Tactics > getting set for Christmas
Christmas stocking W
An operational Christmas checklist ith the busiest
season of the year approaching, and the forecasts for
consumer spending looking more and
By Will Lewis
more gloomy, now’s the time to take a long hard look at your plans for the autumn, and particularly Christmas, and make sure you’re getting the best value out of your budget and achieving your customer service targets, not leaking money through unnecessary expenditure. In the end, as with most things,
this is all about understanding the metrics of your business, having well communicated objectives and developing clear, coherent plans. Over the years I’ve witnessed some
great Christmas seasons and some which have worked, shall I say, less well. Here are a few key suggestions that you can use as your own checklist to help you cover the most likely areas you can improve.
Before identifying the issues to
focus on, it is a good idea to recognise that it’s now somewhat late in the day to start on “big” issues. You may feel that you can implement a new CRM system that will help you generate a massive sales increase or that some sophisticated automation in your warehouse could save you millions. You may be right, but you’re not going to plan, gain approval for and implement big projects like this in time to have them up, running and bedded down for this autumn. In fact, rushing into big projects
like this is more likely to cause you disruption and additional cost before you start seeing any benefits—and you really don’t want that in the busiest and most time critical part of the year.
So, what should you be focusing on?
1. Before you really start, have a look at areas of discretionary
spending and just ask yourself the question “do I really need to spend money on this?”. You may well have tackled this before, but it’s worth another look. Typical examples might
be things like free tea, coffee and biscuits at meetings, lunches or first- class rail travel. This all seems rather “petty” stuff, but make sure you know what it’s costing you and that you’re happy with it. “Every little helps” as someone keeps telling us!
2. Go through your budgets and look at those things that you spend
the “big money” on. These will probably be print, postage, carriage, marketing and advertising of one sort or another.
The key questions to ask here are:
a. Are you sure you’re getting the best price you can from your
suppliers? Have you checked prices against the competition recently? If not, do so and see what savings you can make. You may well be able to convince your existing suppliers to match the best prices you find.
b. Review the size and weight of anything you are mailing or
despatching. Are you optimising these to get the best tariffs?
c. Make sure you have clear objectives for what you’re expecting
your marketing activities to achieve. How much are you willing to spend to recruit a new customer? How much to reactivate a customer? How many new customers do you need to recruit? What percentage of existing customers do you need to purchase during the season? Is this more than last year? (For more on your Christmas marketing programme see “The recipe for a profitable Christmas” on pages 11-13.)
d. Review your mailing volumes. Do you know at what point in the
recency/frequency/monetary (RFM) analysis of your database you start seeing a negative contribution? If you don’t know this then you need to find out quickly. As a result, you may discover that mailing your entire database is costing you money, even if the overall activity is profitable. If this is the case then you can trim back on
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those sections of the database where the return is unacceptable and save yourself some print and postage costs.
e. Would you be better off mailing your best customers more frequently?
If you are mailing them less frequently than once every four to six weeks you probably would—and it’s certainly worth testing.
f. Do you understand what your online marketing is delivering? For
i. Your Google Adwords campaign may look like it is delivering a great
return, but if all this is coming from brand terms, which are cheap; you may be spending a lot of money on poorly performing keywords. Look at this and cull out the worst performing elements.
ii. Do you know how many of the orders that come through Adwords or
affiliates are from existing customers, who you’re already spending money on mailing catalogues to? Are you accounting for this “double cost” in your profitability analysis? If particular keywords or affiliates are generally attracting existing customers, consider removing these from the programme.
3. Is your operations infrastructure up to the challenges ahead? I’ve
already pointed out that it’s a bit late to start on grand projects but there are a lot of things you can do to kick the tyres in this area.
a. Do you have a clear plan for the season showing daily and weekly
volumes? Financial forecasts are useless for operations, it’s about how many calls, emails, items and parcels have to be handled, not what they’re worth.
b. Have these been communicated to all the individuals and departments
who will have to manage these processes and their feedback sought?
c. Remember that operations isn’t about averages, it’s about peaks, and
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