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How SMEs can maintain momentum post-Christmas

December 8, 2023
in Business
How SMEs can maintain momentum post-Christmas
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About 95 per cent of businesses in Australia are classified as small-to-medium businesses, and many of them are approaching the busiest time of the year – one that effectively bolsters their coffers for the year ahead. 

We undertook a survey of SMBs and consumers in the US (a market which mirrors Australia’s) and found that 75 per cent of retail/ecommerce SMBs rely heavily on holiday sales to meet their annual revenue goals, while 50 per cent of SMBs get at least one quarter of their annual revenue from holiday shoppers – though that number jumps to 73 per cent for SMBs in the retail/ecommerce space.

But part of the reason this Christmas sales period is so critical, particularly this year, is because of two reasons facing Australian SMBs at the moment: an uncertain economic climate, and understaffing, which impacts the business’ ability to develop a sales and marketing plan for the new year.

When it comes to economic headwinds, SMBs are facing a gale. Recently Oxford Economics Australia revealed that, after population growth is accounted for, real spending is actually falling, with an economist commenting that “you could say we’re in a per-capita recession at the moment”. 

And recent ABS Retail Trade data, backs up this analysis, revealing that sales rose two per cent year-on-year to $35.87 billion in September. However, that figure was boosted by cafes, restaurants, and takeaway sales, which rose 6.1 per cent to $5.45 billion, while food sales jumped 3.5 per cent to $14.16 billion.

It’s clear that consumers are prioritising the essentials such as food and beverages amid the cost-of-living crisis, which makes sense. But it’s not great news for SMBs selling consumer goods, particularly post-Christmas. 

Which brings us to the next issue facing SMBs: budgets to execute. It’s tough out there and going up against large competitors who can afford to reduce their margins makes for a more challenging post-holiday sales period. Many SMBs  don’t have the resources, expertise or the budget to do much by way of sales generation or marketing. 

Our research shows that while 81 per cent of consumers are more open to receiving marketing messages from a small business after visiting or buying from them during the holidays, less than half (49 per cent) of shoppers receive an email after making a purchase, and 27 per cent never hear from the business again. And while 93 per cent of SMBs agree that retaining new holiday customers into the following year is important, just 18 per cent feel their Q1 strategy is highly effective, and 14 per cent have no retention strategy at all. 

So, while most SMBs are heavily focused on reaching new customers and growing their contact databases during the Christmas lead-up and rush, many of those new customers aren’t being nurtured once the calendar flips to December 26 or beyond. 

How can they fix this?

The most successful SMBs we’ve worked with change up their marketing tactics in the new year to focus on further engaging the new customers they’ve acquired. Many will dial up their loyalty programs, events and contests to activate their audience and turn Christmas shoppers into repeat buyers for the following year.

Yes, many don’t have a marketing function, but marketing tools exist which are built (and priced) specifically for SMBs. Some AI-driven tools can even create entire email campaigns including copy, SMS campaigns and social posts with images. And some of these tools cost less than the price of a bag of coffee beans. 

Small business owners think they have to do it themselves, because they’re the CEO, CFO and every other role in their business, and – when faced with tough economic conditions – many think they need to reduce spend.  However, budget cuts should not impact on the ability to reach loyal customers or engage with new ones. 

Counterintuitively, SMBs need to ramp up (not down) their marketing and engagement strategies, particularly when the cost to do so is more affordable than ever with the right technology and toolsets available. The discretionary spending pie is shrinking, and SMBs need to get the word out about their offerings to maintain a slice. 

Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Dynamic Business – https://dynamicbusiness.com/topics/news/how-smes-can-maintain-momentum-post-christmas.html

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