You may be so over wrapping paper and rush orders by this point, but successful online shop owners know they aren’t finished with the holidays until they’ve done a thorough review of what worked and what didn’t during the holiday season.
This will give you the information you need to refine your marketing and product offerings for 2017’s holiday season, and it can help you retool your marketing, fulfillment, and shipping practices ahead of late-winter and spring gift-buying holidays like Valentine’s Day, Mother’s Day, and graduation.
Define your business holiday season
First, decide what period you’re including in your holiday review. There’s no official definition of the holiday shopping season, but many retailers start with Black Friday and end with Christmas Day, New Year’s Day, or another date in that range. Use the same date range for all the elements of your checklist below.
Review your holiday sales data
The best way to start is to prepare a profit and loss statement just for your holiday sales period. If you’re not already doing P&L statements, now is a good time to start. Over time, these documents can show you whether your business is growing, shrinking or stuck in place. QuickBooks offers a free P&L template here.
While you’re looking at your sales numbers for the P&L, make a note of your:
- Total holiday season sales
- Peak days for transactions
- Peak days for sales totals
- Best-selling items
- Worst-selling items
- Average transaction amount
- Most common billing ZIP codes
- Most common shipping ZIP codes
- If you offered holiday promo codes, percentage of transactions that used them
- If you offered a free shipping deal, percentage of transactions that used it
- If you offered gift wrap (free or paid), percentage of transactions that used it
These numbers will help show you which products and offers performed best, which areas contain most of your customers (and gift recipients), and how your daily transactions and sales totals compared to other times of the year.
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Calculate your holiday sales season costs
This information can go into your holiday season P&L sheet. Remember to include seasonal expenses such as:
- part-time help
- gift-wrap and additional shipping supplies
- higher payment processing and fraud-prevention costs
- seasonal print and/or digital advertising costs
If you paid for holiday-season print or digital advertising, be sure to include it in your total, too.
Review your customer feedback
Round up all the holiday-season reviews left by your customers on social media and review sites, customer survey results, and feedback from emails and calls, and you’ll get a sense of how well you served your holiday shoppers.
- Where did you excel?
- Where can you improve?
- What were the most common questions from customers?
Take the time now to sort out any unresolved customer issues to bolster your reputation, maintain those relationships, and save time next holiday season.
Think about how you spent your time during the holiday sales season
Being busy due to holiday sales is a good problem to have, but being too busy can harm your customer service, order fulfillment, reputation, bottom line, and even your personal life. Ask yourself:
- Did you have enough time to manage your business during holiday sales peaks while still answering customer questions and dealing with problems as they arose?
- If not, how can you head off those problems next holiday season?
The solution might be as simple as streamlining your packing and shipping processes. Or it may be that you need to hire seasonal help during holiday sales peaks.
Evaluate your holiday season profit (or loss)
If you made a solid profit during the holidays, scored great reviews from your customers, and had time to manage your business well during the rush, congratulations! You won the small business holiday trifecta.
If you were overworked, you can start planning to hire help for next year, and if your reviews were only so-so, you have a roadmap for delivering better customer service.
What if your sales, reviews, and time allocation were good but you still didn’t make a profit, or didn’t make as much of a profit as you’d hoped? In that case, it’s time to review pricing and costs to see where you can make adjustments. Pay special attention to these areas:
- Packing. If you sell and ship fragile or delicate items, your packing supply costs will increase along with your sales. Shop around for better prices on boxes, tape, bubble wrap and other must-haves, and hold onto recycled packing materials for peak sales times.
- Shipping. If you offer free shipping, make sure the cost is built into your product prices. If shipping rates are proving to be a turnoff to your customers, compare your carrier and delivery speed options along with the costs of tracking and insurance. There’s no reason you can’t offer shipping options with more than one carrier if those options will cover your customers’ expectations at rates they’re willing to pay.
- Advertising. Track your ad results very carefully to see which types of ads converted customers and which types underperformed. Going forward, focus just on the ad types that worked.
- Pricing. If your shipping, advertising, and other costs are as low as you can get them, sales are strong, and you’re still not profitable, consider that your pricing may be too low across the board. As a small business owner, you’ll never be able to compete with retail giants on price, but you may be able to outdo the competition on customer service. In fact, that’s what experts recommend. The Harvard Business Review in 2015 noted, “Perhaps the most successful retailers this holiday season will be the ones who compete on customer experience.” Make sure your customer service is excellent, then raise your prices and monitor the results.
The good news about making cost and price adjustments now is that you have plenty of time to test and refine them before Black Friday 2017. Consider Valentine’s Day, Mother’s and Father’s Day, and graduation season early test runs for improvements to your business, and get your business ready for the 2017 winter holidays.