Maximizing ROI on Holiday Marketing: Where to Spend and Where to Save for Small Business Owners
The holiday season is a make-or-break period for many small businesses. It's when sales can skyrocket, but so can marketing costs. Many small business owners wonder where to invest to see the best return on investment (ROI) in their holiday marketing—and where they might cut back without losing customers. With some thoughtful planning and strategic budgeting, you can get the most out of your holiday marketing dollars. Here’s a practical guide to help you decide where to spend and save to maximize your marketing ROI.
1. Use Past Data to Guide Your Spending Decisions
Before setting your holiday marketing budget, take a look at what worked in previous years. What channels or promotions brought in the most business? With additional capital from a loan, you’ll have more flexibility to invest in the areas that delivered the best results in the past.
Customer Behavior: Did people find you through social media, search engines, or your email newsletter? Knowing this can help you focus on where your customers are already spending their time.
Conversions and Sales Metrics: Review metrics like conversion rates (how many people who saw your marketing actually made a purchase), average order value (AOV), and return rates.
Seasonal Trends: Look for patterns. If certain products or services were particularly popular last year, feature them prominently in your marketing this holiday season.
2. Where to Spend: Invest in High-Impact Marketing Channels
Not all marketing channels deliver the same results, so it’s important to focus on the ones that work best for your small business. Here’s where you’re likely to see the most return:
a. Paid Search and Social Media Advertising
Investing in ads on platforms like Google, Facebook, and Instagram can give you high visibility and attract new customers during the holiday season.
Google Ads: Many people search for gift ideas or deals directly on Google, making it a great place to promote your products or services. Businesses typically make $2 for every $1 spent on Google Ads.
Social Media Ads: Platforms like Facebook, Instagram, and TikTok are especially popular for holiday shopping, with many users actively looking for holiday deals.
b. Email Marketing to Engage Loyal Customers
Email marketing gives you direct access to people who are already interested in your business, and it’s one of the most cost-effective ways to generate sales. In fact, email marketing can yield an average of $36 for every $1 spent.
Exclusive Offers: Send special holiday offers to your subscribers—they’re more likely to buy from you than new customers.
Abandoned Cart Reminders: People often get distracted while shopping. Reminding them about items they left in their cart can increase sales by around 10% during the holiday season.
Urgent Deals: Flash sales and limited-time offers can prompt people to make purchases sooner, which is key during the holidays.
c. Retargeting Ads to Convert Interested Shoppers
Retargeting ads focus on people who have already visited your website but haven’t made a purchase. These ads serve as a reminder to return to your site and are generally 70% more effective than standard ads.
Dynamic Retargeting: Show ads for the specific products people viewed on your site, making it easier to remind them of items they’re already interested in.
Cross-Platform Retargeting: Show these retargeting ads on different platforms—such as Google and Facebook—to reach customers wherever they spend time online.
3. Where to Save: Lower-Impact Marketing Channels
Some marketing channels tend to have lower returns, so they’re ideal areas to cut back. Here’s where you can save and focus your budget where it matters most:
a. Organic Social Media Posts
While it’s helpful to post on social media, relying solely on organic (unpaid) posts during the holidays may not bring in the best returns. Due to increased competition, the reach of organic posts often drops during the holiday season.
Focus on Brand Awareness: Post regularly to maintain your presence, but if you’re looking for immediate sales, lean on paid ads instead of organic reach.
b. Traditional Offline Advertising (Print, Billboards)
For most small businesses, digital marketing is generally more effective than offline methods like print ads or billboards. These tend to be more expensive and harder to track, so unless you’re in a high-traffic location, you may want to save your budget here.
Consider Only for Local Traffic: If your business relies heavily on local customers, small-scale print ads or local sponsorships might still be effective. Otherwise, focus your spending on digital channels that allow you to reach a broader audience.
4. Use Data to Stretch Your Budget
Smart budget management can help you achieve better results without spending more, but a small business loan can also help you go further with your budget. Here are a few ways to stretch your budget:
A/B Test Your Ads and Offers: A/B testing lets you try out different ad messages, images, and offers to see what people respond to best. By testing and improving as you go, you can focus more of your budget on high-performing ads.
Social Media Ads: Test different ad styles, like video vs. image ads, to see which format brings in the most customers.
Discounts and Offers: Try various offers, like a percentage off vs. free shipping, to see what resonates most with your customers.
Use Analytics Tools to Track Results in Real Time: Tracking your results helps you know what’s working and what’s not. Use tools like Google Analytics and Facebook Insights to see where your holiday traffic is coming from and which ads or emails are bringing in the most sales.
Adjust Your Budget as Needed: If one type of ad or promotion is performing better than others, allocate more of your budget to it. This can help you avoid wasting money on lower-performing efforts.
5. Plan Your Holiday Timeline: Spread Out Spending
According to the National Retail Federation, nearly half (45%) of holiday shoppers plan to browse and buy items before November. Spread your holiday marketing budget over a few months to reach early and last-minute shoppers alike.
October to Early November: Focus on brand awareness and building excitement.
Black Friday & Cyber Monday: These are big spending days, so ramp up your budget for promotions that encourage customers to buy.
Mid to Late December: Target last-minute shoppers with “last chance” offers and promote gift cards or expedited shipping options.
A small business loan can open doors for holiday marketing, providing the capital to run effective, high-ROI campaigns. By spending on the most impactful channels and focusing on data-driven results, you’ll not only cover the cost of your loan but maximize your holiday season profits. Define clear goals, keep track of your success, and use every dollar strategically. With these tactics and a holiday loan, you’re on your way to a profitable holiday season.
Here’s to a successful and joyful holiday sales season!
Customer Behavior: Did people find you through social media, search engines, or your email newsletter? Knowing this can help you focus on where your customers are already spending their time.
Conversions and Sales Metrics: Review metrics like conversion rates (how many people who saw your marketing actually made a purchase), average order value (AOV), and return rates.
Seasonal Trends: Look for patterns. If certain products or services were particularly popular last year, feature them prominently in your marketing this holiday season.
Google Ads: Many people search for gift ideas or deals directly on Google, making it a great place to promote your products or services. Businesses typically make $2 for every $1 spent on Google Ads.
Social Media Ads: Platforms like Facebook, Instagram, and TikTok are especially popular for holiday shopping, with many users actively looking for holiday deals.
Exclusive Offers: Send special holiday offers to your subscribers—they’re more likely to buy from you than new customers.
Abandoned Cart Reminders: People often get distracted while shopping. Reminding them about items they left in their cart can increase sales by around 10% during the holiday season.
Urgent Deals: Flash sales and limited-time offers can prompt people to make purchases sooner, which is key during the holidays.
Retargeting ads focus on people who have already visited your website but haven’t made a purchase. These ads serve as a reminder to return to your site and are generally 70% more effective than standard ads.
Dynamic Retargeting: Show ads for the specific products people viewed on your site, making it easier to remind them of items they’re already interested in.
Cross-Platform Retargeting: Show these retargeting ads on different platforms—such as Google and Facebook—to reach customers wherever they spend time online.
Focus on Brand Awareness: Post regularly to maintain your presence, but if you’re looking for immediate sales, lean on paid ads instead of organic reach.
Consider Only for Local Traffic: If your business relies heavily on local customers, small-scale print ads or local sponsorships might still be effective. Otherwise, focus your spending on digital channels that allow you to reach a broader audience.
A/B Test Your Ads and Offers: A/B testing lets you try out different ad messages, images, and offers to see what people respond to best. By testing and improving as you go, you can focus more of your budget on high-performing ads.
Social Media Ads: Test different ad styles, like video vs. image ads, to see which format brings in the most customers.
Discounts and Offers: Try various offers, like a percentage off vs. free shipping, to see what resonates most with your customers.
Use Analytics Tools to Track Results in Real Time: Tracking your results helps you know what’s working and what’s not. Use tools like Google Analytics and Facebook Insights to see where your holiday traffic is coming from and which ads or emails are bringing in the most sales.
Adjust Your Budget as Needed: If one type of ad or promotion is performing better than others, allocate more of your budget to it. This can help you avoid wasting money on lower-performing efforts.
October to Early November: Focus on brand awareness and building excitement.
Black Friday & Cyber Monday: These are big spending days, so ramp up your budget for promotions that encourage customers to buy.
Mid to Late December: Target last-minute shoppers with “last chance” offers and promote gift cards or expedited shipping options.
