Holiday shoppers may be watching their budgets more closely this year, but that doesn’t mean small businesses have to compete by offering the deepest discounts.
In fact, their biggest advantages may be the things larger retailers struggle to replicate: personal relationships, distinctive products and services, local connections, and a genuine understanding of their customers. Constant Contact’s latest research shows 70% of holiday shoppers are actively looking for deals, yet the percentage of U.S. consumers who say they prefer to shop mostly at small businesses has nearly tripled since 2021.
I talked with Frank Vella, CEO of Constant Contact, about how small businesses can turn those advantages into holiday sales — without getting dragged into a discount war or trying to market everywhere at once. We also talked about where AI can genuinely save owners time, how to break through crowded inboxes and social feeds, and why the December sale should be the beginning, not the end, of the customer relationship.
Rieva Lesonsky: Consumers are expected to spend money this holiday season, but many are also feeling financially squeezed and looking for value. What does that combination mean for small businesses as they plan their holiday marketing?
Frank Vella: You’re right, and I’d put it simply: People aren’t spending less because they want to; they’re spending more carefully. High costs have turned everyone into a sharper shopper. Our latest Small Business Now research bears that out: 70% of holiday shoppers are actively hunting for deals, and about half of U.S. consumers (49%) have pulled back spending because of rising costs.
Here’s the part I love, though, and the part small business owners should hold onto: People still want to shop small. The share of U.S. consumers who say they prefer to shop mostly at small businesses has nearly tripled in five years, from 10% in 2021 to 27% in 2026. So, the job at the holidays isn’t to be the cheapest name on the list. It’s to remind people why you’re the one worth choosing: the product they can’t get anywhere else, the service with a face attached to it, the local connection a big-box store can’t fake.
Compete on Value, Not Price
Lesonsky: When customers are looking for deals, how can small businesses compete without getting trapped in a discounting war with larger retailers? What can they offer besides the lowest price?
Vella: Compete on value, not on price. On price alone you’ll lose to whoever has the bigger balance sheet, and that isn’t a race worth winning anyway. What a small business offers that a large retailer can’t is the personal stuff; you know your customer, you made the thing yourself, you’re part of the same community. The holidays are the time to lean into what makes you different: exclusive products, early access, a bundle, a complimentary service, a recommendation that proves you actually remember the person.
I’m not anti-discount, by the way. Our research shows 51% of small businesses that run holiday promotions say discounts are their single most effective revenue driver. The trick is to be deliberate about it. Don’t discount on autopilot across everything you sell; use a discount to give someone a reason to buy while protecting the value of what you make.
Lesonsky: Holiday shoppers are starting earlier and spreading their purchases over a longer period. How should that change when small businesses begin their holiday marketing — and how frequently they communicate with customers?
Vella: Holiday marketing used to be a single campaign you’d fire off around Thanksgiving. That’s over. Tighter budgets mean people are planning earlier, comparing more, and spreading purchases across weeks, so you have to start building awareness well before the rush. The goal I’d set is simple: stay top of mind without becoming background noise. That doesn’t mean carpet-bombing inboxes from October through December. It means a rhythm. You start with gift ideas and inspiration, build toward your sharper, more urgent offers as the shopping and shipping deadlines close in, and then keep talking after the sale, into January and beyond. That last part is the one everybody forgets.
Be Where Your Customers Are
Lesonsky: Small businesses have more ways than ever to reach customers — email, text, social media, search, and now AI-powered discovery. Where should a small business with limited time and marketing dollars concentrate its efforts this holiday season? What’s the ideal marketing mix?
Vella: Here’s what I tell owners who have an hour a day for marketing, not a marketing department: The answer is not to be everywhere. Being everywhere just adds costs and work you don’t have.
Pick the channels your customers actually pay attention to, and make them work together. Our research is clear on the mix: 49% of consumers worldwide now use social media to find new small businesses, which edges out search engines. And email is still the most direct, most reliable relationship you own with a customer. So, use social to get discovered; use email to deepen the relationship and drive the sale; use text sparingly, for the time-sensitive, high-value moments. Then take one good idea, a new seasonal product, say, and extend it across all three. One idea reused three ways beats three separate scrambles.
Lesonsky: Personalization has become a marketing buzzword, but what does effective personalization actually look like for a small business during the holidays? How sophisticated does it need to be to make a difference?
Vella: Personalization sounds like a big, expensive word. Swap it for a simpler one: relevance. A customer wants to feel like a message was meant for them, not like they’re line 4,000 on a list. And this is where a small business beats the giants, because you actually know your people. It can be as basic as “you bought this last year, so you might like this,” or sending one thing to a loyal regular and something different to a first-timer. Start with what you know about the customer; then let the technology scale that knowledge for you. The platform does the heavy lifting; you stay in the driver’s seat.
Use AI to Save Time — Not Replace Your Voice
Lesonsky: AI is making it much easier to create marketing content. Where can AI genuinely help a time-strapped small business during the holiday season, and where does relying on it too heavily risk making marketing sound generic or losing the personal connection that gives small businesses an advantage?
Vella: I’ll be honest with you: In all my conversations with small business owners, not one has ever asked me for AI. What they ask for is time. That’s exactly what AI gives back, which is one reason adoption has jumped from 26% of U.S. small businesses in 2023 to 87% in 2026. It’s one of the fastest technology shifts I’ve seen. Half of the owners using it worldwide say the single biggest benefit is simply saving time.
So, use it, and use it widely; it’s good for brainstorming, first drafts, subject lines, repurposing one post across channels, and reading your results. But keep one rule: AI is the assistant, not the owner.
The mistake I see is people putting AI’s words in front of customers with none of themselves in it. Your personality, your expertise, your point of view: that’s the whole advantage. Don’t let a tool stand between you and the relationships you’ve built. That’s exactly how we think about it at Constant Contact; the platform does the heavy lifting, and the owner stays in the driver’s seat. AI should amplify the human connection, not replace it.
Lesonsky: The holidays bring a lot more marketing noise to customers’ inboxes and social feeds. What can small businesses do to stand out without simply sending more messages?
Vella: Relevance over volume, again. When every inbox is stuffed with “20% off,” one more “20% off” doesn’t cut through; it just adds to the pile. Before you hit send, ask one honest question: Why would my customer care about this, today? Then give them something worth caring about: a good gift idea, a limited window, a piece of expert advice, early access, a recommendation only you would make. And be yourself. People aren’t just buying a product at the holidays; they’re buying from a person, a shop, a community they want to see still standing next year. That isn’t a tactic; it’s your edge.
Turn Holiday Shoppers Into Year-Round Customers
Lesonsky: Many businesses focus almost entirely on making the holiday sale. What should they be doing during the season to turn first-time holiday shoppers into repeat customers in January and beyond?
Vella: The easiest trap at the holidays is treating the December sale as the finish line. It isn’t the finish line; it’s the start of a relationship. Our research found 72% of consumers go back to the same small businesses each holiday season, and 88% say they’re likely to become repeat customers after one good holiday purchase. That’s a gift, if you follow up on it.
Think about the January relationship before the December transaction even happens. Send a real thank-you; ask for feedback or a review; give them a reason to come back, whether that’s a recommendation or an incentive for a slow month. Keep the contact going. Constant contact, you might say — it works for your customers the same way it works for us.
Lesonsky: What’s the biggest holiday marketing mistake you see small businesses make — and what should they do instead?
Vella: The biggest mistake? Trying to do all of it yourself. At the holidays, there’s more pressure piled onto a to-do list that’s already too long, and the instinct is to just do more. Our research shows customer engagement is one of the challenges owners worry about most heading into the season, and that half of small businesses are prioritizing efficiency, with a third testing new tools to get there.
The answer isn’t more marketing; it’s smarter marketing. The winning businesses at the holidays won’t be the ones who sent the most messages; they’ll be the ones who made every message count. That means the right customers, the few messages that matter most, the channels that actually work for them, and automation and AI handling the repetitive parts so the owner can spend time on the parts only they can do.
Lesonsky: If a small business owner hasn’t started planning holiday marketing yet, what are the three things you would tell them to do right now?
Vella: First, know exactly who you’re for and why they’d choose you. In a season when everyone’s watching their spending, a clear reason to pick you beats a louder ad every time.
Second, go where your customers already are, and don’t try to be everywhere. For most businesses, that’s social and email working together. Sit down now and put it on a calendar, from your first awareness posts through your post-holiday follow-ups, so December doesn’t get away from you.
Third, keep yourself in it. Technology is a real time-saver: AI can take you from an idea to a finished campaign fast, tell you what’s working, and personalize what you send. But it should never replace your voice. Customers can feel the difference between real and generic, and they reward real.
The thing I’d leave every owner with is this: You don’t have to outspend the biggest brands to win this holiday season. You just have to be more relevant, more personal, and smarter about how you use the little time you’ve got.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
