that the sale is closing and the price will not be available again: this helps push the final few conversions over the line and can deliver a good uplift in sales at the end of the period.
Do what you can to collect information and leads about interested visitors who have not converted throughout the week so you can target them with priority: we’ve also seen clients retarget visitors across display media for the final two days to help add more reminders across channels, which could give you a few more conversions towards the end.
Black Friday starts now
All this should emphasise the point made at the beginning: the time to start your work on Black Friday is right now. Let’s look at what steps you should take as soon as possible:
- Make the decision on whether you’ll go for it or not this year
- Analyse your pricing performance throughout the whole year and decide on whether it’s time for a tune-up in the medium term
- Create the right sales packages for all your customer segments, and identify the right amount of discount which makes most sense without throwing away too much value
- Start working on your distribution plans to make as many people as you can aware of your sale
If you need support in making it happen, we’re here to help. Whether you just need help with your pricing and product design, or would like us to take care of your email and blog content, we’ve got your back. We’d love to work with you!