“Half the money I spend on advertising is wasted; the trouble is I don’t know which half*.”
How was your Black Friday & Cyber Monday Sale?
Many businesses reported that this year Black Friday was easier than in 2017, more rewarding and even more fun.
If you’re underwhelmed and all you can say is meh and where did my ad spend go, it is normal. Statistically, for roughly 50% of you, it was probably not that great.
But how is it possible you may ask? This year you went all in! Your competitor only offered 25% off and you managed to squeeze a whole 30% (and free shipping!). Why there is no line outside your digital doors?
The truth is that consumers are used to seeing promotions and coupons everywhere and any price discount is a gamble with a 50/50 chance to succeed. 2015 benchmark report from UCLA has found that approximately 50% of all promotions end up losing money and fail to generate the intended lift in revenue because consumers got used to seeing discounts everywhere, and stopped believing the advertised prices and discounts.
However, working with hundreds of businesses, I can tell you that in this case, It’s not them. it’s you. It’s your transactional thinking and your addiction to immediate and measurable ROI, instead of a long-term strategic branding. We have all become addicted to basing our digital strategy on measurable metrics instead of investing in growth through awareness and brand recognition.
Black Friday has lost its luster
Black Friday is a remnant of an old economy, of transactional thinking that assumes that consumers are driven primarily by price so we simply need to offer them any product at the cheapest price possible, and they will buy anything and everything, because it’s on sale. But we see it again and again with big and small brands, that if you don’t invest in strategic top of funnel emotional branding throughout the year, your special promotions will most likely fail. Because sadly, your potential consumers simply won’t care enough about your brand to be interested in spending a slice of their holiday shopping budget on your products. It’s kind of like that distant friend with whom you never talk, but suddenly they invite you to their wedding (awkward and also expensive).
Brand thinking, on the other hand, facilitates irrational relationships between brands and consumers. Creates a love story that allows you to ask for irrational prices. Turns your customers into brand ambassadors who ignore the competition. Grows a community of evangelists who show off your clothing, write online reviews and engage in impassioned conversations around the dinner table. Brands that create enthusiasm and excitement, that create a tribe, and idea, rarely need special promotions, but when they do rarely go on sale that’s where the magic happens.
Do I have transactional thinking?
One of the major symptoms of transactional thinking is over-retargeting (a concept that was coined by my colleague Alex Afterman), which is simply relying too much on warm audiences and too little on acquiring new audiences, spreading your brand message, and bringing more people into your funnel. I get it, the warm bottom of funnel audiences are the most profitable and always present exceptional ROIs that we can proudly show our clients or our boss. However, if you don’t invest in expanding your reach, you’ll soon be running into audience exhaustion, and by the time you want to promote your special Black Friday sale, your warm audience has developed a fever from seeing your message so many times that they’re exhausted and annoyed and no longer interested in anything you have to offer.
Another symptom I see too often is stores and brands that failed to invest in any form of strategic branding throughout the year, suddenly appear on the Black Friday week ready to ride the wave of sales, expecting consumers to buy anything and everything because it’s cheap. Only to be disappointed by the high advertising prices and the general disinterest in their offer. These businesses lose twice, once by wasting all their budgets on promoting the sale and second time by teaching consumers no to buy from them in the future. Yes, research has shown that shoppers whose first purchase was induced by a discount are 50% less likely to make a second purchase because their purchase was motivated by price and not value.
The third symptom is relying too heavily on a single platform for digital advertising, usually the one with the highest ROI at the moment instead of strategically managing the entire funnel throughout all consumer touchpoints online. These brands and stores become what I call “platform famous”, stores that only sell on Facebook or brands that only active on Instagram. This is unhealthy and can create unpleasant situations, such as the Facebook advertising platform crushing three days before Black Friday this year, bringing too many eCommerce campaigns to a screeching halt, many of them never recovering. In fact, the most successful campaigns I’ve seen this year utilized Google Search, Display, Instagram and Facebook for a cohesive funnel, from top to bottom.
The last notable symptom would be neglecting platforms that are traditionally higher in the funnel such as Pinterest because they don’t convert as well in the short term because it is assumed that people are not visiting them in a buying mood. But, 93% of Pinners use Pinterest to actively plan purchases. The same study found that 96% use it to research and gather information, while 87% report that Pinterest has helped them decide what to purchase. The average order value from Pinterest referral traffic is $58, compared to $55 for Facebook. In fact, in categories such as fashion, home décor, and beauty, you cannot afford not to be on Pinterest and to engage with your audience long time before you ever offer them a special.
You’ve been doing it all wrong
Your addiction to maximizing ROI in every stage of the decision-making funnel is what fails your promotional campaigns and your digital advertising as a whole. You’ve been squeezing the last drops of conversions from the bottom instead of investing in creating an emotional brand, that will most likely not produce any monetary ROI on top of your funnel but your entire funnel will convert significantly better and produce much higher ROI.
Emotional branding is simply creating a consistent story together with your consumers. it’s a real, intense, heartfelt, eternal relationship between consumers and the brand. It’s a love-like promise to be there and allow them to express their values, treat them as people rather than buyers, provide them with an experience, inspire them to have dreams, help them to accomplish those dreams, create a shared community, help them to create stories with your product/service. Become part of their memories and grow to be an important part of their social life.
“But what about my ROI? Can you show me the ROI on love?”
For my pitch deck loving friends, this what happens to your bottom line when you invest in top of funnel strategic branding.
Your brand becomes top of mind and builds customer recognition. This means that when a customer is shopping for a particular product, they recognize your brand and automatically consider you as one of the top choices. People don’t like the unknown and consumers are far more likely to choose a brand that they know over something unfamiliar, even if they don’t know a great deal about your company at the time.
You can evolve, change prices and introduce new product easily. When you already have a strong brand and loyal customers, it is often easier and less expensive to introduce new products or test them out before you further invest in them. If you have a loyal brand following, your customers will often be interested in your new products and even anticipate them being released.
The recognition and elevation that emotional brands lend to a greater customer loyalty that is based on shared values. Brands allow people to tell their personal story and this is the reason why consumers are attracted to brands that they share values with. When you build an emotional brand, you need to convey these values to build a real and personal connection with customers. Brand loyalty often lasts a lifetime and even transfers to future generations.
Your products will become easier to buy. Meaning higher conversion rates, less abandoned carts, easier cart recovery, and lower retargeting budgets. Having a strong, well-known brand enhances your credibility with customers, and you’ll find that your credibility has a direct connection to customers ease of purchase. We want to buy from companies we like, know, and trust. In the world where only 2-4% of any ecommerce website visitors convert, if your brand is credible, you’re far more likely to get the sale.
Branding builds the fear of missing out (FOMO), the fear that others might be having an interesting and rewarding experience from which one absent or the fear of regret that one might feel if one misses an opportunity for social interaction, a novel experience, a profitable investment, or another satisfying event. When you invest in building a value-based personal connection, your customers will become less price driven and will accept higher premiums so you won’t have to rely on discounts to drive sales. And then, once in a while, on special occasions such as Black Friday, your audience won’t be able to resist the rare opportunity to save.
The advantage of emotional branding
The common notion among managers is that no other marketing instrument is better suited to increase sales volume quickly and effectively than price cuts and special events such as Black Friday. That’s why you see everyone offering the same exact promotion (25% percent off was the consensus among fashion retailers in 2018).
But, according to the Wharton School of Business Baker Retailing Center, promotions only benefit price-conscious consumers. But this practice is unhealthy for fashion retailers looking to grow both their brands and their bottom lines in the long run. Competing on price with deeper discounts is creating a race to the bottom, shrinking profit margins, and diminished brand value while making the path back to growth more difficult. “Once you discount you get into this spiral because your margins get slimmer, and then you also have to sell so much more to make up for the lost margin on the price. It’s sort of this vicious cycle that you get into.” On the contrary, emotional branding provides a competitive advantage by enabling distinctive associations that will increase your consumer’s satisfaction, increase their commitment to your brand, increase the ease of purchase, increase repurchase behavior and create loyal brand ambassadors.