5 mistakes that could ruin your holiday sales

By Joanna L. Krotz

Welcome to the serious selling season. Are you ready?

Holiday sales typically represent half of retailers' yearly sales and as much as 75% of their annual profits. Other marketers, such as caterers, travel agents, restaurateurs, party planners and the like, also depend on holiday business.

Today's consumers are value-conscious, demanding and now accustomed to multi-channel shopping options, from mail order to phone, fax, cable TV and the Web, even in-home or office. Retailers must do everything right or buyers will walk.

Whether you are ready for the holiday season or not, marketing missteps can occur all too easily during the make-or-break selling weeks. Second chances are hard to find.

So in planning your holiday sales strategies, don't make this season's five worst marketing mistakes.

Mistake No. 1: Betting too heavily on discount pricing.

Increased competition and dollar-conscious buyers make many retailers assume that discounting is the way to ring up holiday cheer. But cutting prices, especially early in the season, only cannibalizes year-round sales as customers wait to buy. Discounting also eats into holiday profits.

Price-driven marketing further pits small retailers against high-volume giants such as Wal-Mart and Costco — a contest that small businesses are sure to lose.

Instead, during the holidays, turn customer service into your competitive asset. Make sure all customers are greeted and waited on when they enter your shop, which is always important, but particularly key for Christmas. Customer service has become so poor that people are actually surprised when they find good service. That's an opportunity for smaller retailers.

Simon Sinek, a strategic marketing consultant based in New York, suggests retailers market a shopping experience. "Instead of having people approach holiday shopping with dread because of the long lines and lots of dough, turn it in a fun experience," he says.

Mistake No. 2: Spending too little on advertising.

Looking to cut costs, many retailers slash holiday advertising budgets. But you can't gain market share without market recognition.

Granted, the proliferation of channels and clutter makes it hard to figure out which advertising will work nowadays. "TV and other media can be very inefficient," Sinek says.

But that means you must get smarter, not more passive. Invest some time and resources in researching the kind and frequency of marketing that will build results for your business. Also consider the idea of hiring advisers to help develop an appropriate strategy.

You might, for example, create momentum for a holiday campaign that combines timed print ads with direct mail and then opt-in e-mail (sending unsolicited e-mail, of course, is another really bad mistake). Don't forget search-engine advertising.

Most marketers add holiday products, wish lists and content to Web sites for the season. "Each time a retailer adds content to their Web site, they need to optimize it for search-engine performance, including keywords, meta tags and page titles," says Sharron Senter, a Boston-area marketing consultant.

Mistake No. 3: Marketing to some customers and not others.

You need to get a handle on the demographics and buying patterns for customers in each of your sales channels.

Customers who like to touch, feel and buy in the store are usually different than online buyers. Those customers are different from people who pick up the phone in response to catalogs. "Retailers shouldn't skimp by marketing to only one group," says Rick Segel, author of Retail Business Kit for Dummies. Tailor your holiday promotions to motivate each of your customer segments.

Of course, that's only possible if you've built a customer database and kept it up-to-date all year, so make it a priority year-round.

Mistake No. 4: Overlooking feedback.

It's important to monitor customer e-mail and queries. That's much easier for online sales. You can quickly find out, even in real time, whether visitors are buying, when shopping carts are abandoned and so on. Then you can refine your offerings or navigation.

Set up a system to track results, one that takes advantage of Web analytics and usage reports.

Offline, if promotions or ads aren't pulling. Don't keep blindly running the same ads and promotions. If there's time, test-drive your marketing or direct-mail packages and find the ones that draw your best customers.

Mistake No. 5: Forgetting last-minute shoppers.

Shoppers are buying gifts and services later and later in the season. "More and more purchase decisions are made with just-in-time urgency," says Jay B. Lipe, author of The Marketing Toolkit for Growing Businesses. "Companies need to account for this in their inventory, labor and marketing functions," Lipe says. Plan to ratchet up promotions for last-minute specials and products in order to attract the growing wave of late shoppers.

Then, too, don't assume it's all over on Dec. 25. There are growing numbers of gifts exchanged for Kwanzaa and for New Year's.

And you should be prepared for those after-holiday sales that can also boost your selling season.

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