Differentiate, Don't Discount, To Drive Customer Loyalty
Every year a Friday in November is greeted with scenes of panic buying, scuffles in supermarkets and news outlets going into overdrive.
The cause isn’t Ebola or an imminent hurricane; it is Black Friday. A day when all marketing best practice and customer marketing is abolished.
The traditional post-Thanksgiving retail-fest has made it’s way to the UK and all most high street brands are falling over themselves to get in on the act.
But it’s a terrible idea and, in the case of bricks and mortar retailers, is only bad news for customer loyalty and customer experience. Here’s why.
Reward The FewThere is no customer strategy.
The proposition of all Black Friday promotions is that they are WIGIGs (when it’s gone, it’s gone). They are therefore products in short supply and available to only a small number of consumers.
The retailer is unable to control who is ‘lucky’ enough to benefit from the promotion and is likely to reward deal-hungry, highly promiscuous customers over loyal, long-standing customers or customers who have the potential to become loyal or long-standing.
There’s no targeting or understanding of customer needs or behaviour. Just a complete focus on price.
A value destroying customer experience
No one who witnessed the crowds and riot-like scenes at certain branches could argue that the retailer delivered anything but an appalling customer experience.
And in the vast majority of cases the promotions will have been value destroying - they will have cost the retailer to promote and, due to the shocking customer experience, won’t have led to other, un-promoted products being purchased across the store.
One Time Visits
A retailer may be willing to sacrifice short term value in the expectation that it will generate repeat visits or ongoing customer loyalty.
A blunt price promotion does little to promote a repeat visit. The best that you can hope for is that it improves perceptions of your brand’s value and pricing.
But when your competitors, and indeed the whole retail sector, are shouting the same message at exactly the same time it is high unlikely that you will move the dial on your perception.
You Become A Value Brand
Your brand is reduced to competing on price - you're not demonstrating that you compete on any other dimension.
And is the implication that you are only price competitive on one day rather than having everyday low prices (EDLP)?
So Is It Such A Terrible Idea?
It certainly is for bricks and mortar retail. Value-destroying, poor experience-delivering promotions have never been a recipe for success.
It could make sense for an ecommerce brand in driving new customer acquisition and, potentially a good experience that engenders some form of consumer loyalty and repeat visit.
However, a cursory glance at social media suggests that, with the notable exception of Amazon (who also invented Black Friday), many ecommerce websites struggled under the weight of traffic.
And this points to the fundamental problem: if you are unable to meet basic customer needs and expectations and to get the basics right, then you are highly unlikely to win any customer loyalty.