January is traditionally known as the time where consumers cut back on their spending. Resolutions are made, and budgets are drawn up; meaning nights out are switched to nights in, with a tight control over all outgoings.
It’s no wonder consumers cut back – on average, a typical household will spend an extra £500 in December. For businesses, this isn’t the best of news. Whilst extra sales in the run up to Christmas is exciting; sales can drop considerably in the new year. If businesses aren’t prepared for that slump, then it can lead them to seriously think about their future.
Personally, I don’t believe that January needs to be as bleak as it’s made out to be. You can’t fight the fact that sales will decrease, but you can make use of that downtime and set yourself up for the rest of the year. Here are five tips I believe all businesses should consider, to help them successfully tackle the sales slump in January.
Like the rest of the population, January is a time for businesses to set their budgets. Whilst it can be tempting spending those Christmas profits, don’t. Hold them back, so that they can fund slower months (like January); or use them to reinvest in the business elsewhere.
Your budget may well be tighter in January, so you can focus on all the free things you can do, that will be of benefit to your business.
One of those focus areas is marketing: in particular, SEO and content marketing, both of which are free.
Put some time aside to conduct an SEO audit of your website, so you can identify keyword gaps, and then write targeted content.
Alternatively, writing a batch of blog posts or drawing up social media content plans are both free aspects of marketing; but take up time. If you can get these done in January, it means you have one less thing to think about when sales pick up.
Plan for the year ahead
January is a year for reflection, and you should put this downtime to use and draft your business plans for the coming year.
From the budget you have drawn up, you can then allocate expenditure to different areas. Think about your marketing strategy: perhaps 2018 is the year you want to try PPC for the first time?
January is also a time to consider where you’d like your business to be this time next year. Perhaps you’re an online retailer, but have dreams of opening your own store? Review the costs and logistics associated with this, so you can spend the year taking steps in the right direction.
Encourage online reviews
The new year is the perfect time to follow up with all recent customers, asking them to leave you a review. Whether it’s a Google review, Facebook or even Trustpilot; every positive review left will be beneficial for you.
Research by Econsultancy found that 77% of UK shoppers read reviews before they purchase a product. So, encourage those extra sales in 2018 by building the number of positive reviews your business has.
And if you get a bad review? The most important thing you can do is reply. No one wants their complaint to be ignored. Even a simple “sorry to hear this, please can you send us an email with more information and we’ll look into it” will be fine. Whilst you don’t want the whole thing to be played out in the public eye; you still want everyone to know that you’re taking action.
Money will always be tight for consumers in January; with expenditure significantly reduced over the month.
Help to encourage sales by offering a promotion or discount in the new year. You may decide to hand out an exclusive 20% discount to all customers who purchased in December; or roll out an email in January offering 10% off everything.
Even something like a free gift can help to draw in extra shoppers, who need a valid incentive to spend.
Prepare for returns
You’ll no doubt have seen an increase in sales over the festive period, but you need to be prepared for the above-average rate of returns come the new year.
With the season of gift-giving officially over, it’s inevitable that many recipients will be heading straight to the shops to return their presents.
No matter whether you’re an online business or have physical stores, you need to be prepared for this rush.
If you have a physical store, you may want to change the layout, placing impulse buys at the front to encourage extra spending. Alternatively, online businesses may choose to provide a £5 voucher, that can be spent in February.
To conclude, I believe that whilst you won’t be able to fight the January sales slump, you can certainly embrace it. If you fail to prepare for the downtime, then your business may well struggle. However, I find these five tips to be very effective, as they see my business through January, ready for the pick up of sales in February.
David Teasdale is an SME business director.