Love it or hate it, Black Friday weekend is coming up fast, and it's no longer just a retail thing. Here's everything SaaS businesses need to know to make the most of the year's greatest sales opportunity, starting from the top:
What is Black Friday?
Black Friday is one of the busiest shopping days of the year, with the Black Friday and Cyber Monday (BFCM) sales taking place across the weekend after Thanksgiving.
It’s been around in the US since at least 2005, and was picked up all over the globe. Soon after, we welcomed Cyber Monday and Cyber Weekend, moving on from a focus on retail to include the high demand for online searching and shopping.
With this weekend-long introduction, we’ve seen a steep increase in Black Friday sales year on year, for all business types. 📈
Why Black Friday is important for SaaS businesses
While Black Friday was always particularly well-known as a big day for retail shopping, digital and software companies were quick to see how it positively impacted their sales and revenue too.
So, what exactly do Black Friday and Cyber Monday have to offer the SaaS industry in particular?
Here are four reasons why it’s important for SaaS businesses:
The biggest sales opportunities for software
Software companies tend not to get involved with Christmas or January sales, so BFCM is the weekend of opportunity for SaaS providers to win a substantial spike in new customers. Our data shows that sales peak on Cyber Monday at 10am (UTC) for software sellers. That’s a whole weekend of climbing numbers 📈.
We’ve also seen that those who offer a discount on Black Friday (and across the full weekend) sell significantly more than those who don’t. We’re talking about 7x the amount of orders, leading to around 6x the typical revenue.
So, to SaaS businesses everywhere: doing something is always better than doing nothing.
A lot of the publicity is done for you
Think of Black Friday and Cyber Weekend as an annual marketing campaign, except, there’s no need for you to promote the date thanks to the reputation it already has. It’s a standard entry in the annual diary, talked about by many.
One weekend, one hell of a sale for your customers, one big opportunity to boost your revenue.
All you need is to promote the right offer with the right messaging. Stay tuned for our top marketing tips, tricks, and tactics.
Expand your customer base
We always say it, but who doesn’t love a discount? Proven by the popularity of the volume discount pricing strategy within the SaaS world, discounts have shown a positive impact on revenue growth from new customers - Black Friday and Cyber Monday sales being no exception.
Is it just a US thing? Nope.
Taking place in most large markets around the globe, BFCM is an opportunity to gain more $$$s in a short amount of time, but also to expand your customer base for the long haul. Just remember, retention is key.
Longer customer lifetime value
Speaking of customer retention, our data shows that those who subscribe via a Cyber Weekend deal have a longer lifetime value (CLV). This will positively impact your MRR - boosting your revenue well beyond just the BFCM sales weekend.
Black Friday customers will feel inclined to stay with you and make the most of their subscription if you’ve given them a good deal for your product or service. Plus, they would be less likely to churn at the risk they don’t get the same level of discount again.
More on how to retain your old and new customers further down. 👇
How to get ready for BFCM
Right, so what does this mean for SaaS businesses like yours? Now you know the clear benefits of taking part, it’s time to make your BFCM plan.
Here are our top tips and tactics on how to prepare for Black Friday and Cyber Monday:
Our main top tip for Black Friday is to start early.
We mean it. There’s a reason we started talking about it in August - we don’t want you wasting a very big opportunity for revenue gains.
Starting early gives you more time to make noise about your Black Friday offers. It’s time to up the communications; social, email, and website content will all help to get the buzz going.
We’ve got a few more pointers on the comms side of things later on in this guide. ✏️
Segment your audience
You’ve got to remember that your customer base can’t all be put under the same umbrella. To get the most revenue, customize your discounts to the specific customer.
Ideally, you want to split your customers into segments of where they are in the customer journey:
- Customers who trialed your product but never purchased
- Customers who entered the checkout but never purchased
- Customers who churned recently
- Customers who churned a long time ago
- Existing customers
- New customers entirely
To apply this, your comms can come in the form of different email marketing flows for each segment, different target ads, and/or different landing pages.
Consider different styles of campaigns
If you’re new to the BFCM game, whether you just haven’t thought about it before or because you’re a newly launched business, you won’t know for sure what’s going to work for you and what isn’t. Experimentation is key to figuring this out.
On top of creating varying campaigns for different customer segments, it’s worth experimenting with different styles of campaigns too.
For example, the length of your campaign. Here’s a secret: your sale can go beyond Cyber Weekend.
Razeware is a great example. They realized there was no reason to stop at the typical four days, and chose to expand the campaign to fourteen days.
They saw a 30% increase in revenue as a result.
Create specific landing pages for Black Friday
Some of the best Black Friday campaigns we’ve seen over the years have invested time and energy into creating compelling landing pages. This page (or pages) should be highly visual with calls to action that emphasize that the discount you’re offering is a once-in-a-year opportunity.
Use it in your social media and Google Ad promotions to clue your audience up on what to expect over Cyber Weekend.
Another top tip: put a countdown on the page to create a sense of anticipation and urgency closer to the time.
Keep your creatives crystal clear
Make sure what your offering is clearly presented across your landing page. You want to highlight price points and discounts in a clear and appealing design.
Check out digiDNA’s imazing.com and how they clearly portray the savings their users will be making - you want them to act fast after all, not wait for them to get their calculators out.
And don’t stop there.
Think about your Black Friday creatives across all the platforms you use to promote the sale: the website itself, but also across your social media, forum presence, and e-marketing campaigns too.
Having clarity and continuity throughout your campaign will help with your brand awareness so those users know when and where to return to, and what to expect when they click Buy.
Retain old and new customers
At the end of the day, the perfect discount - Black Friday or not - comes down to understanding your customers, what your company represents to them, and their willingness to pay.
This counts for capturing both prospective customers and existing customers. That’s right - while Black Friday is typically known as a means of acquiring new customers, you need to make sure your existing customers feel valued too. Here are three ideas for doing just that:
- Offer discounts for upgrades or add-ons: One easy way to encourage your existing customers to upgrade their subscriptions or packages.
- Consider where to apply your discount: Some SaaS businesses offer BFCM discounts to subsequent renewal billings, as well as to the checkout.
- Introduce sneak sale previews: This can be exclusive to existing customers or new email sign-ups to reward loyalty prior to the big Black Friday event itself - apply a lower or more limited discount to the official BFCM offer, for example.
Be ready for the big day itself
It’s not all about the lead-up to the day, you’ve got to make sure your payment and billing process is 10/10. The last thing you need on the day is a checkout that causes failed payments or a payment experience that drives customers away.
What you do want is the maximum amount of revenue coming through to your business, and here’s how to help guarantee that:
- Streamlined checkout process Not only do we mean an easy-to-use website and localized checkout, but also making sure that your coupon or discount codes are already applied to make the transaction as easy as possible for these potential (and hopefully, soon-to-be) customers. This will help the realization of the great offer and push them to click “buy now” or “subscribe” even faster.
- Support team on hand For the times that might not go quite as planned, have a support team on hand to cover questions, queries, and all that jazz. Customer care is all part of the process when it comes to acquisition and retention, and with this being one of the busiest days of the year for retail and online shopping, it’s not a day you want people (or revenue) to slide through the net because they couldn’t get the support they needed.
- Specific B2B care and communications With Black Friday landing towards the end of Q4, be aware of timing when selling B2B, especially and to enterprise businesses.
We’ve already mentioned the benefits of running the campaign for longer than just four days, with Razeware seeing a change of 30% more revenue keeping it live for two weeks. Another tip from Chris at Razeware is the idea of keeping communications open to make sure corporate approvals can go through, even if it’s past the campaign period.
The offer of holding a discount to work to their timings of budget approvals and new quarter planning will put you a level above your competitors.
What to offer in your SaaS Black Friday sales
Time to think about the deals you want to offer and how you’re going to promote them.
So, what’s the optimum offer for optimal revenue?
There are a few things to consider to maximize your revenue:
- The length of the discount campaign
- The product or products you’re discounting
- The amount of discount you’re offering
How long to run your Black Friday discounts for
We already mentioned the benefit of extending your discounts beyond Cyber Weekend, with Razeware proving significant success with a 30% increase in revenue.
But how do you know what length of Black Friday campaign will work for your business?
It’s a game of experiments, but after witnessing so many of our sellers see a real increase in their annual revenue by pushing their Cyber Weekend sales across a two-week period, we fully recommend trying it out.
It doesn’t have to be the same discount rolled out across the fourteen days though 👀 - more on that idea in a minute.
Where to apply your discounts
First things first, what - or how many products - will your discount apply to? You’ve got a few options to go for here, and some will work well for your business, others won’t.
There are three main approaches to discounting:
The blanket approach: Discount equally across your product range, eg. 50% off every product.
The legacy discount: Offer high discounts on older or less-popular products to increase your user base and upsell potential further down the line.
The flagship discount: Discount only your best-selling products, as seen with Renderforest’s Black Friday pricing below.
What discount to apply
Our data shows the best performing Black Friday discount is between 30% and 40%, but this can also be impacted by your product’s price point.
We suggest something along the lines of:
- If your product sells at <$10: high discounts
- If your product sells at <$10 and >$100: lower discounts
- If your product sells at >$100: high discounts
As mentioned, you don’t have to stick to the same discounts throughout your campaign. Take the opportunity to experiment by changing them up for each of your segments over the time period, eg. a deal per hour, or a deal a day.
How to promote your Cyber Weekend deals
Okay, so you’ve probably already got the hint that you need to start early with your Black Friday planning and promotions. ✅
Here’s what to think about when it comes to communicating your offer:
- Social media: Get the creatives going and consider partnering with influencers in your field to help promote your page and your upcoming offers.
- Display advertising: Consider BFCM banner ads on your social media and website, as well as the potential of paying for them to be hosted on other relevant websites too.
- Email marketing: Round up the troops with email marketing - but don’t forget segmentation to make sure your customers are receiving content that is relevant to them.
- SMS marketing: If you’re a SaaS with an app, consider SMS marketing and push notifications to make sure your current customers know about the deals that apply to them.
- Loyalty schemes: Consider the idea of rewards like VIP sale previews or extended sales to keep your existing customers happy.
What to do after Black Friday
Once the day, weekend, or 14-day campaign is over, what comes next?
Sales tax compliance
You need to make sure your sales tax compliance is in tip-top order, otherwise, you will very quickly lose out on your Black Friday revenue gains, thanks to heavy fines and penalties. You could even risk prison.
For more on global sales tax and avoiding those hefty fines, check out our ultimate guide to sales tax and selling internationally.
Review your results
Once your campaign is over, it’s time to see how well it did. With proper tracking and reporting in place, as well as the knowledge of which SaaS metrics to use, this will help you figure out what worked, what didn’t, and how to better your campaign for next year.
Metrics to help you measure the success of your Black Friday campaign include:
- Churn rate: The amount of customers that churn after the discount has ended - whether voluntarily or involuntarily.
- Monthly recurring revenue (MRR): The amount of recurring revenue won and retained through Black Friday subscribers.
- Customer lifetime value (CLV): The value of each of your Black Friday customers during their subscription.
- Customer renewal rate: The percentage of these customers that take out a new subscription after their current contract has expired.
- Customer acquisition costs (CAC): The cost in acquiring Black Friday buyers to compare with the value they bring to your business.
- Willingness to pay: Evaluate your customers’ willingness to pay to factor into next year’s Black Friday.
Head over to our complete guide to SaaS metrics right here.
Start thinking about your next BFCM campaign
Use your insights and analytics to plan for the next Black Friday sales. This should help you narrow down your experimentation with discounts and marketing to bring in the most amount of revenue for your business over the busy SaaS sales period.
Here are some of the questions you should be asking yourself:
- Are you profiting from your Black Friday efforts?
- How much are people willing to pay for your product on Black Friday?
- What is the churn rate of your Black Friday customers?
- What can you do to improve your conversion rate for these customers to pay full price?
- How can you best prove your product value to ensure a smooth conversion?
- What would your customers like to see more of next year?
Now you’ve read our full guide to Black Friday, we’ll let you get on with it. Best of luck!