New customer acquisition in a world of Black Friday offers - how much should you be giving away?

With more brands deciding to ‘go early’ on their Q4 offer, it’s definitely time to start finialising the details of your end of year offer. If you’re looking for a whopping great big spike to wind up a successful year, and critically, to set up a strong year ahead, getting your offer right is imperative.

If you’re heading for a big Black Friday / Cyber Monday /wider Q4 you’ll have been prepping your campaigns for months and will hopefully be rubbing your hands in excitement at the prospect of watching all your careful planning pay off.

But…. one critical element that we want you to ask yourself is… ‘Have we got the offer right?’

The offer, or discount, that brands advertise over the peak festive shopping season is the sole reason that our audiences are in full shopping mode over those precious weeks. No decent offer, no big end of year spike. And possibly most importantly, no influx of new customers.

Whether you go for tiered offers, serving different audiences with different savings or value adds, change your offer as the sale goes on, or stick with a blanket offer, you need to be sure that it’s resonating… particularly with your new customers!

New customer acquisition - what is a new customer worth to you?

Understanding the lifetime value of a customer is something we work on with clients regularly, and is key to us building campaigns which deliver the best growth opportunities for brands.

Let’s take a fictional pet supplies brand called Woofingtons. They know that their average order value is £50, and at that value their Cost Per Acquisition (CPA) on ads needs to stay below £12. However, once Woofingtons calculated their Customer Lifetime Value to be £280, they realised they could afford for that £12 CPA threshold to be much higher. Measuring your customer acquisition cost against customer lifetime value reflects brand loyalty and is more meaningful than looking at every purchase in isolation.

But why would you want your acquisition costs to go up?

Fair question, in an ideal world, you obviously don’t! However, the fewer constraints you have on your campaigns, both in budget and in target results, the more opportunities you have to open up campaigns and reach new customers. 

The ability to maximise those new conversions is key - you know they are going to pay off in the long run as they become repeat customers and, with your customer lifetime value in mind, flexing the threshold on that CPA could build a lot of more business. Using Google Ads as an example, raising Woofingtons’ CPA threshold from £12 to £20 would really open up the volume of business that Google will bid for. Well managed, you can then find a sweet spot between the volume and the cost; customers may be slightly more expensive but you are getting a lot more of them and with sound retention - and that’s great business!

What does this have to do with your Black Friday offer?

Everything! Your offer is part of your CPA, so when deciding on the offer it’s easy to work out what you can afford to knock off…. but what if you looked at it from a different angle and asked yourself, how many new customers can we afford not to acquire?

Done strategically it can be a customer acquisition race to the top rather than just a discounting race to the bottom!

Back to our fictional dog supplier. These guys know on average a new customer is worth £280, they know the ad costs of nudging the on-platform threshold that would be built into the offer. They also know that their biggest competitors last year had offers ranging from 20-35%. This is the moment to assess whether going for a bigger offer still will leverage new customer volume and bring greater returns for 2025.

In short, with good customer retention, an understanding of the long term value the average customer represents, and goals which measure your offer against longevity rather than a one time hit, Black Friday offers can be a game changer - bringing in new business, hitting the all-talked-about Q4 spike, but also building growth for the year ahead.