A Post-Cyber Monday ROI Checklist
Marketers are told that they have to offer customers discounts and promotions on “Cyber Monday,” the Monday after Thanksgiving. By doing so, they create a lot of media hype.
For the finance folks, their jobs begin the day after Cyber Monday. They analyze the profitability of the event and the future profitability of the customers who purchased on Cyber Monday.
With this in mind, let’s go through a checklist of attributes that you need to analyze to understand whether Cyber Monday was profitable or not, from a customer standpoint.
- New customers. Determine if Cyber Monday customers are new to your brand or if existing customers are purchasing during the fabled e-commerce shopping holiday. When existing customers dominate Cyber Monday purchases, pay close attention to rebuy rates during the next three weeks to see if your customers come back and buy again, or if they were only interested in discounts. If new customers dominate Cyber Monday, compare annual repurchase rates to customers acquired during all other time periods. Many brands find that customers acquired on Cyber Monday yield different long-term value metrics.
- Discounts. Segment the Cyber Monday buyers who purchased items that you featured in “Buy One, Get One Free” or “Doorbuster” promotions. Customers who purchase promotional items are often less loyal than customers who purchase merchandise at full price.
- Cannibalization. A thorough cannibalization analysis is critical to measuring whether Cyber Monday was effective. If your customers would have purchased on Cyber Monday regardless and all you did was give away margin dollars, then your online holiday promotion failed to deliver profitable results. Carefully analyze customers and the items they purchased to understand whether or not you gave away the store for no good reason.
Online vendors and media outlets benefit by promoting Cyber Monday; it's important that you benefit, too. Just because customers are purchasing on Cyber Monday doesn’t mean you're generating incremental profit. Carefully analyze results, measure return on investment and understand whether this e-commerce holiday is truly beneficial to your brand.