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What Are Small Businesses Doing Wrong During the Holidays?

by Matt Winn  |  
November 24, 2014

As more holiday shopping shifts to the e-commerce space, online businesses have an opportunity boost their bottom line and make this year a big success. However, online small businesses face a unique set of challenges that introduce potentially big barriers for them to have their fruitcake and eat it, too.

In a recent holiday readiness report from Volusion, online small businesses indicated that their top challenges this holiday season include determining the right marketing mix and competing with big-box retailers, such as Amazon.

With tighter budgets and limited staff, how small business owners invest their marketing dollars is paramount to achieving a profitable holiday season.

Small online retailers focus on acquisition yet opt for retention-based marketing channels. When asked their primary marketing objectives for the holiday season, 52% of respondents state they're equally focused between customer retention and acquisition, and 40% indicate their main goal is customer acquisition. That means that 92% of smaller retailers will be working to acquire new customers as part of their holiday strategy.

Though the push for customer acquisition is an understandable one (it costs 6-7 times more to acquire a customer than to retain one), the viability of this goal in light of tight budgets comes into question.

The Wrong Marketing Mix

To complicate matters even more, many small businesses have selected a marketing mix that doesn't align with their goal of attracting new customers. Small businesses instead opt to invest time and dollars into channels better served for customer retention.

When respondents were asked which marketing channel they plan to place the most emphasis for the holidays, they replied...

  • Social media marketing (35%)
  • Search engine optimization (24%)
  • Email marketing (24%)
  • Paid search/pay-per-click advertising (10%)
  • Shopping feeds/comparison shopping engines (4%)

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Matt Winn is senior marketing communications manager at Volusion, a provider of e-commerce software and shopping cart solutions.

LinkedIn: Matt Winn

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