As I sit here in shorts and a t-shirt, watching an 80º California summer day melt into a 75º California night, I feel only one thing.
Anxiety that I’m already behind.
Never has an ecommerce holiday season been so rich with opportunity. Never as fraught with challenges.
Among the shadows stand Amazon delaying Prime Day, enterprise retailers flooding Q4 with unspent budgets, and shipping providers pushing guaranteed Christmas delivery to early Dec.
Add to that an uncertain economic forecast and you’ve got the perfect storm for choking acquisition costs compounded by low-value shoppers: distracted, distressed, on the hunt for deals.
With those challenges in mind …
It’s a plan backed by over $200M in advertising spend over the last two years. It contains original data, industry benchmarks, as well as original contributions from some of the world’s leading DTC brands and experts.
But more than anything, I hope it contains peace.
Peace from the fear, anxiety, and visions of missed deadlines. Peace that comes from facing uncertainty together.
Peace in knowing not that you’ve planned to perfection ... but instead to meet and overcome the inevitable missteps we’ll all face in a year unlike any other.
To guide you, we’ve created a Holiday Marketing Ecommerce Bundle that includes:
Web Smith, Founder & Editor-in-Chief of 2PM, Inc.
The questions I’m interested in are around sociological forecasting.
How will your brand fit into the landscape of worldly events? What will America look like politically? What will ecommerce penetration look like? What channels won’t major brands be in both advertising and organically?
What will the temperature of the country be, who’s going to win or lose, what will that transition look like?
The common theme throughout the brands I’ve been working with is how to find stability in the storm. Speak strongly, understand the situation we’re all in as citizens, present positivity, but be authentic in that positivity.
Jessica McGlory, Head of Growth at Verb Energy
At the end of the day, consumers won’t really be shopping for different things nor along fundamentally different timelines and patterns. What they buy and when they buy it will be similar.
The different behavior that humans are going to display will be how they get their things.
You’re still going to have shoppers who would have otherwise driven to a store all of a sudden realize, “Oh my gosh, I have no way to give this gift to someone, and Christmas is almost here.”
Last-minute shopping will be more intense than ever before with the likelihood of businesses limiting retail sales. We’ll likely see shipping wars unmatched, but the vast majority of DTCs won’t be able to compete with same-day and overnight shipping which will see an uptick.
DTCs must find other options — such as incentivizing those who purchase earlier in the season.
Before the data, insights, and trends, the first question you have to answer is: “What are my business’ holiday goals?”
The question is so crucial to success, I hesitate to call it a “tip.” Nonetheless, for the sake of making the main thing the main thing:
Determine your Black Friday, Cyber Monday goal and calculate your success metrics to support it.
All four of the options listed above are great. Each requires you to understand the “why” behind your success metrics — launch, profit, grow, or prepare.
Success metrics should never be arbitrary nor because they sound nice (though a 4.0 ROAS does sound sexy). Instead, they should come directly from your overarching goal.
To do that, we’ve built a Holiday Profit Template with two tabs: (1) Cost Breakdown and (2) Profit Analysis:
Jeremy Cai, CEO & Founder of Italic
Primarily relevant for brands looking to scale: you need to be realistic in looking at your business from an objective and quantitative lens.
Invest in reporting early on and develop competency around understanding and dialing in the metrics that matter for your business on a cohort basis. The sooner you do this, the better equipped you’ll be to answer how to grow your business. Don’t put this off.
For example, let’s say you sell your hero product for $100 and your contribution margin is $50, and let’s say you were acquiring early customers at $30 on FB, that’s great, double down. But once your CAC has grown to $60, it’ll be too late to course-correct. Sounds obvious, but it’s really easy to miss if you’re not keeping an eye on it constantly.
Economies of scale are purely theoretical in DTC and you need to invest in becoming a data-driven organization early on.
Jaime Schmidt, Founder of Schmidt’s Naturals & Supermaker Author
2020 is DTC. There’s no disputing. But you also need to be thinking about omni-channel.
My path to success at Schmidt’s was to always say yes to every channel. Every brand should be thinking about it, especially because DTC is becoming increasingly competitive.
A lot of customers only discover brands in stores. And there’s real opportunity to partner with retailers for promotions, coupons, and circulars that DTC brands aren’t looking at. Don’t be afraid to go down different channels due to price points or perceptions around imitations with cost of goods.
Both brick-and-mortar and ecommerce (specifically DTC) need to prepare for a different type of Black Friday. A creative, customer-centric, omnichannel approach will be huge for visibility, engagement, and conversions.
Pull your AOV from last year’s holiday sale. If you don’t have data from last year, pull evergreen AOV and adjust a bit higher if you’re projecting any sort of increase.
Chris Cantino, Co-Founder of Supermaker (Previously Schmidt’s Naturals Dir. of Marketing)
Optimization is DTC’s strength. Big CPG relies only on guaranteed media buys and doesn’t look back. They just slap a discount on and don’t optimize.
Watch your AOV increase and be willing to raise your CAC accordingly. Know your margins and be clear on your COGS.
If your target CPA is around $15, but your AOV, has gone up by 40%, can you flex on that CPA? This is different within every team.
If your company is EBITDA negative or your supply chain is backed up, your priorities may lie in actually slowing down a “too successful” campaign. Know your KPIs and make sure marketing is aligned with finance and ops.
Don’t rely on your discounting to do all the work:
Marco Marandiz, Ecommerce DTC Strategist
Choose a few channels that you have disproportionate leverage on, and scale those. It makes it a lot easier for your customers to find you and doesn’t dilute your messaging across multiple distribution channels.
Every customer touchpoint matters.
From top-of-the-funnel ads through your checkout flow, consistency makes sure that your customers don’t get confused and no red flags are set off. At scale, this can have dramatic impacts on your conversion. Starting out, this gives you value props more power and clarity.
Your customers decide to buy when they see the ad, the influencer, the content. Make it easy for them to convert from these touchpoints.
This includes any costs associated with getting your product into your customer’s hands.
You’ll need your average COGS across all SKUs, credit card fees, shipping costs, and your fulfillment cost per unit.
Also, enter last year’s discount as a starting point:
Marjorie Chelius, Director of User Acquisition at Native
Any seasonally-relevant “extra” you can give your customers during the holiday will provide that “little something” to make them feel valued. A simple gift upfront can go a long way toward building loyalty amongst your new and existing customers alike.
Other tactics are things like:
One of the main things that our operations team does because we’re still very lean is triaging SKUs we know are going to give us problems.
Instead of trying to get demand forecast absolutely perfect across our entire portfolio, we zone in on SKUs that either (a) have a longer lead time or (b) can’t be replenished.
Jack Meredith, VP of Marketing at Kettle & Fire
Dial your demand forecasting in for the unpredictable season to come.
Back in March, when people started stockpiling from the coronavirus, we weren’t ready, sales were through the roof, and just couldn’t keep up with demand.
From that, we set up a taskforce — a brain trust — that meets once a week. We spent a full hour once a week going through each SKU, understanding what the inventory available was for DTC, Amazon, and retail.
We tried to make the best decisions on the information that we had. That information included internal metrics, trends onsite and on Amazon, and SPINS data because we’re a CPG.
Do the same for your business.
Create a task force made up of finance, operations, logistics, and marketing to understand which products will be readily available — and how to best promote them.
In another article, we cataloged 435 offers from the top DTC and ecommerce brands. That piece holds a wealth of competitive analysis, along with creative insights from over 700 screenshots taken during BFCM last year.
Here — within the Cost Analysis tab — you can test the impact of the three most common offers:
Griffin Thall, CEO of Pura Vida Bracelets
At Pura Vida, we choose to stay in our own lane when it comes to Black Friday, Cyber Monday promotions. We’ve run the same promo for the past seven years, which we know works best for our brand.
Urgency, high-value prop, free gift with purchase — all of that comes together to create an offer that shoppers cannot find anywhere else on the internet.
In terms of the bigger picture, I’m seeing more brands start their BFCM offers sooner and sooner so that might be something we adopt more this year.
But — in terms of the consistency of the offer, marketing, and urgency — we are hyper-focused on the strategy that has proven itself so well for us year over year.
Trey Sisson, Co-Founder & COO at BABOON TO THE MOON
BFCM doesn’t always have to be a deal or discount. Leverage what makes your brand special to get people excited and generate demand: new products, limited editions, etc. It’s all about setting expectations and providing value.
As a travel brand going into Q4, we’re looking at back to school — the “second” back to school — as a delayed moment we can speak to.
It’s about finding these unique moments in 2020 and going after them directly. The holiday season will be different this year — but our customers will still expect us to be there for them.
When it comes to messaging the moment and thinking about your tone of voice, it’s become a day-to-day exercise now. It’s more important than ever to pay attention and react quickly to what our customers are saying.
Now that you have data plugged into the first tab, you can shift to the second and play with different monthly spend levels.
As you enter them, your true holiday success metrics will automatically populate, including:
With your initial goals and metrics in hand, next …
Map a Q4 calendar by planning 3-5 campaigns centered on landers, ads, and emails for …
We’ve set up a holiday calendar in Google Sheets to guide you through those five phases. If you’ve downloaded the Holiday Marketing Ecommerce Bundle, you already have it your inbox:
Jessica McGlory, Head of Growth at Verb Energy
CPMs will rise to the point of being unaffordable for smaller DTCs. There’s no way around it.
Even if stores open up and everything goes back to normal, one of the key differentiators of bigger brands versus traditional DTCs is that big brands have set budgets for the year. If they haven’t been spending, it doesn’t get lowered. It means that they’ll just spend it all at once.
That influx of cash will be staggering.
And it’s going to infiltrate not just digital but also TV and print budgets. Then, when ad inventory is low on those platforms, the budgets still have to go somewhere. That’ll mean even more money pushed online.
DTCs must find other options (gift cards with designs, incentives for buying earlier like an added gift with purchase by X date).
If you can’t compete with shipping wars, then co-marketing and shipping “limited edition” items with those with better distribution centers might be a viable option to enjoy rev share.
Organic will be huge. You won’t be able to compete with the big brands that can overspend on ads to figure out what works. Instead, use organic to build engagement throughout the holiday season.
Human behavior will only shift so much and with the sea of changes that have occurred, the familiar will be what’s exciting to most people.
To scale effectively, you’ll need to set a much more detailed budget.
That’s coming, but first …
We know that costs and online sales rates peak during BFCM.
How do we take advantage of the latter rates without overpaying on the former?
Simple. Buy your traffic ahead of time.
Think of it this way — last year I wanted to buy a new watch. At some point in Oct. or early Nov., I went to a few websites, clicked around, found the one I wanted, and then …
I didn’t purchase. Instead, I waited.
I made a mental note to check back on Black Friday to find out what the discount would be. When I came back, the watch was 25% off and I happily made my long-awaited, discounted purchase.
We all follow a similar purchase path when it comes to holiday shopping.
The way it affects your Facebook performance is through delayed attribution: 1-day view + 28-day click.
With BFCM, the problem is that there isn’t time to wait 28 days to determine if your ads are successful.
You need a reasonable way to project how much your ROAS will increase from day 1 to day 28 on day 1.
1. On the top right of your Ads Manager dashboard, click on “Columns.” Scroll down and click “Customize Columns”:
2. At the bottom right you'll see, "Attribution Window" — click that:
3. Next, click on “Comparing Attribution Windows”:
4. Select, View “1 Day” and Click “1 Day, 7 Days, and 28 Days.”
5. Last, select Oct. 2019-July 2020 and export that data by week
With that, you can project 28-days’ worth of revenue based on 1-day’s worth of data by creating a Delayed Attribution Multiplier (DAM):
Though seemingly complex, the idea is straightforward: the more delayed attribution you get, the higher the multiplier. Typically, that’s around 1.39x ROAS over 28 days.
However, the holidays are anything but typical.
Prior to Black Friday, DAMs jumped from their non-holiday averages of 1.39x to 1.58x; from 1.8 ROAS (1-day click + 1-day view) to full attribution at 2.4 ROAS (28-day click + 1-day view).
Before Black Friday, most advertisers see 1-day-click returns below target. In response, they hold out now to spend big later. Lower CPMs before Black Friday means you can arbitrage by buying that underpriced traffic.
That’s the holiday foundation.
Do not be afraid to scale against a slightly lower ROAS than normal. Those window shoppers will come back!
In fact, lean into it by being proactive. Prospect early and hard knowing that your DAM will disappear when Black Friday hits. Then, remarket even harder when it does.
At an industry level, three macro trends shape Black Friday and Cyber Monday (BFCM):
Because they interlock, the thing we want to understand is how industry-wide data can help shape your BFCM strategy.
Nik Sharma, Founder of Sharma Brands
Black Friday and Cyber Monday are animals of their own species. You can never assume that your Excel sheet projections will match up with your BFCM sales if they’re based on sales or growth numbers leading up to it.
Most brands leverage the fact that everyone is looking for a discount, but the smarter ones make sure AOV stays high throughout the sale.
While macro trends will give you indicators on what you should be discounting and for how much, micro trends give you better insights into the distribution channels of where you should offer those discounts and with how much spend.
Nate Checketts, CEO and Co-Founder of Rhone
We try to stay generally aware of macro trends by staying in touch with brands we like, respect, and have a similar audience. But we prioritize and focus on our own internal company data as the lead for determining any promotional activity and then adjust based on the market reaction.
For example, before Amazon’s second Prime Day, we read articles about a general lift for all ecomm attributed to Amazon customers opening their wallets. We decided to run a 15%-off + free 2-day shipping promotion and were blown away by the results.
Each year after, there have been more and more retailers dipping into the trend. This year, our offer fell flat. So, we pivoted on day three and offered last-minute surplus inventory. Positive results similar to our first campaign followed.
You have to go in with your best strategy and then be ready to react to the market, which is always hard to predict and based on many variables.
Popular wisdom goes something like this: “Customer acquisition costs are rising. CPM and CPC will never be the same.”
Not so subtle subtext: the golden era of DTC is over. Paid social can no longer scale a brand. Thanks for playing. Bye.
In part, that’s true. But, it’s far from the whole story.
Historical data at CTC paints a similar portrait to the wider narrative: from 2017 to 2018, CPMs rose steadily.
Naturally, over Nov. to Dec., they spike:
However, at the start of 2019 and throughout 2020, something crazy happened.
Ad costs went down.
Comparing the first half of each year:
When we pulled this data, we initially thought it was a mistake.
How could there be more advertisers and fiercer competition, yet a reduction in cost?
Kurt Elster, Founder of Ethercycle & Host of The Unofficial Shopify Podcast
When comparing industry trends with your own strategies, look for the overlap between the two. And then, test those new strategies early to a small segment of your audience.
When approached with industry data, I take it with a grain of salt. A lot of published research is self-serving, skewed, and the result of a PR effort. Treat it as inspiration or suggestions for marketing tests, not as gospel.
You already know what works in your business. Evolve that by being curious about new opportunities without going so far that you cannibalize your own success chasing shiny toys.
Kristen LaFrance, Senior Content Marketer at Shopify Retail & Host of Resilient Retail
At the macro level, pay attention to what sale formats the big players are tossing out.
How are they communicating those sales? What channels are they using to bring in new (and repeat) customers? Pay just as much attention to where they aren’t as where they are.
That being said, only you know your business the best. And at such a critical point in your sales cycle, don’t let industry trends skew you too far from your own knowledge.
A near majority of BFCM sales come from existing customers, not new customers. Don’t risk a good chunk of these sales by focusing too heavily on “the industry” and turning a blind eye to your own customer base.
Trust your own customers, trust your customer knowledge, test early and often with them. But, keep an eye for curiosity and adventure on the macro trends happening.
The biggest factors in 2020 were the effects of coronavirus on ecommerce. But that doesn’t explain the year-over-year trends.
Late 2018 saw the opening of a new placement with significantly cheaper ad inventory that has effectively lowered the average CPMs of advertising: Instagram Stories.
Despite non-feed placement, Instagram users have adopted Stories more rapidly than other recent releases. Far more than Instagram Shopping.
For brands, engagement likely stems from the organic feel of Stories in comparison to a feed:
On the paid front, Stories have significantly lower CPMs than both Facebook and Instagram Feeds — even over the holidays.
We also found that ROAS for Instagram Stories increased by 46% from Q1 to Q4 of 2019 while spend increased 337% (despite Instagram representing a mere 18% of business spending on Facebook overall).
Spend increased and efficiency didn’t decline … it improved.
Aurélie Bangard, Sr. Account Strategist at Shoelace
Every year, we start by reviewing our data from previous BFCM campaigns to recap what worked well and what didn't.
For example, Instagram Stories worked very well last year and we noticed that our most successful brands tend to boost acquisition spend in October and focus almost entirely on retargeting BFCM content throughout November.
Then we’ll consider new opportunities to incorporate into our strategy, such as Facebook’s new Asset Customization options for Placements as well as Campaign Budget Optimization (CBO).
Tracey Wallace, Head of Marketing at Eterneva
Consumers — like all of us — are living a life they did not expect for 2020, and many of us are alone and grieving. We don’t know what the holidays will bring in this insane year, but we do know that brands can continue to show up for their customers.
Surprise and delight has never been more important, whether that’s on social media, SMS, an email, in your packaging, whatever. Think now about what you can do to provide a moment of unexpected joy for your customers.
Be thoughtful. Human connection matters more than ever — because it’s rarer. Provide some humanity, something uplifting, something that’ll make them feel something different and better than 2020 did as a whole.
Creating content that feels native to the platform is a strategy used among top advertisers. And utilizing Instagram Stories will be key to winning with your ads on BFCM.
Use Instagram Story ads as a cornerstone of your holiday strategy to get cheaper delivery and higher reach.
Shoot your content in vertical 9x16 format to get the best bang for your buck. Story videos can then be used on Instagram and Facebook feeds automatically.
Now, about that even less expensive platform.
Since Snapchat hit the market six years ago, it has grown to boast over 190 million active daily users — quickly surpassing Twitter’s 126 million. Snapchat reaches 90% of 13-24-year-olds in the United States, more than Facebook, Instagram, and Messenger combined.
Beyond a few notable cases, scalable ROAS on Snapchat has yet to be proven. Cheap traffic, on the other hand, is plentiful.
And for the lead up to Black Friday, that’s what really matters.
Maximize your cross-channel efforts by prospecting at a lower price on Snap and then remarketing to that traffic on Facebook.
In addition, integrate the Snap Pixel with your Shopify Store to retarget visitors on Snapchat acquired through other channels. The same should be done with other high-volume, low-cost platforms like TikTok.
With each, the point is to generate as large a retargeting pool as possible.
Living in the world of Facebook ads, it’s easy to forget about Google, the O.G. of paid advertising.
While Facebook is a great way to generate demand for your brand, Google excels at capturing demand.
Unlike Facebook, Google Search and Shopping show up based on keyword searches of the end-user. While they may not have intended to purchase your specific brand, they definitely have the intention of purchasing something within your product category.
While it is competitive to advertise during the holidays, conversion rates are at an all-time high.
On Google, bid for maximizing clicks to optimize for the most traffic possible. Spend more than usual to capitalize on this opportunity.
Forget target ROAS or CPA bidding, especially on your branded search terms.
Tracey Wallace, Head of Marketing at Eterneva
Nothing happens in a vacuum. Your strategy for any campaign, including holiday, is about how you mix the macro with the micro of your brand, your messaging, and your offer/conversation starter.
Think of REI. Its #OptOutdoors campaign resonated with their brand (micro), but it hit on a much larger trend (macro) — digital wellness.
For your own brand, start with the macro trends happening in your space that are top of mind for your customers and prospects. Then, think through what you brand’s take on it is, why it matters (this part is important!), and the action folks can take.
Of course, you want people buying more of your products. But they are getting bombarded by emails, ads, campaigns — all talking about holiday gifts for XYZ person in their life.
Tying your campaign back to a larger trend that your brand is aligned with (and as a result, your customers are aligned with), makes your campaign stand out and drive more sales, all while increasing loyalty and building your tribe.
The idea behind our holiday strategy is to drive cheap (but qualified) traffic prior to BFCM. Then, reap the rewards of converting that traffic during the sale.
Arguably, the most important part of a successful Facebook ad campaign is being able to accurately measure success.
CTR and CPC tell you how engaging your ads are — as do video views and average watch times. Cost Per Unique Adds To Cart and Checkout Initiated tell you if there’s real purchase intent behind those clicks; that the ad is driving qualified traffic.
Emphasize creative testing during this time to find ads that will drive the lowest CPC and highest CTR.
Continually iterate on best-performing ad creative to find the winners ahead of Black Friday.
Normally, we measure creative through AIDA: attention, interest, desire, and action. Prior to the holidays, replace ROAS at the bottom of your AIDA funnel with Cost Per Unique Add To Cart and Cost Per Checkout Initiated.
This way, you still have a meaningful purchase metric to measure against while still taking into consideration that most people are waiting for the sales to begin before they hit “Complete Order.”
Create a default dashboard that shows the metrics that you should be looking at as you scale your ads up for holiday.
The first step is to go to Customize Columns:
Once there, you’ll have the option to type into the search bar which metrics you want to show on your dashboard.
In this order, these are the metrics to select:
To set that up for yourself, simply copy and paste the following string after your business_id= in Facebook’s Ad Manager campaign-view URL:
Focus purely on ROAS and cost per purchase (CPP). With the high cost of traffic, disregard CPC and CPM as much as possible. Skyrocketing conversion rates will offset the price.
Speaking of which …
At CTC, growth revolves around one equation:
(V x CR x LTV) - VC = Profit
Four variables, that’s it:
For Black Friday, Cyber Monday, how do you maximize the variables?
No spoilers: conversion rates hit an all-time high during Nov. with Dec. a close second.
Outside of holiday gifts, consumers are obviously down for a good deal.
Here’s that same conversion rate graph over 2019, isolating just BFCM.
Unfortunately, even if your conversion rates skyrocket, buying those conversions becomes exponentially more expensive.
How much more?
Last year, weekly CPMs for BFCM increased 49.1% compared to the non-holiday average: $17.37 (BFCM) vs $11.65 (non-holiday).
On the big days themselves, they spiked even harder.
Drive new, qualified customers to your site before BFCM so you can remarket during BFCM.
Because we know the cost of traffic is going to spike, potential customers must enter the top of the funnel during Oct. and Nov., with the idea of converting them during BFCM.
In case you missed that, I repeat: BFCM weekend is not the time to focus on driving new traffic. This is the opportunity where you are retargeting all the website traffic you have developed over the last two months.
Oct. and Nov. are about acquiring visitors; BFCM is the time to convert them.
For email, the issues aren’t really how-to tactics like holiday templates, subject lines, frequency, etc.
All that’s important, but it pales in comparison to three questions:
Everyone loves comparing themselves to industry benchmarks when answering the first question.
Data we compiled with Klaviyo puts it at ~$4.17. But, there are so many variables between brands, that it’s an almost worthless data point.
Instead, let’s talk about the other two questions and frame them around payback periods: the time between paying to acquire email addresses and generating revenue from them.
The second question is easy.
Email addresses become exponentially more valuable during Q4 than at any other time of year.
By way of example, we pulled email revenue metrics for FC Goods — one of our brands that makes men’s accessories out of vintage baseball gloves — and isolated the 30 day periods during and after our peak holidays:
The reason? We sent more emails and our list converted more. At the same time. And we’re not alone.
For ecommerce at large, 56% of email’s annual revenue is generated in Nov. and Dec.
Why? Because 89% of BFCM purchases are made by customers who open an email before the holidays.
Still, it’s the third question where the heart of BFCM lies.
When is it most valuable to get that most valuable email address? Answer: October.
Emails acquired in Oct. have the highest three-month value of any period of the year.
Taylor Sicard, Co-Founder of Win Brands Group
Q4 2020 will be the most competitive quarter ecommerce brands have ever had. Start prospecting yesterday.
If you don’t already have a large email or SMS list, start building it. If you were late to one or the other, focus on the one that you’re good at right now.
You should always be aiming for efficiency. Q1-Q2, that’s CAC vs AOV. In Q3-Q4, how efficiently can we get emails, phone numbers, and traffic for targeted remarketing.
There’s no perfect way to predict what the holiday season has in store for ecommerce. The optimal way? Calculated risks.
Identify those who purchase for themselves for the creation of UGC and social proof now. Then, during the holiday season, you can showcase this content to those buying your products as gifts for their loved ones.
Marco Marandiz, DTC Growth Strategist
Macro trends represent average movements of the market. They’re crucial to informing your BFCM strategy broadly, but no two ecommerce businesses are identical. Therefore, I advise clients to create holiday campaigns that acknowledge trends but stay true to their brand values and unique position.
Standing out with creative — while being spend-optimal — is a beautiful ideal, yet hard to execute on the most competitive holiday of the year.
Macro trend: Email marketers destroy your inbox because they’re unsophisticated.
Micro strategy: Offer exclusive merch at pricing otherwise unavailable to (1) your top ~500 customers as well as (2) non-customers through private FB groups, landing page sign-ups, and in-store collateral.
Three weeks before BFCM, email that list a pre-BFCM offer: e.g., 35% off versus your regular BFCM pricing of 25% off.
Do everything you can to acquire as many qualified email addresses and phone numbers (SMS) as possible now through early Nov.
Even if you lose money in the short term, your payback period will be at its shortest. So you can afford to be aggressive.
We’ve written extensively about email list building, the power of personalized quizzes, and email’s connection to retention:
But that’s not the only dynamic at play. The other factor is LTV itself.
Common sense suggests holiday customers are less valuable over time than non-holiday customers.
Rather than take that assumption at face value, we pulled data on 50 brands and compared the average LTV increase as a percent of first-purchase AOV over three time periods:
Then, we examined three cohorts by date of first purchase:
At first glance, those numbers may not appear troubling.
Their gravity becomes clear as soon as you calculate the delta between non-holiday versus holiday LTV:
In ecommerce, 60-90 day payback windows are essential to cash flow. Within that range …
BFCM shoppers are worth 41%-37% less than their non-holiday counterparts. And gifting customers, 21%-18% less.
Jake Cohen, Director of Product Marketing at Klaviyo
Over-invest in acquisition now, and be prepared to fulfill demand when it comes through. Make sure that you can be there for people when they’re looking for something to buy and they can’t get it in their local store.
Among the 19,000 brands we surveyed, 95% of the incremental revenue that came as a result of COVID-19 came from new customers. Only 17% of consumer respondents said shopping at a well-known brand was a priority.
Translation for the holidays?
An aggressive email acquisition strategy: welcome pop-up for new visitors, embedded footer (just in case), and exit intent. Make sure you have a multi-step welcome series to seal the initial relationship plus flows for both abandoned carts and abandoned checkouts. If you want to use SMS, make sure you are collecting valid phone numbers and consent.
Keep your email marketing efforts up-to-date the same way you do your ecommerce store: from pre-holiday shopping to Christmas and Christmas Eve (or, at least, Christmas Eve shipping cut-offs) to the New Year.
Delight prospects and customers with personalization. Now, more than ever, peer recommendations are driving a ton of purchases because people are shopping at more new brands than they ever have before.
How do you turn those industry trends into a step-by-step plan?
Just like your business, your data and your trends are unique to you.
These final tips will guide you through projecting a comprehensive marketing budget.
Step 1. CPM Data
Despite seeing a drop in CPMs, BFCM is still the most expensive time for advertisers.
To see if this CPM trend holds true for you, export your CPM data by week for Q4 2019. Plug it into CPM (column B). A graph will automatically populate showing you whether or not CPMs are cheaper before BFCM for you.
Step 2. DAM (Delayed Attribution Multiplier)
During the second half of 2019, the average DAM was 1.39x. In the 28 days prior to BFCM, it ticked up to 1.58x.
That may sound like a small difference, but on a weekly ad spend of $21k at a conservative 1.8 ROAS, a 1.58x ROAS lift represents delayed revenue of $59.7k compared to $37.8k.
If you have historical data, here’s how you would calculate your delayed attribution and the delayed attribution multiplier (DAM).
Pull revenue for 1-Day View + 28-Day Click and 1-Day View + 1-Day Click for Oct. 2019-July 2020. Paste it into columns B and E in the “Step 2. DAM” tab.
The sheet will calculate your week-by-week “Delayed Attribution 1 -> 28 Day” (column H) as well as the three blue boxes:
That data will automatically get sent to “Step 5. Budget Planner” tab.
There, if your normal target ROAS is a conservative 1.5, you’ll see a 1.21 in order to hit the target on full attribution.
Calculate your own Delayed Attribution Multiplier (DAM) and use it to update your BFCM ROAS 1-day targets.
It’s essential to calculate and utilize your delayed attribution multiplier so that you know what ROAS to accept and how much to spend in the weeks leading up to BFCM.
Your ROAS may look bad initially, but you have to take advantage of buying cheap, low-converting traffic before Black Friday in order to remarket to that traffic when the payoff is greatest.
Babak Azad, CMO at GoodRx & Former Beachbody SVP
You have to start by considering if macro trends actually correlate with your business. Some businesses are outliers or just plain execute better than their competition and the market overall.
It’s similar to historical data. Perhaps you had a strong new product or promotion, but this year you don’t have something similar. Or perhaps, it’s the exact opposite.
Then, you have to decide what level of risk you want to take and the exposure:
The bottom line, I don’t think any of the above is that different from how someone approaches their broader strategy. Only a few businesses should approach BFCM in a fundamentally different way.
It’s certainly important, but if you’re nailing the other 350+ days of the year, then I think you approach it as an opportunity to get even better results.
Chris Cantino, Co-Founder of Supermaker (Previously Schmidt’s Naturals Dir. of Marketing)
Historical data is everything. If you’re in year one and you don’t have it, run test campaigns to isolated audiences at your planned discount rate with the goal of identifying an uptick on your conversion rate.
Or, do some lead gen by offering customers to sign up for early access to the discount as a way to gauge interest and see if you’re incentivizing enough (or too much).
Educated guesses are key, but BFCM and discount events are not “set it, and forget it” moments.
You have to be ready to invest opportunistically in winning ad sets, and that can mean pulling levers — increasing and decreasing budgets on several to dozens of sets at a time. Minimum and maximum advertising budgets are okay, but static budgets are not ideal.
At this point, you have a 1-day target for both non-BFCM and BFCM periods aligned with your Q4 goal.
We can now take your revenue goal and combine it with the research on your account behavior.
If you have your revenue goal broken out by months, that’s great. If not, here’s an example of how to do that.
Step 3. Revenue Distribution
Enter your 2020 Q4 Goal Revenue into the blue box on the “Revenue Distribution” sheet. Then, pull your revenue data for Q4 2019. Enter it either as Weekly Revenue (column C) or Monthly Revenue (column H).
As soon as you enter your Q4 Goal Revenue below the blue box — $5 million — and historical revenue, all the percentages will populate. Even better, you’ll get an immediate calculation of your 2020 Monthly Est. Breakdown (column J).
Those are monthly goals based on your own historical trends and your 2020 goal.
Let’s take a similar approach with revenue from your marketing mix to truly back out spend.
Step 4. Six Month Revenue Attribution
Pull the last 6 month’s revenue by month and Q4 2019 revenue by month:
Paste each of those sets into the corresponding cells:
We have it broken out by Feb.-July of 2020 and Q4 of 2019 so that you can compare the percentages represented by each channel during peak versus normal seasons.
After adding in your revenue by channels, columns J-L will populate the percentage of revenue each channel should represent.
Project your weekly spend budgets by channel to meet your holiday goal and success metrics. Then scale, scale, scale.
Step 5. Budget Planner
Finally, we’ve arrived at the Budget Planner.
Everything you need will already be there waiting for you, except:
Use the information found in “Step 3. Revenue Distribution.” Don’t forget that Cyber Monday fell in Dec. for 2019 but Nov. this year:
If my revenue goal is $5 million and Facebook represents ~41%, $2.07 million needs to come from Facebook.
Far more important than a mere revenue total …
You now have weekly projections for Facebook and Google based on your own data, goals, and success metrics.
One of the hardest things about being an entrepreneur is that we’re constantly reminded of all of the things we’re failing to do.
It’s the curse of the marketer or ecommerce owner to live in a world of “always more to do.” At its worst, information piles on this feeling and leaves you paralyzed.
At its best … it brings freedom, light to your path, and peace.
Thank you for spending thousands of words with us. We wish you a very happy holiday season with Shopify sale notifications so abundant on your phone that you have no choice but to mute!