Elastic

I’ve been banging the drum in this newsletter on the concept of value-led buying for a month or so now.

One of the reasons, I suppose, to keep on this topic is that BFCM is a huge value-led buying moment. It’s become commonplace to discuss how much “worse” customers are when they’re acquired during BFCM, but, when I look at KNO data, I come to a different conclusion. Most customers acquired during BFCM sales are just driven by value. And they rarely see that type of value again.

Despite the cultural narrative around gift buying during BFCM, our KNO data from past years shows that nearly 3/4 of all purchases aren’t made for anyone else; they’re made for the person making the purchase.

Add to that the fact that people buying from a brand for the first time during BFCM often have known about the brand for much longer than normal, it seems highly likely that a good deal of customers acquired during BFCM are price-elastic customers. They’re more willing to buy when the price more heavily changes in their favor.

If that is, in fact, the case then it’s worth asking how many other times per year those customers can find a similarly good deal on your product.

The answer? It’s unlikely they can.

When we started looking into this concept of value-led buying after Prime Day, we looked at the average discount percentage by holiday. Nothing comes close to matching BFCM.

The question, then, is what to do about it.

If you’re willing to acquire a customer at a specific discount, are you willing to retain them at that same discount? Or would you prefer to only sell to them once?

The answer to this question likely adjusts your 1) retention strategy and 2) BFCM sales strategy. And with Labor Day right around the corner, you have an ability to test run any changes you want to make.