The takeaway
A BFCM subscriber is not one sale but a standing order that draws stock again in December, January and February. Forecast units per SKU for each renewal cycle using expected retention and failed-payment rates, then check that your unit cost still clears the price at the depth you plan to offer. Raise the purchase order for the renewal cycles, not only for the weekend, before campaigns go live.
An example
Illustrative example: 1,000 new subscribers on a 30-day box, one SKU, using the retention rates from Cohort Order.
| Cycle | Order | Expected retention | Units to fulfil |
|---|---|---|---|
| Cyber Week (27 Nov) | 1 | 100% | 1,000 |
| December (27 Dec) | 2 | 74% | 740 |
| January (27 Jan) | 3 | 61% | 610, plus any winbacks |
| February (27 Feb) | 4 | 49% | 490 |
If the box sells at $36 on the first order and $48 from the second, and the unit cost is $24, contribution is $12 on order one and $24 after. At 50% off the first order the price would be $30, leaving $6, so you would want the bundle route from Box Tiers instead of a deeper cut.
Put it into practice
- Gather the inputs. You need the introductory and regular prices from Step-Down Discount, retention by order number from Cohort Order, your expected number of new BFCM subscribers, and variable cost per unit for each SKU in the offer. Without last year's retention, use your regular cohort's rates and note the assumption.
- Forecast units per SKU for each renewal cycle. Open Analytics → Forecast and filter to the products in the BFCM offer. Separate renewals in dunning from renewals expected to succeed, so the forecast reflects what will actually ship. [confirm with product: whether the forecast report splits by payment status.] Multiply expected subscribers by the retention rate for each cycle, as in the example, and add expected winbacks to January if you plan to run Winback by Reason.
- Check contribution at the planned depth. Subtract unit cost from the introductory price and from the regular price. If the first order barely covers cost, or a later cycle turns negative once shipping is included, reduce the depth or move the saving into a larger box.
- Raise the purchase order for December and January. Compare forecast units against stock on hand and supplier lead times, and order by 8 November so December's cycle is covered. Treat February as its own order rather than an afterthought.
- Check the forecast against real signups. After portal early access opens, compare actual new subscribers with the number you forecast and adjust the January order if the gap is more than you can absorb.
Watch out for
- Forecasting from weekend revenue. It counts first orders only; the renewal cycles are where stock runs short.
- Ignoring failed payments. Renewals in dunning may never ship. Counting them overstates demand and ties up cash in stock.
- Ordering only for December. The January and February cycles fall in your quietest cash months and still need product.
Measure the result
Track forecast accuracy per SKU: actual units shipped against forecast on each renewal cycle. Review after the December cycle closes and again after January. If actuals fall well below forecast, check failed-payment recovery and cancellation reasons before cutting the next order; if they exceed it, bring the February order forward.
Related entries: Cohort Order · Step-Down Discount · Box Tiers
Prompt: 11 Size the involuntary churn