The Black Friday and Cyber Monday sales are some of the biggest shopping holidays of the year. And, for ecommerce businesses, they can be make-or-break times. After all, these two days can account for a huge chunk of your annual sales.
So, how can you make sure that your business is ready to take advantage of the BFCM rush?
10 Tips for Maximizing BFCM Profits in 2022
Here are a few strategies that you can use to help maximize your profits this holiday season:
1. Analyze your margins
Before you run any sale, analyze the margins on each of your products. This will help you determine which products are most profitable and which ones you can afford to discount. You should also consider your customer lifetime value when analyzing margins.
If you know that a customer is likely to purchase from you again in the future, then you can afford to discount your products more heavily as you will make up for them in the long run.
This will help you determine which items are most profitable for you to discount and how much of a discount is reasonable. The goal is to increase sales without eating into your profits too much.
2. Run a price test to sell at higher prices
You don’t have to cut your product prices to the lowest number possible. If you’ve been running branding and awareness campaigns, your brand’s perceived value could be much higher.
And slashing your prices too low can be bad for your business. So how do you know what the right price for your product should be during the sale season?
If you can find the highest price your customers are willing to pay before the sale, you can create discounts based on the new prices.
An app like Dexter can help you run a price test in 3 easy steps on Shopify. Simply install the app and:
- select the product you want to test
- set the price increase or decrease
- split the audience as per your preferences
Once the price test is live, you should see the statistically significant insights within less than a few hours depending on the amount of traffic you get to your product pages.
You can continue to test higher prices until you see a drop in conversions. That’s where you go one step back and stop — the point where your price was highest with negligible change in conversions.
From here on, you can offer discounts on the newly determined prices to ensure higher profitability during your BFCM sale seasons.
We also have a quick guide on price testing that you can follow to get your price tests set up with Dexter.
3. Create bundles & kits
Another great way of driving traffic and conversions during the BFCM sales period is by creating bundles and kits. This is an excellent way of clearing out older stock while still generating healthy profits for your business!
Here are some tips for creating effective bundles:
- Include products that complement each other and can be used together — this will encourage customers to purchase the bundle as they know they will get good use out of all the products included.
- Include your best-selling products – this is a great way to clear out older stock while still generating healthy profits for your business.
- Offer a significant discount on the total value of the bundle – this will make it an irresistible offer for customers and encourage them to make a purchase.
We also have you covered here with more tips on creating the perfect bundles for BFCM.
Also, here’s the thing — bundling products can be quite technical without the right tools.
If you want a simple, yet flexible Shopify app for bundling, we recommend you try BoxBuilder. It balances customization and simplicity, giving you all that you need to get your product bundles for sale.
4. Offer a Free Gift with Purchase
An excellent way to increase your average order value is by offering a free gift with purchase (GWP). Customers love feeling like they’re getting something extra, so this tactic can encourage them to spend more on your site.
This is an excellent way to incentivize customers to make a purchase from your store, as they know they will receive a freebie just for shopping with you!
Here are some tips for creating an effective free gift with purchase:
- Choose a popular product to include as your free gift – this will make it more enticing for customers.
- Include a minimum spend threshold – this will encourage customers to spend more in order to receive the free gift.
- Make the free gift relevant to your target audience – this will ensure that it is something that they will actually want and use.
Do this right, and you’ll have people eagerly waiting to purchase from you.
5. Offer free shipping
If your margins do not allow free gifts, try free shipping. 73% of customers will add more products to meet the free shipping threshold — thus increasing your average order values and maximizing your profit per sale.
For example, Gap Factory offers free shipping to logged-in members for orders over $50.
This allows the company to offer better recommendations to their customers based on the purchase history — thus improving profitability and customer lifetime value.
You can also build the shipping costs into the product price and offer free shipping sitewide.
In whichever way you implement free shipping, make sure that on the checkout page:
- There are no surprises for customers, especially no added costs.
- Mention the fact that customers are getting free shipping as part of a deal or because they have an account with you — this makes customers feel like it’s an exclusive deal.
- Offer a discount at checkout by suggesting a coupon code automatically. You can also use an app like Moonship to auto-suggest personalized discounts for customers.
6. Offer time-sensitive discounts
Another great way to increase sales and profits during the BFCM season is by offering time-sensitive discounts. Time-sensitive discounts create a sense of urgency and encourage customers to take advantage of your sale before it ends.
You could offer a “flash sale” on specific items for a limited time, or give customers a percentage off their order if they make a purchase within the next 24 hours.
Here are some tips for creating an effective time-sensitive discount:
- Include a countdown timer on your website – this will let customers know how long they have to take advantage of the deal.
- Make the discount significant – this will encourage customers to make a purchase before it expires.
- Limit the number of products available at the discounted price – this will create a sense of urgency and encourage customers to buy before they run out.
7. Offer early access to your sale
If you want to really drive up sales, offer early access to your sale! This will give your most loyal customers first dibs on all the best deals — making them feel appreciated and more likely to shop with you again in the future.
To do this, simply send out an email blast or post on social media letting your VIPs know when they can start shopping. You can also create a landing page on your website specifically for VIPs with all the details about the sale.
If you want to really get ahead of the competition this BFCM, consider offering early access to your sales. This can be done by sending out exclusive coupons or discount codes to your email list or social media followers before the official start of the sale weekend. This is a great way to create a sense of urgency and excitement around your brand while also getting a head start on making sales.
8. Offer discounts for signing up for your email list
If you also want to increase your email list this BFCM, consider offering a discount for those who sign up. This is an excellent way to encourage customers to join your list while also providing them with an incentive to shop with you in the future.
Plus, it’s a great way to build relationships with your customers and keep them updated on all of your latest sales and promotions.
As they regularly hear from you through newsletters or retargeting ads, your brand stays on top of their mind for the next time they want to purchase a product. You also get access to their purchase history thus making it easier to recommend relevant products at the right time.
9. Give away free products
While there’s no such thing as free, it pays to give away free products. It’s a calculated risk that ecommerce businesses take.
Here’s how you can give free products to customers while maintaining profits:
- Free plus shipping method: Businesses offer a very low-cost product for free and ask customers to pay $10 for shipping. The $10 covers the shipping as well as the cost of the product. Also, because the product is marketed as free, it gets shared in freebies groups across different social media platforms — thus giving your business visibility within your niche.
- Upselling and cross-selling: If your purchase funnel can generate an average profit of $50 per customer, you can afford to give up to $50 worth of free products per customer. Even if a few customers do not purchase anything else, you still maintain profitability by upselling and cross-selling to the ones who do.
- Refer 10 to get free products: This is another common strategy that many smaller ecommerce companies use — but that does not limit it to smaller stores. Here, you ask customers to share your product page with 10 people or groups either on social media or through personal messaging. This gives customers a reason to share and also indirectly promotes your business.
The safest bet is to go with free plus shipping methods where you ensure profitability at every sale instead of waiting for someone to share or buy additional products. However, make sure you thoroughly understand your audience and your niche before implementing a free product strategy.
10. Encourage referrals through discounts
Referrals are some of the best ways to generate more leads and increase your sales overall. It is also an excellent way to get your brand in front of more people without advertising to them.
Offering customers to share discounts with their friends and family — and in turn, also rewarding them encourages them to share further.
You can also onboard smaller influencers by giving them higher affiliate commissions for sharing with customers — thus creating a win-win situation for both.
Buckle up for higher profits this BFCM sale season
Get ready for the biggest shopping season of the year. This is your store’s opportunity to make the best of the sale season and earn the maximum revenue possible.
The best practices and tips in this article should help you get a headstart on executing your BFCM strategy — plus get your store all set up for maximum profits.
And if you want to make sure your prices are optimized for maximum profitability, we recommend using Dexter — a simple yet flexible Shopify app to help you run price tests and find the best prices for your products.