Does Black Friday make sense for direct sales?

The sky was a dark grey as I walked my dog along the muddy river bank this morning in driving rain. I was contemplating whether or not ‘Black Friday’ makes sense for those in direct sales, the industry I am professionally involved with.

This American import (the day after the American holiday of Thanksgiving) indicates the beginning of Christmas in earnest for retail. From a business standpoint, I’ve never been big on discount as a way of winning or retaining customers. Giving value add and good customer care has always been my mantra for customer retention. But when it seems the rest of the world is doing a ‘Flash sale’ around this time, you begin to wonder if you are missing out.

So lets get down to numbers …… the majority of our sales team have about 20 regular customers who are buying consumable products on a monthly basis. Depending on their position within the company marketing plan, they make between 35 – 48% profit on sales. So lets assume you do a ‘Black Friday Flash Sale’ to your loyal customer base. 30% or more is not uncommon. If you are more senior you hang on to 18% margin …. but if you are only on 35%, you have just waived goodbye to the majority of your retail income for the entire month, as your regular customers will likely all buy their months supply in the sale period. Worse still, they might buy 2 months supply at the discounted price! For what purpose? It’s a interesting question.

So then I got to thinking, why not use Black Friday as a way to win new customers and try and hook them in with the promise of a 30% discount. You then give them the value add and great customer care and you have expanded your customer base for the future. That makes sense. But something doesn’t sit right. You are rewarding new customers by offering discount, but not rewarding the loyalty of regular customers. This is what most businesses do and what forces us to review our utilities and insurance arrangements every blooming year. I hate it!

As we got to the far end of our river bank walk, we have choice over the route; right for the long walk, left for a short cut home or straight on for a medium sized walk. Max, my chocolate labradoodle who loves his walks but is not a fan of the rain, glanced over his shoulder and opted for the middle path ……. which got me thinking. Is there a middle path to my Black Friday conundrum?

So this is my plan. I offer a modest time limited deal on all products to all new customers. For existing customers, they buy there regular products at normal price, but are offered a modest discount on products they haven’t bought before in an attempt to get them to broaden their spend.

I would love to understand other peoples approach to Black Friday and sales in general, especially those who are part of the  Direct Sales Industry.

Any bargain hunters old or new, please feel free to make contact via email 🙂

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