While your customers are accumulating gifts and consuming food this holiday season, you should do the same—but with data.
As the year ends, it’s easy to drag our feet a little and wrap everything up as an annual report. But that won’t give you a clear representation of your holiday performance; that won’t give you actionable insight to take with you directly into the New Year.
Yes, you’ve got your revenue and gross margin, but how did you get that number? Which campaigns were successes and which were duds? Where did the customers come from? How long did they stay, and did they return for more? How can you get the full picture of your business during the holidays?
Below are a few performance indicators that will offer insight that revenue alone simply can’t.
1. Average Order Value (AOV)
During the holiday is when customers bundle up and buy in greater quantity. AOV is a key performance indicator that is directly impacted by your marketing efforts and ability to cross-sell and upsell in the checkout process. Promotions such as free shipping thresholds, coupons, and loyalty campaigns—which play an important role during the holidays—might help increase that number.
Now is the time to see if those incentives are working. If you don’t notice a spike in the AOV during the holidays, it may be worth examining what specifically went wrong. AOV can be calculated by summing the dollar value of all of your approved sales and dividing by the number of approved transactions.
2. New Purchases vs Repeat
Acquiring and retaining customers is a balancing act, and it doesn’t change during the holiday. What does change is the competitiveness between different companies. While loyalty may play a role during this time of year, promotions and discounts may be more influential. If your competitors are offering better deals or customer service for a similar product, shoppers—old and new—will likely go there.
So as always, you want to make sure you are putting attention to both acquiring and retaining. Not only that, you should also remember that new purchases made during the holiday is possibly made with gift-giving intention. How will you get those shoppers to return to get something for themselves after the holiday season?
Your ability to attract repeat sales is a direct reflection of your customer retention efforts. Ensure you provide responsive customer support, promptly fill orders and provide refunds in a timely fashion.
3. Funnel Abandonment Rate
Unlike shoppers at physical stores, online shoppers will add items to their cart and then just drop it and leave without any hesitation. No need to put the items back or even give an explanation. Shoppers online tend to research a number of other companies, comparing products and prices at the same time. While they do this all year long, the issue of shopping cart abandonment is magnified during the holidays.
If you notice that your funnel abandonment rate has increased during the end of the year, it should give you some indication that your checkout process is too lengthy, your site does not evoke any urgency, or the overall experience is just not up to par. Some changes need to be made.
4. Subscriber Growth
Accumulating leads is a necessary step towards conversion. So don’t diminish the job you did marketing your brand and growing your roster of subscribers.
Even if those new subscribers, followers, and fans don’t buy anything from you during the holiday, it’s good to know that they are interested. Now the next time you have a great promotion or the likes, you can let them know. Your subscribers are the top of your sales funnel; increasing this metric increases the likelihood of more passive visitors converting to active, paid customers.
5. Acquisition Channels
Knowing where your visitors are coming from this holiday season will give you a sign of which channel is most of effective, and therefore where your customers are hanging out. Whether you are offering coupons, announcing exclusive promotions on Facebook, or sending out email newsletters, you want to know which method is most effective.
Being able to attribute sales to acquisition channel will also provide more insight into your Cost per Acquiring a Customer.
Customer satisfaction matters, even if they end up returning the product for a refund. But that doesn’t mean it’s painless. Holidays are a prime time for sales and it’s often followed by a refund period. An increased number in returns might seem like you are offering a crappy product that people don’t like, but that might not be the case. Increased returns are just the nature of having good return policies that make customers feel confident that at the end of the day they’ll get what they want. While you don’t want your refunds % to grow year over year, seeing it as a little blip in the radar during this time of the season may help you get some insight on your customers.
Tracking the success of your business during the hustle and bustle of the holiday season is important for every aspect of your business. Knowing that the business is heading in the right direction during this peak time of year is critical to how your business will tackle the year ahead.