Black Friday has quickly become the largest shopping day of the year. According to CNBC, shoppers spent $7.4 billion online on Black Friday in 2019, ranking as the second-largest online shopping day of all time. With companies presumably promoting Black Friday and Cyber Monday more frequently—and at bigger and bigger discounts—what might persuade a brand to decline to participate in all the frenzy? (We’ll give you a hint: an increased chance of greater purchase value, a more likely second purchase, and a higher lifetime value from consumers.)
We’ve noticed a growing list of retailers who have decided to decline participation in major sales and promotions— including Everlane, Patagonia, Cuyana, and REI. This non-compliance ranges from complete website shut downs, to making promises to donate all full price sales to a like-minded charity. Herein lies the basis of our non-promotional conversation and long-term customer retention. So, to explore how genuine messaging can resonate with your customers beyond surface level, let’s examine some of the most important metrics that brands must meet for long-term brand value—and how skipping the big promotion might just be the solution.
Average Order Value
Average order value (AOV) is a metric we often associate with brands of all sizes. We are constantly strategizing ways to increase this number. Studies show that as AOV increases, so do the chances that said customer will return and purchase again. So, how do we increase AOV—while remaining profitable? Here are just a few ideas:
- Clearly translate product value (i.e. handmade, sustainably sourced, etc.)
- Define what problem said product solves for customer
- Transparently suggest like-minded products
- Offer free shipping at target AOV
- Stand behind a clear cause as done well and discussed by founders in the marketplace here
There is a 95% increase in the likelihood to purchase again between first-time and second-time buyers, according to some studies. Our goal is constant in converting those first-time buyers––and for good reason. As a customer experiences a positive shopping experience and receives a product that exceeds perceived standards, they are halfway to their second purchase. The second leg of conversion is in speaking to your customer in a way that resonates with them.
This typically comes in the form of personalized follow up communication and clear brand messaging. At Buckland Co., for example, we find healthy email open rates above 35% when properly executing the above.
Increase Lifetime Value
Lifetime value is the concept of getting customers to purchase again and again. Generally, this theory is referenced in increasing the dollar value a customer spends beginning at first purchase and prolonging purchases over an increased period of time. For example, Hawaiian shirt brand (and, not to brag, one of our accounts), Reyn Spooner provides products that are consistent—and a brand experience that conveys a story to their customers. Here are just a few ways they do this:
- Clearly state their purpose
- Provide a high-quality, long-lasting product
- Speak personally to shoppers post-purchase
- Offer a VIP program to frequent shoppers
Notice any commonalities? Not once in any of the above instances do we discuss promotional selling. We highly implore all brands to create a valuable customer base. Using product value, solving a shopper’s problems, and standing behind core values…these are components that contribute to a secret sauce that, when done well, greatly increases a brand’s chance of success and long-term profitability. The days of discounting product below margin to gain a quick sale may never go away, but we anticipate long-lasting, profitable brands to lean on the core values mentioned here.