Seasonality Tips for SMEs
When scheduling in sales and marketing activity for an SME, business planners like predictability. With a reliable, stable set of sales and market insight data that doesn’t fluctuate too much each year, allocating budget to promotional activity and forecasting sales figures may feel relatively straightforward.
However, for hundreds of thousands of SMEs in the UK, safe, reliable predictions are not a part of the sales equation. That’s because their products and services depend on seasonality, and making sales in a seasonal business requires a special set of skills and unique considerations. For some businesses, their entire sales model depends on running seasonal promotions, while for others a cultural event may simply represent a small opportunity to increase revenues.
Regardless of which end of the spectrum your business falls, this article could help spark some ideas for you around how to manage seasonality. We’ll be touching on what seasonality is, what it means to SMEs, and how business professionals can upskill to make the most out of holiday events.
What is seasonality
Within a business context, the term ‘seasonality’ pertains to seasonal events, and it’s most frequently used in discussions around how business and consumer behaviour changes during these periods.
Exactly what constitutes a seasonal event can be vague, with events ranging from national holidays such as Christmas and Valentine’s Day to smaller annual awareness days like Pancake Day, but there are universal truths to the formula behind how businesses handle them.
Core components of this formula include customers, dates, sales plans and technology – and here are our tips on how to maximise your business’ effectiveness in each of these areas.
Tips around managing a seasonal business
1. Market research is key
If your core goal for an upcoming seasonal event is to sell as many products as possible, then it’s key to equip your business with the latest and greatest insights into your customer bases’ shopping habits.
With you have a good understanding of the main channels through which they have made purchases in recent years, it should be possible to make a reasonable prediction as to which channels hold the largest revenue opportunities within an upcoming seasonal event – although it’s important to factor in any new technologies or cultural shifts that could affect this.
For example, there has been a huge uptake in ecommerce since the arrival of Coronavirus, which saw many new customers take to online shopping at the expense of brick-and-mortar stores.
Consequently, developing new digital strategies ahead of the next seasonal selling period could yield good opportunities for businesses that have made the transition to ecommerce.
2. Forecasting cash flow
Other important types of data to obtain include how long the upcoming seasonal shopping opportunity is likely to last for, on which day seasonal interest is likely to peak, and how projected revenue opportunity fluctuates throughout the period – which you can inform with data from previous years.
Why, though, is this data useful? Because it could enable you to build out a cash flow forecast that calculates your business’ appetite for cash during your promotional activity. This may include factors such as how much stock you’re likely to need, staffing considerations, as well as marketing spend across all of the relevant channels.
A robust cash flow forecast could help your business avoid the very real possibility of running out of stock during a key selling period. Furthermore, it may give you the flexibility to ramp up advertising activity if you spot that competitors are outbidding you for ad space.
3. Track competitor activity
The only way you’ll know roughly what your competitor’s activity is, though, is if you look for it. That’s why our next tip is to build a competitor tracker that’s detailed enough to give you useful insights, but not too detailed that it detracts from crucial time you need to spend on other business priorities.
Having a general idea of which channels competitors operate in and what their messaging is across different channels could help you sense-check your own work. To take this one step further, you could look to understand how competitors are running integrated, multi-channel campaigns – and incorporate learnings from this research into your own promotional plan.
4. Refine your promotional calendar
Our fourth and final tip is around building out a strong promotional calendar, and to refine your messaging at different touch points.
In today’s digital world, it often isn’t good enough to simply communicate promotional offers to customers on the day of an event. Instead, getting the ball rolling early with your messaging, and building a campaign that drives awareness before conversions may prove to be a more effective and modern approach.
Consequently, you may do well to build out a promotional calendar that details exactly when you’ll start rolling out each separate piece of campaign messaging. This could be a phased approach, and you can consider how different channels are best suited to achieve marketing objectives.
For example, you could reach out to your existing customer base through content marketing; utilising blogs and newsletters to make them aware of the exciting activity you have planned while building a general association in their minds between your brand, and ‘New Years’ in the build-up to a seasonal event. These customers may then be more likely to convert when exposed to tempting sales messaging.
Ultimately, seasonality is often an unpredictable and challenging beast for businesses to handle, but it’s best managed by capturing as much relevant data as possible, forecasting with great care, and having an intelligent and targeted promotional plan that hits prospective customers with the right messaging, at the right times.
How could Rapid Cash help?
At NatWest Rapid Cash, we understand that properly managing cash flow is a key driver of success for the majority of businesses – including those reliant on seasonal promotions. These businesses need to invest intelligently, and must be ready to spend when opportunities arise. That’s why we offer an innovative financing product that is designed to help businesses invest for steady, gradual growth.
If eligible, the Rapid Cash solution can integrate with your accounting software, and it could offer you a line of credit that enables you to take out a cash advance against your outstanding invoices. Our flexible product allows you to choose which of your invoices you’d like to borrow against, and it could mean that you don’t have to wait 30, 60 or 90 days to be paid. If you’re interested in learning more about Rapid Cash, read about how our solution works.
To be eligible for Rapid Cash you must be trading for more than 6 months, have an annual turnover of at least £100k and either be a Limited Company or Limited Liability Partnership in England and Wales. Additionally, you need to invoice other businesses and use one of the following digital accounting software: Xero, Quickbooks, Sage 50, Kashflow, FreeAgent and NetSuite. Security and guarantee required. Product fees may apply.