How Europe’s Startups Can Avoid The Black Friday Blues

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Guy Marson, founder of data science and intelligence marketing company Profusion, discusses whether startups should take part in Black Friday and how they can tell if it’s worth their resources.

Black Friday has well and truly reached European shores this year, with the Adobe Digital Insights report stating it will be a peak sales day across much of Europe. With some countries reporting 187% growth in sales from 2013 to present on Black Friday, a staggering £3.3 billion spent in the UK and $4.45 billion spent in the US, you can see why many businesses would be tempted to get a piece of the action.

In all the excitement these events tend to incite, however, it’s essential not to lose track of what really matters – your profit. This is especially true for startups, who historically suffer from tight resources and marketing budgets. To really benefit from Black Friday, all startups must take a step back and ask whether taking part in Black Friday is real value for money.

Should Startups Compete With Huge Businesses?

Black Friday may be high profile, but it is also largely dominated by huge businesses like Amazon and eBay. For startups, getting your voice heard over the noise created by these large companies can be next to impossible during Black Friday. While there is potential to increase brand awareness and get some much-desired media coverage through the event, the majority of this will be eaten up by the Amazons and eBays taking part in Black Friday.

It’s not all bad news, however, if they play their cards right, startups can find Black Friday to be a valuable part of their sales and marketing efforts. Before participating in any kind of promotion, especially one as new to the market as Black Friday, it is important not to just dive in headfirst and go on instinct – something many startup leaders can be guilty of.

It is only through collecting and analysing data that you can accurately place ROI on your Black Friday efforts. Every business is sat on a potential mountain of data. It is vital that you collect your social media, marketing and sales data and store it in a format where it can be easily compared and analysed. Once all your data is collected, through sources like Twitter and Facebook analytics, email marketing platforms and your website, and put into the right format, you can then set about analysing it. The insights you gain from this analysis will tell you whether Black Friday is right for your business.

Focusing On Customers Rather Than Sales

Obviously Black Friday provides businesses with revenue when they participate, but there is also potential for companies to attract new customers through the event. Giving exclusive discounts to current customers in the style of Amazon Prime is another tactic startups could use to increase loyalty.

Up until now, customer loyalty and brand awareness have been largely unquantifiable areas. To measure consumer awareness of your business, you can analyse sales data, e-commerce behaviour, marketing engagement and social media to see who is interacting with your company and talking about you online. Combining this data with contact centre and review data can indicate what your customers feel about your business, and these insights can be tracked over time.

Indeed, with one-off events like Black Friday, it’s essential not to just use data from that limited time period. The real value comes from seeing what’s normal for your business in terms of customer engagement, sales and feelings towards your company, then comparing this with what happens when you take part in Black Friday.

If you see customer sentiment and reviews become more positive after an event like Black Friday, you can say that the event has had a good impact on customer loyalty. The opposite is true if reviews and responses take on a negative tone – you may need to consider changing your promotions or not taking part in the future.

It’s Just One Of 365 Days

Another factor to consider is the potential effect Black Friday promotions could have on your sales throughout the rest of the year. Many customers use Black Friday to get some bargains for Christmas presents, and this will obviously take away from your pre-Christmas revenue. Likewise, many impulse buys through Black Friday could be returned, costing you money in logistics and making you lose out in potential sales if an item is out of stock. Tracking sales and revenue data over time will help you assess whether this could be a problem for your business.

Ultimately, like many promotions, you cannot really tell if something is a bargain without looking at the numbers. Before taking part in any promotion like Black Friday, especially when it is new to your business and new to the market, it is essential to take a look at the data surrounding the event. You may end up finding that Black Friday is not the right deal for you and that you’re better off focussing your resources elsewhere.

 

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Photo Credit: Diariocritico de Venezuela

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