Black Friday customers expect high discounts of around 20-25% on average. While discounts increase conversion rates, they can reduce average order value and customer lifetime value. Black Friday customers convert more quickly with discounts but are generally less profitable long-term, with lifetime value around 30-40% lower than regular customers. Acquisition costs are also higher around Black Friday due to increased advertising spend and cost-per-click rates that are 1.13-2.75x normal levels. Overall profitability, measured as customer lifetime value over acquisition cost, is typically lower for Black Friday customers at around 50-90% of normal rates. Companies must balance lowering acquisition costs with the lower lifetime values from Black Friday customers to maintain adequate overall profit

1. Who is the
Black Friday
customer?

2. Arkadiusz Wiśniewski
Chief Executive Officer
at Sublime

3. Sublime Analytics Platform
{identifies}
growth opportunities
for DTC and e-commerce
brands
in Europe and US

4. {QUESTION}
What is the goal of Black Friday sales?

5. >> BF Profitability
It’s always about…
the money!

6. >> BF Profitability
BF Profit =
BF cohort
Revenue
BF cohort
Costs
/

7. >> BF Profitability
BF Profit =
BF cohort
Lifetime
Value
BF cohort
Acquisition
Cost
/
More on CLV / CAC HERE

8. {QUESTION}
How would you describe
the Black Friday customers?
Are they more expensive to acquire?
Do they spend more money?

9. BF cohort
REVENUE

10. Acquisitions
Black Friday Revenue Formula
>> Revenues
Retention Lifetime Value
CVR
Traffic
Discount
AOV

11. >> Discount
BF Customers expect high discounts
BF Standard
Average Discount Rate:
● Typical BF discount rates reach: 20-25%
● Discounts start as early as October and peak at Cyber
Monday
● The timing and amount of discount is category-specific:
○ Electronics: reaches 23,9%
○ Apparel: reaches 19,4%
○ Furniture: reaches 7%
Source: Sublime, Earthweb, Adobe
22,1%
10,9%

12. >> Conversion Rate
BF Customers convert much more eagerly
BF Standard
Average Conv Rate:
1,37 - 2,42x higher
● Increasing discount will result in higher conversion rate
● But only up to a certain point
Source: Sublime

13. >> Average Order Value
BF Customers will either order for less or
stock up
BF Standard
Average Order Value:
0,88 - 1,45x ratio
● Typically high discounts diminish Average Order Value
● AOV may rise during BF due to customers stocking up
on lower prices
● Free delivery thresholds can help maintain AOV during
holiday season
Source: Sublime

14. BF Customers are 40% to 90% less likely
to return
>> Retention
0% - 5% 5% - 15% 15% - 25% 25% - 50% 50%+
Discount rate
Retention
Rate
BF Standard
2nd order retention:
0,07 - 0,64x ratio
Source: Sublime

15. So how that impacts
Customer Lifetime Value?

16. >> Customer Lifetime Value
BF Customers are worth 30-40% less to
the business than regulars
BF Standard
Customer LTV (6
months) :
0,62 - 0,78x ratio

17. >> Other facts
Source: Sublime
● Less likely to subscribe (0.75x)
● More likely to purchase product sets (1,30x)
● Faster to convert
○ 20% less time to convert
○ 10% less interactions to convert
● Just as likely to subscribe to a newsletter
● More or just as likely to leave a product review (1.0-1.15x)
Black Friday customer profile

18. BF cohort
COST

19. Acquisitions
Black Friday Cost Formula
>> Costs
Blended CAC
Ad spend

20. Black Friday Cost Formula
>> Costs
CVR
Traffic
Blended CAC
Ad spend
CPC
Ad spend

21. >> Ad spend
Ad spend skyrocketing
Source: Adobe Analytics, https://business.adobe.com/resources/holiday-shopping-report.html
BF Standard
Ad spend:
2 - 4x higher
Source: Sublime

22. >> Ad costs
CPC (CPM) is increasing
● Ad costs increasing due to ad spend going up
● Affecting everyone (eg. telemedicine)
Source: Meta, Q4 2022
BF Standard
CPC (CPM):
1,13x - 2,75x ratio
Source: Sublime

23. What happens to
Customer Acquisition Cost?

24. >> Customer Acquisition Cost
Is CAC going up or down?
CVR
Traffic
Blended CAC
Ad spend
CPC
Ad spend
CVR
CPC

25. >> Customer Acquisition Cost
Is higher CVR > higher ad cost?
BF Standard
CAC:
0,75x - 1,5x ratio
Source: Sublime
● 𝚫CPC < 𝚫CVR => CAC↓
● 𝚫CPC > 𝚫CVR => CAC↑

26. BF cohort
PROFIT

27. >> BF Profitability
BF Profit =
BF cohort
CLV
(Cutomer Lifetime Value)
BF cohort
CAC
(Customer Acquisition Cost)
/

28. >> BF Profitability
CLV/CAC ratio is nearly always lower for BF
BF Standard
CLV/CAC:
0,5x - 0,9x ratio
Source: Sublime
● We aim to balance a CAC drop with
lower CLV from these clients
● But maintaining our usual CLV/CAC
level is challenging
● In practice ensure BF cohort's
profitability (CLV/CAC) exceeds our
minimum threshold

29. >> SUMMARY
≫ Discount is main revenue driver.
≫ Discounts significantly influence AOV, CVR, and retention.
≫ Discounts over ~20% don't increase CVR further.
≫ BF customers buy product sets more often (1.3x).
≫ Set a minimum profit (CLV/CAC) threshold -> earn less per client
but do the volume!
≫ Find a balance between lower CLV and lower CAC.
Key Conclusions

30. Run your own scenarios

31. THANK YOU
>>
>>
>>
youtube.com/
@usesublime
linkedin.com/company/
usesublime
https://usesublime.io