<ol> <li>Lure customers in with freakish deals (a.k.a. doorbusters/loss-leaders).</li> <li><strong>Expose them to more profitable/better offerings that rival their target buys.</strong></li> <li>Strengthen business with more profits.</li> </ol> <p>For instance:</p> <ol> <li>"Item X for $50!"</li> <li>Customer sees Item Y, which is <strong>better</strong>/<strong>nicer</strong>/<strong>more</strong>-<strong>profitable</strong>.</li> <li>Customer chooses Item Y instead.</li> </ol> <p>The ideal result is the company sells more profitable items than the unprofitable ones.</p> <h2>What Smarter Companies Do First</h2> <p>Speculating that the above will happen = gambling (results in a net profit growth of zero if done over the long-term).<br /> <br /> BOO.<br /> <br /> The financially-smarter companies would do this instead:</p> <ol> <li>First, test an intended campaign with a sample group -- e.g., 1000 prospects -- with (a) the freakish-unprofitable deal, and (b) a profitable deal.</li> <li>See what buys result from the test.</li> <li>If the test results in <strong>ideal profits</strong>, promote and run with the campaign on Black Friday (or some other large scale campaign).</li> </ol> <p>That is:</p> <ul> <li>'We're okay with losing $ on Item A.'</li> <li>'The marketing of Item A however will bring in more customers, which allows us to expose more prospects to the better/stronger/more-profitable rival, Item B'</li> </ul> <h2>And If All Else Fails</h2> <p>The shady trick:</p> <ol> <li>Stock a super limited supply of Item X. </li> <li>Promote the %$#@ out of it to attract large numbers.</li> <li>When the first 0.01% buys Item X, the store will expose the other 99.99% to the profitable Item Y instead.</li> </ol> <p>(More numbers. More pitches. More sales.)</p> <h2>The Cumulative Results.</h2> 2009-11-27T03:26:54-08:00 true 884 how-companies-make-money-on-black-friday 0 2009-11-27T03:26:54-08:00