The holiday shopping season is well underway (OK, one week underway) and results are mixed. I’ve heard that sales were better than expected on Black Friday, but still dismal. And Cyber Monday sales were up from last year, but that was expected. And consumers are looking for bargains and discounts. So what’s a retail entrepreneur to do?
For the answers I turned to one of the smartest entrepreneurs I know, Gail Goodman, chairman, president, and CEO of Constant Contact, one of the nation’s leading providers of e-mail marketing services. We talked about some of the things retailers and e-tailers should do now to give holiday sales a needed jolt.
Rieva Lesonsky: The early forecasts were for a dismal holiday shopping season. Preliminary results are in and they’re mixed. What would you suggest small retailers and e-tailers do to boost holiday sales?
Gail Goodman: While the forecasts [predicted] the sales outlook for this holiday season would be gloomy, retailers and e-tailers can look upon this time of uncertainty as an opportunity to cement customer relationships, expand their businesses inexpensively, or offer new products and services tailored to meet these times. Just because we are in a recession, doesn’t mean you should give up or cut back on marketing during the holidays. Instead, you need to continue to market smarter and spend your marketing dollars more efficiently.
E-mail marketing is an inexpensive method of marketing, yet it delivers a great return. It can help entrepreneurs effectively communicate with their existing customers, even if they need to cut back on marketing to new customers. Focusing on existing customers [helps] ensure repeat business and more predictable revenue. Marketing to your current customer base keeps your biggest fans engaged in a low-cost way. And a happy customer is your best source of referrals as they can attest to your value to their friends and colleagues. You should, of course, know your customers’ interests. For example, if you own a sporting goods store, learn which activities your customers enjoy and send them appropriate promotions.
Lesonsky: What about free shipping? When we’ve talked in the past, you said there was a “best time” to offer it?
Goodman: This year, with consumers looking for bargains, you should be continuously offering free shipping. This year, merchants will need to be more creative in their offers. Think of offering free gift wrapping, especially to a male audience. Special offers can be used to nudge customers with an immediate and attractive call to action as the holidays quickly approach.
Lesonsky: How many e-mails constitute a holiday campaign? Is there a number where the customer gets annoyed?
Goodman: Yes. You can overcommunicate. And it will hurt your relationship with customers well beyond the holiday season. Some will unsubscribe from your list and others will simply start tuning your e-mails out, although customers are used to a slightly higher frequency during the holiday season. While we generally recommend no more than once a month most of the year, you can send 3 or 4 times over the holiday season. We do not recommend more than once a week, and it’s best if your promotions are at least 10 days apart. Watch your click-throughs, unsubscribe rates, and customer feedback closely and let that be your guide.
Lesonsky: As we’ve discussed, consumers are looking for bargains now. Should retailers lead with their best prices or offer discounts as we get even closer to the holidays?
Goodman: Normally, I recommend holding off on your best discounts but this year I would lead with a strong offer. Retailers, both big and small, have come out swinging and you cannot afford to be left out in the cold. Retailers should carefully determine what makes sense for their bottom lines before determining what discounts to offer.
Lesonsky: What about beyond the holidays? Going into 2009, what would you recommend entrepreneurs do to stay afloat?
Goodman: Even though the rough economy is a reality, the talk of doom and gloom can become a self-fulfilling prophecy, too. You need to keep the business going but you may need to pull back on some spending, be more selective about your investments. More than ever, you need to make sure that what you invest in hits the mark. Consider surveying your customers to understand what products and services they really value from you and where they plan to keep spending in a tough economy.
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