Why September Is the Most Important Month of Your Q4

[00:00:00] Richard: Hey everyone, welcome to the Ecommerce Playbook podcast. I'm your host, Richard Gaffan, Director of Digital Product Strategy here at Common Thread Collective. And I'm joined, uh, coming in live from our studio in Costa Mesa, California, Mr. Luke Austin, who's the president here at Common Thread Collective.

[00:00:14] Luke, what's going on, man?

[00:00:16] Luke: Uh, we are, we're in it. My, uh, we've got some family, family, uh, things going on. New, new baby in the family. Uh, got, you know, this sort of end of September that the e- the end of August, beginning of September I think is when it starts to become really real for people that like Black Friday, Cyber Monday's basically tomorrow.

[00:00:35] So you sort of have that, you sort of have that converging as well. But never, never a dull moment, and that's how, that's how we like it

[00:00:41] Richard: That's how we like it. All right. Well, so let's, let's talk about that then. Um, as here we are at the beginning of September, um, and really the middle of September if you think about it. And really, if you think about it, Q4 is basically here, as you said, and Black Friday's right around the corner. And, uh, so the time to prepare is now, but the exact things that you need to be doing to prepare in Q3 are very specific in order to kind of achieve the Q4 outcome that you're looking for.

[00:01:07] So, uh, we're gonna talk through three things that you need to sort of consider, uh, as you approach Black Friday, and I'll set them up for you and then, and then you can kind of dive in. So one is you need to ask yourself what you believe about the impact of your active customer file, and we'll unpack that a little bit.

[00:01:23] Then you need to be thinking about your short-term LTV. That's the second thing. The third is the incremental impact of your media spend. So talk about those three factors, Luke, and what addressing them in September, how that can impact, uh, your Q4 performance.

[00:01:37] Luke: Yeah. So to frame it up, I think it's helpful for everyone to ask themselves the question, what they believe about this time period we're in right now. Like September of 2026, uh, end of Q3, Q4 starting. The next month, right? Sep- the rest of September, the first half of October, how, how do you view this time period for your business and the opportunity that it represents?

[00:02:02] And what, and what I'll say is, um, it-- from the seat that we sit in, there, uh, the approach from brands is, is widely different as it, as it relates to how you approach these next four to six weeks and what you see as the opportunity. Everywhere from, "Okay, we're post July 4th, we're post back to school. This is really the, the, the, the trough moment.

[00:02:22] Things slow down, conversion rate's lower, consumer sentiment and behavior is down, and so we're gonna hold back, sort of be more efficient, um, and, and save for the big, for the big push coming up." Uh, all the way to brands seeing this as, "Okay, this, this is our moment actually to grow new customers, grow our list, really lean in hard, pull out, uh, net new campaigns, uh, new, new launches, new categories, et cetera, and drive demand at this point, um, to contribute to Black Friday, Cyber Monday."

[00:02:51] Um, a- and that it doesn't pull revenue forward, um, it actually can be, um, incrementally really helpful. So I think it's helpful to just sort of reflect on, okay, what do we believe about, about this moment currently? Um, and as it relates to this moment, what we would contend based on what we see is that how you approach this moment comes down to what you believe about the three things, Richard, that you just walked, uh, that you just walked through.

[00:03:15] The impact of your current active customer file, short-term LTV growth of your business, and the incremental impact of your media spend, which we'll walk through briefly here. But the, the main point, um, that all these three-- these three things point to is that these next four to six weeks, um, are wildly impactful and represent a, a meaningful opportunity for your business to maximize your 2026 outcome as a whole, to maximize this time period of the next four to six weeks, but then also to maximize, uh, Black Friday, Cyber Monday and the, the Q4, uh, sort of end-of-the-year period that's coming up as well.

[00:03:46] And that this, this moment is not a, "Okay, let's pull back, sort of be more efficient," but this is, this is a really impactful moment for your business and represents a lot of opportunity, uh, and will contribute to the success that you see or lack thereof, um, in Black Friday, Cyber Monday.

[00:04:04] Richard: Okay. So let's, let's talk through, let's unpack each one of these. So I-I'm also interested in this framing, like what do you believe about your net active customer file? Un-unpack that sentence a little bit. Like what, what exactly-- what set of thoughts are we looking at here?

[00:04:18] Luke: Yeah. So, so the, um, the, this first one, so the impact of your current active customer file. There, um, uh The revenue that you realize in q- in Q4 and over Black Friday, Cyber Monday is going to be primarily influenced by your-- the- your current-- your active customer file at the current state. So what your-- the, the active customer file looks like for your business, um, is going to have a meaningful impact on the outcome that you see, um, over Black Friday/Cyber Monday.

[00:04:53] Um, and we've, we've dug into some data, um, and, uh, you, you may have seen some of the things out, out in the world around this that Taylor's, that Taylor shared as well. Um, but if you've grown your active customer file by more than 10%, uh, this year so far, there's a 77% chance that you grow and beat last year's Black Friday/Cyber Monday.

[00:05:14] Um, and the median result is a 40% growth. So, um, and then if your customer file is flat year to date, there's a 50% chance to beat, so it's a coin flip. You may grow last, last year, you may decline, you may be flat. Um, and the, the median result is 5%, so single-digit growth. And if your customer file is down 10%, there's only a 30% chance of beating last year's Black Friday/Cyber Monday, and the median is-- median result is being down 20%.

[00:05:41] So maybe even to take a step back, your customer file, um, every brand's active customer file, um, has a different definition. But we-- uh, what we do is we look at all the, the, the customers within your Shopify store, within your online store, um, and, uh, uh, create benchmarks around when, uh, the, uh, time period is for these folks to purchase.

[00:06:04] And so what we're able to see is at different percentage intervals where customers fi- uh, land into active, at-risk, and churned cohorts based on the prior behavior. And so we can see for individual brands things like, okay, uh, if a customer were to repurchase, were to purchase a second time, there's an 80% chance they would've done that within the first 150 days after making their first purchase.

[00:06:31] If it's been 150 days since they've made their first purchase and they haven't purchased again, there's a, there's a now a 20% chance, and it dissipates from there. And that's where we carve out these customer, these customer segments. For most brands, their active customer file ranges, um, in a, a four, five, or six-month time period.

[00:06:49] And so you can really just look at all the n- all the folks that you've acquired over the past six month. Like, this is a heuristic. This is-- this customer file is unique for every brand. But as a heuristic, look over the last six months, the customers that you have acquired, um, uh, and, and that have purchased for your business, how that, how that relates to the same time period in the year prior.

[00:07:09] And that gives you an indication of what your current active customer file is and if it's growing, if it's flat, or if it's down. And then you can use that to inform, okay, what is, what is the likely result, uh, over Black Friday/Cyber Monday that we can, that we can realize from, uh, from this set of customers?

[00:07:25] And what, what it will do, what it'll indicate, um, is, uh, where-- what is likely to happen based on your current set of circumstances, right? And it's, it's a helpful framing for us to understand, okay, based on where we're currently at, where do we need to head? But it, but it-- this ties into the second point, which is around short-term LTV growth.

[00:07:44] Because if you look at your active customer file, you see, uh, based on the data, um, what is likely to happen. Now, you can choose to not believe this, right? You can choose to say, "Okay, these are, you know, uh, aggregate stats from CTC's database of hundreds of e-commerce brands, and I'm gonna be different." And you, you will to some extent, right?

[00:08:05] So there, there's-- Um, but based on the dataset, this is what's likely to happen. And so if you believe that to be true, then what it leads you to-- what it should lead us to do is, is try to think about the ways that we can change that outcome, right? Um, h-how can we increase the outcome based on where we're currently headed?

[00:08:22] And the main way to do that, if the-- if your current active customer file is a, is a meaningful indicator over Black Friday, Cyber Monday, then the way to alter that trajectory or improve that trajectory is to grow that active customer file as much as possible before we get to BFCM because yes, we still do have time.

[00:08:39] Not much, but we still do have time. And that leads into the second point around short-term LTV growth, which is, um, the, the, the following question from, "Okay, I wanna grow my active customer file more. It's a big indicator of my BFCM success. But is it worth me going to acquire customers in September and early October?

[00:08:58] Um, uh, because those customers might come in BFCM, CACs will be more efficient. Is this really a good time to push? Consumers are holding out," et cetera. And this is where the belief around short-term L-LTV growth, the second point comes in, which is, uh, we consistently see, um, that, uh, the most amount of your LTV is realized over the first 30 to 60 days after a customer-- after you acquire a customer, right?

[00:09:22] And that gets heightened into Black Friday, Cyber Monday. It does not go the other way. So what that means is if you're expecting your biggest 30 to 60-day LTV bump to happen over Black Friday, Cyber Monday, um, then you actually have some additional room when it comes to customer acquisition that you could likely lean into ahe-ahead of Black Friday, Cyber Monday to grow your active customer file, right?

[00:09:45] Because you can count on short-term LTV growth, um, that's gonna be some of the best that it is this year for the customers that you acquire over the next four to six weeks, and leaning more heavily as it relates to acquisition to grow the active customer file, which is going to improve the result that you see over Black Friday, Cyber Monday.

[00:10:02] Richard: Yeah. Um, well, so let's, let's-- I think maybe let's roll into the third and then talk through, like, what the playbook is to address each one of these things. So the third piece, uh, here in the list is the incremental or what you believe about the incremental impact of your media spend. So unpack that a little bit and then let's kinda run back through and, and talk about the playbook for each.

[00:10:20] Luke: Yes. So this, this, uh, this is could be sort of a 2B as well. So like we-- the active customer file is a big predictor of BFCM success. Your short-term LTV growth is gonna be some of the best that it is in September and October heading into November and December Now the question is the media spend, where is it best deployed?

[00:10:38] Should I index more heavily right now on media spend, or should I hold the war chest for, you know, those core days around Black Friday, Cyber Monday because ROAS is so much better, CAC is so much more efficient, et cetera. Um, and so the question then becomes y-yes, now what do you believe about the incremental impact of your media spend, specifically in the Black Friday, Cyber Monday promotional period?

[00:11:00] Do you believe it's better than it normally is in the rest of the year? Do you believe it's worse? Do you think it's the same? And, and to frame this up more specifically, how we think about, uh, incremental impact of media spend is around, um, incrementality factors related to channels, right? So you have a platform-reported ROAS for a specific, specific channel and sub-tactic, and then you have the iROAS, the actual measure-measured result.

[00:11:23] The incrementality factor is a relationship between those two things, right? So 100% incrementality factor is saying they're perfectly aligned. What the platform is reporting for that tactic aligns with the incrementality 100%. If it's saying 50% then it's saying the platform's over-reporting by 2X, right?

[00:11:37] The current-- the actual iROAS is a 50% haircut of what the platform... So the, another way to frame it up is what do you believe, um, or have you measured, uh, related to the incrementality factor of your media spend in these different time periods, right? Uh, in an evergreen, not heavy promotional time period versus a biggest sale of the year time period.

[00:11:58] Uh, do you th- uh, what do you believe about the increment, increment, uh, incremental impact of that? Some brands have done this work. Um, it represents, I think there's, there's hesitation, especially if Black Friday, Cyber Monday is your biggest moment of the year to run, um, an experiment during this time period because there's gonna be some holdout on either a geographic or a customer level or a user level that's being done to measure the impact of the media spend.

[00:12:22] But, um, we last year did a, a smaller batch of, um, conversion lift test-tests for brands around Black Friday, Cyber Monday. Um, geo holdout testing is our preferred sort of approach, but it requires larger holdouts and impacts. Conversion lift testing requires, uh, less of a holdout and less of a potential risk to the, to the business.

[00:12:46] So, so we did it that way. It's a user-based holdout rather than geo-based holdout, um, and through, uh, Meta's conversion lift, uh, tool, and you get stat sig results, et cetera, and it gives-- it's a really helpful indication. So we've done this for a handful of brands, um, over recent promotional periods, uh, and we've seen wildly disparate results as well, um, related to this, which is like, "Oh yeah, like your inc- your media spend is a little less incremental during Black Friday, Cyber Monday, but it's kind of the same or a little bit more."

[00:13:14] We have not seen that. We have, we have seen the cases where the incremental impact of, of media spend is, uh, the incrementality factor is half of what it is during an evergreen time period over that, you know, sort of core week around Black Friday, Cyber Monday. Um, and, and then we've seen it swing the other direction as well.

[00:13:30] But the point being that there's a really different. There's likely a very different incremental behavior as it relates to your media spend over key promotional periods relative to normal time periods, which is probably when you have done your marketing measurement testing historically, right? So, um, this begs the question, going back to sort of this point three, what do you believe about your inc- your, the incremental impact of your media spend?

[00:13:54] Yes, the ROS is gonna look best, um, during Black Friday, Cyber Monday. The CACs are gonna look stronger. Right now, there's sort of less of this consumer demand to lean into. But if you're gonna see the biggest impact of your LT, short-term LTV growth, and if the incremental impact of your-- if your incrementality factor is 20%, 30% better right now than it is in another period, then all, all the more reason to actually pull dollars into making this into a moment.

[00:14:20] Um, and these, this isn't a binary like, you know, you, there's a set amount of-- We don't think about budgets as like you have a set amount of budget, so it's like you just pull it from here and that one has to go down, right? Like if you're creating incremental contribution margin, you should allocate incremental media dollars to do so.

[00:14:35] Um, but, uh, it would just make the case that the incremental impact of the media spend is strong, leading to the short-term LTV growth, which leads to the net active customer file growth, which is going to lead to the Black Friday, Cyber Monday impact that you're seeing. Um, and, uh, all of these sort of data points that we're throwing out around what we're seeing that, uh, you know, some of these, uh, you've measured maybe, some of them you haven't.

[00:14:58] So you're gonna have to believe or assent to some of this, right? Around like, "Okay, what do I, what do I think is true?" Um, or create a measurement framework, um, for you to get actuals or results for your brand specifically, um, in this time period so that you can use that for future decision-making.

[00:15:14] Richard: Yeah. Um, so right, I mean, I think that that's kind of one of the next questions is how to move from belief to knowledge on some of these things. But for the, the incremental impact of Black Friday versus your evergreen, let's say, is there-- and maybe you mentioned this, but is there a rough correlation between how, like, the incremental impact in other marketing moments or other sale or promotional moments, let's say like Father's Day or whatever, and Black Friday?

[00:15:39] Is just Black Friday is just that writ large, or is there some other sort of discrepancy

[00:15:44] Luke: Yeah, so if I, if I had an incrementality result from, uh, if I had two incrementality results for a meta acquisition, one during an evergreen non-promotional period and one during my July 4th sale period, then I'm likely going to, um, use the incrementality result or le- or a closer result to the July 4th per- uh, period, uh, result that I had, right?

[00:16:07] Um, now the Black Friday/Cyber Mon- Monday moment is just, is just a different moment altogether just 'cause there's so much demand out there. Um, uh, but it's going to be the closest, you know, form of, of, uh, what, what I would believe to be true and an indi- indication of how my media spend works for me during a promotional period.

[00:16:25] Richard: Okay. Okay, so let's, let's, uh, kind of then circle back to each one of these points and talk about-- I mean, it sounds like the-- then again, they're kind of all related to each other, but what's the playbook for addressing? Let's say, here it is, it's September. I've, uh, been neglecting my Q4 prep just because I've been putting out fires everywhere or whatever, and the team is kind of scrambling.

[00:16:45] Here we are. What is the, what is the, the move here to grow that short-term LTV, grow the active customer file, that kind of thing?

[00:16:54] Luke: So step one, measure your net active customer file relative to last year and see where you sit. Are you grow-- you have 10% plus growth? Are you flat? Are you down? Based on that result, are you happy with what that'll lead to at, from a, you know, aggregate data set or median outcome of what we talked through?

[00:17:12] Um, if you are, um, then maybe your game plan's working. Maybe no, no changes are, are necessary. Um, if you aren't, but I would contend even if you are, like, you know, in the ballpark, then getting to s-step two, um, is understanding what your short-term LTV growth is. It is going to be in, in a year, f- uh, in a year's LTV impact, the biggest impact is gonna be the first 30 to 60 days.

[00:17:35] That is just, it, it is for, for, for any business. So, um, relative to that, um, uh, walk through some scenarios around, okay, what if we could push X amount more media spend at X CAC and bring in this many new customers? How would that impact our net active customer outcome, right? Where right now we're pacing to 7% growth on our net act-active customer.

[00:17:58] If we did a big push over the next six weeks, created some moments, et cetera, leaned in, um, could we get to 10%? Could we get to 11%, right? Like that's, that's the, that's the move to make to where you can start to increase your probability of making the BFCM as big as it, as big as it can be. Um, that's going to be the hardest work, is specifically crafting the moments and things that are needed to be able to execute against this outcome, and it's gonna require a lot of creati-creativity, right?

[00:18:25] How do you manufacture moments for your brand, um, over the next four to six weeks? How do you create the, the landing pages, the ads? Do you have the production engine to be able to support that in that time horizon? Where, where are you gonna a-index the additional media spend based on, um, the, the measure result of it?

[00:18:40] That's, that's the actual hard work of this, is once you create the-- is creating the game plan to index against, but that's what it is going to require. And then third, on the incremental impact of your media spend, there ha- there, a decision needs to be made around how are you gonna approach, um, the measurement of that, of that media spend over the course of Q4.

[00:18:59] And what we recommend as a clean action item for, for most businesses is to run, uh, to do a marketing measurement exercise, likely a conversion lift study, or if you're comfortable with it, a geo holdout study around one of your upcoming marketing moments in Q4, so that you can get real clarity for what your, how your media spend works for you in moments like this and how it's different from other non-promotional time periods.

[00:19:22] Richard: Yeah. Um, can you, can you give some examples or maybe some just like concrete instances of the type of like short-term LTV building or active customer file building offer that can happen or that you could potentially put together in September, like from clients, from whatever

[00:19:42] Luke: Yeah. So we can, we can go-- So what I would, what I would start with, uh, as-- What, what I would take as a starting point is, is there, is there any moment calendar related that you could attach your brand to, right? And there's all sorts of things that, that go on in the world that are like unique day, y-you know, like cellular health celebratory day, September 17th.

[00:20:04] Or like there's, there's all sorts of things that go on that are like these moments, um, calendar re- calendar related or, um, trend related. Like there's, there's things going on like we-- There's a, I'm trying to remember what the specific day was. We had, um, we have a brand that we work with that's like, uh, uh, um, religious, uh, reading materials, um, and journals.

[00:20:26] Um, and there was, uh, it's not a c- uh, not a calendar specific day, um, but it was something that was being planned a-around college campuses and was like a day of prayer sort of idea. And so there was this, like th-this moment that was going on that they attached themselves to, right? Um, and had a partnership with one of the nonprofits and like did a thing around it, right?

[00:20:45] And so that's where I would start is like, uh, is there any momentum in the world that I can attach my brand to, right? And enter into the conversation. Um, and then create a specific offer that's genuine to that moment and to your customers to be able to drive excess demand, and then all the things that we know are necessary, the creative assets, the landing pages, the media spend plan, et cetera, to be able to get there.

[00:21:09] But that's, that's, that's really the, the playbook. Start, start by finding some energy, some momentum that exists out in the world that you can, that you can connect to in a genuine way and ride, take some of the wind of, of that, right? Like sort of ride that moment, um, as well as, uh, invest into it and then bring, yeah, a specific offer for, um, for the customers in that period and then a campaign that aligns, that aligns with it.

[00:21:34] It's gonna result in the biggest outcome that you're gonna be able to, be able to see outside of just, uh, just, um, sort of grinding on your core evergreen, you know, create, create more ads, push more media spend in the most incremental areas, et cetera.

[00:21:47] Richard: Yeah. So in short, as, as we've talked about many times on this podcast, it's about building a marketing moment, figuring out why September makes sense as a time to buy for your brand, and then being creative about that and going from there. So, um, yeah. Anything else that you wanna add on this, Luke? Any sort of final, like if you, a-again, are in pos- in position, and you've already given some, some advice, but distill it down to like what's the first step?

[00:22:09] What's the first move for somebody listening to this right now in terms of, of doing this properly?

[00:22:14] Luke: I, I would contend that like all the-- I've sort of made a case for like why this moment should, you know, like you should index over these next four to six weeks. I would throw that all out the window and just like approach these next four to six weeks about like, how can I make these the biggest for my brand, right?

[00:22:28] Like there's, I think there's this concern many times for like, okay, well, if we do something now, are we pulling revenue forward? Is it gonna make our offer during BFCM confusing? Like we're, we're two and a half months away. Like no one remembers. I don't remember what I ate for breakfast two days ago, right?

[00:22:45] So like there, that, that doesn't exist. Um, um, and so how do you approach this moment and maximize it for your brand and don't get pulled into the like, oh, it's, you know, it's September, it's just kind of a slow time period and like we're really focused on the Q4 in the moment. Like all of that, you're going to maximize that moment more by making this moment as big as it can be for your business.

[00:23:06] So, so do this, right? 'Cause it's going to give you both outcomes.

[00:23:11] Richard: That's right. All right, folks. Well, if you are interested in, A, moving from belief to knowledge on these three points, and then, uh, B, ex-executing against them in kind of a direct way, obviously, commentaryco.com, hit the Hire Us button. We would love to talk to you, particularly if an eight-- you're a seven or eight-figure brand, about how we can start, uh, crushing this time for you.

[00:23:31] So, um, Luke, anything else you wanna add?

[00:23:34] Luke: That's it. Let's have a great September. The best September

[00:23:37] Richard: That's right, let's have the best September, folks. Um, all right, that's gonna do it for us. We'll see you all next time