With the holiday season upon us, 82% of small businesses surveyed last month by Constant Contact indicated that loyal customers are the No. 1 way to grow their companies, followed by online marketing tools (66%), a stronger economy (50%), and skilled employees (47%).
How do these companies earn that loyalty? Well, 90% said by offering a great product or service; 60% cited sustained customer communications through email, and 49% through social media channels.
Growth is defined differently among small businesses:
57% of respondents defined business growth as more revenue
More customers (40%) was the second most-cited definition of growth
Expanded inventory placed a distant third at 1.5%.
Other definitions included more employees, expanded space in current location, and more locations.
Nearly 30% of respondents said finding new customers is the biggest hurdle to achieving growth, trailed by lack of time (23%), the lagging economy (16%), and a lack of funds to invest in growth (10%).
“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,” Gail Goodman, CEO of Constant Contact, said in a press release. “Creating meaningful customer engagement, from attracting new customers to keeping loyal ones happy, remains a top priority.”
What’s more, the survey found the second half of the year to be particularly critical for revenue growth, with 31% citing fall and 31% citing winter as their busiest seasons. Just how critical? Nearly 60% of the B2C businesses surveyed said between a quarter and a half of their overall annual profits comes during their single busiest season.
For small businesses, according to the survey, the holiday season is a hectic but rewarding time – 52% of survey respondents said that new customers attained during the holidays become repeat, loyal customers. While 31% of those surveyed start planning for the holidays between two and three months in advance, it is surprising to find that, with all that’s at stake, 28% don’t do any advanced planning for the holidays.
In-house marketing is the primary focus for small business holiday preparations, with 41% of respondents increasing such activities; 35% increase online and in-store promotions; and 21% order advance inventory.
Is Small Business Saturday gaining traction? Thirty-four percent of those surveyed said they participated in Small Business Saturday in the past and three-quarters (77%) plan to do so again this year, citing the increased awareness (79%), delivery of new customers (45%), and quick boost in sales it can provide (43%) as benefits. However, of the 66% who have not participated in previous years, more than half will again choose to pass, with 36% saying they don’t think they will get more business from it.
“B2C small business owners are optimistic, with 65% expecting their 2013 revenues to exceed those of 2012, but it’s clear the holiday push is critical,” Goodman said. “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.”