Should your SaaS site run a Black Friday promotion?

I spent the last few weeks exploring this question, digging into the data, and talking to teams.

The Black Friday offer itself in SaaS is fairly uniform: 30-50% off annual deals (for the first year). Over 80% of the BF offers I encountered were in this format.

So what did I find?

Summary: For VSB/SMB focused SaaS with an average annual contract value below $8,000/year and a churn rate above 3.5% MoM, running a Black Friday deal on your site is likely beneficial.

What I found about these deals is the following…

1) BF site promotions convert best as a pipeline accelerant. The best application is to take interested, but price-sensitive customers, and get them over the line. As such, running retargeting to a page with the BF offer is ideal over just showing the BF offer globally.

2) They are good for cash flow (especially if churn is high). By running the promo, you lock in the customer for a year. We find that high churn brands (SMB focused brands with churn of >3.5% MoM) benefit from the additional time to establish value.

3) Churn is +8% (annually) in customers who take BF deals (and closer to +15% for cold traffic that takes BF offer). A major contributing factor here is the large price hike once a 50% discount falls off in year 2. The majority of brands I am looking at or talking with only offer the BF discount for year 1.

4) They hike up on-page conversions. We find that brands see anywhere from a 3 - 8% increase in annual purchases from BF site banners and homepage promotions.

5) No change from promotion countdown timers. Looking at dozens of promos with a countdown time and without, I saw no statistical difference in lift or subsequent churn vs. a regular banner without.

Have you run a Black Friday banner on your website? What was your data on it?

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