Do Holiday Shoppers Turn into Loyal Customers?

Allison Howen
by Allison Howen 21 Nov, 2013

There is no doubt that the holiday season is a hectic time for business owners, but it can be a rewarding time too. In fact, a recent Constant Contact study reveals that more than half (52 percent) of small businesses (SMBs) claim that the new customers they obtain during the holidays actually end up becoming repeat, loyal customers in the long run.


Furthermore, the study proves that customer loyalty pays - with 82 percent of the surveyed SMBs claiming that loyal customers are the number one way to grow their business, followed by online marketing tools (66 percent), a stronger economy (50 percent) and skilled employees (47 percent). But how exactly does a business earn loyalty? According to the study, 90 percent of SMBs earn loyalty by offering great products or services, 60 percent earn loyalty through sustained customer communications via email and 49 percent earn loyalty through social media channels.


Conversely, when it comes to the challenges of growing a business, 30 percent of the survey respondents claim that finding new customers is the biggest obstacle. Next on the list was a lack of time (23 percent), followed by the economy (16 percent) and a lack of funds to invest in growth (10 percent).


"Eighty-two percent of small businesses reported new customers find them through referrals, meaning satisfied customers are one of the most important drivers of new customer acquisition," says Gail Goodman, CEO of Constant Contact. "Creating meaningful customer engagement, from attracting new customers to keeping loyal ones happy, remains a top priority."


Unsurprisingly, the best time to grow a business is during the second half of the year. In fact, the study found that 59 percent of the surveyed businesses claim that between a quarter to half of their overall annual profits come during their single busiest season, which for most respondents is around the holiday season in either fall or winter. Other noteworthy stats take a closer look at the strategies of SMBs during the holidays. For example, 31 percent of the respondents start planning for the holidays two to three months in advance, while 28 percent don't plan at all for the busy season. For those that do plan, the study shows that in-house marketing is the primary focus for 41 percent of respondents, followed by 35 percent who increase online and in-store promotions and 21 percent who order advance inventory.


Also worth noting is the respondent's opinions on Small Business Saturday, which is the day after Black Friday when shoppers are encouraged to support their local SMBs. The study found that 34 percent of respondents have participated in Small Business Saturday in the past, and 77 percent of those respondents plan to do so again this year. According to 79 percent of the respondents, the main reason they participate in Small Business Saturday is for increased awareness, followed by the day's delivery of new customers (45 percent) and the quick boost in sales it can provide (43 percent). Of the 66 percent who have not participated in this day, 36 percent don't think participation will result in an increase in business.


"B2C small business owners are optimistic, with 65 percent expecting their 2013 revenues to exceed those of 2012, but it's clear the holiday push is critical," says Goodman. "Those small businesses that take the time to prepare and participate in holiday promotions end up coming away with a new set of loyal customers. So, if small businesses take a long view of the holidays, they'll see their efforts as an investment in customer growth and retention, and they'll reap the rewards of their efforts."