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Winning the post-holiday retention race 

post-holiday customer retention

During the holiday season, businesses invest heavily in marketing, merchandising and service strategies to attract and delight customers. That investment then hopefully leads consumers to purchase items for themselves, friends, family and loved ones. This is something most businesses, especially retailers, know well and they have developed proven tactics for securing those sales. However, after the holidays are over, the sales have rolled in, and the teams have celebrated their success, the next phase of the journey begins. 

Holiday gifts are returned at a higher rate than regular purchases (up to 35%), leading to additional processing expenses for businesses as overall transportation and logistics costs rise with inflation. Beyond that, there may be many consumers who have used a Buy Now Pay Later (BNPL) option for making purchases, meaning that they’re interacting and engaging with a brand beyond the holiday shopping season. What does this all mean? The post-holiday strategy is more important than before as businesses look to retain the revenue and relationships they invested so heavily in during the holiday shopping season, and potentially even extend it further. 

First, let’s dive into the science behind purchasing and long-term retention decisions of consumers.

BNPL adds opportunity 

The rise of Buy Now Pay Later solutions represents a great opportunity for brands to extend relationships. We know through our 2023 Consumer Report that if a consumer feels that they have been treated negatively, 87% are less likely to purchase further products or services and 78% are more likely to consider switching to a competitor. How you treat a customer, especially if they are behind on payments, will make or break that relationship in the long run. 

According to research from Quickbooks, about half (51%) of consumers plan to use BNPL for holiday shopping this year. Additionally, the demand for BNPL is higher among younger consumers with 65% aged 18-24 planning to use it for the holidays. By nature, these extend the time a consumer is engaged with you or thinking about your brand. And, more opportunity to get it right. What you say, when you say it, how you say it and where you say it will shape the future of that relationship, and understanding the role behavior plays in that is paramount. 

Behavioral science considerations 

The psychology of the holidays is important to note. How we shop, when we purchase, what we eat, how we celebrate and even what we wear is informed by our social, cultural and psychological factors. For example, some families may decide to exchange money in order to purchase items during the post-holiday sales, while some opt out of gifting altogether, in favor of time spent together. All of these factors contribute to a consumer’s behavior. Underlying that for some is lots of happiness, and for others, quite the opposite.  

Additionally, consumers are already fraught with decisions, making over 35,000 on a daily basis or one decision every two seconds. With the heightened amount of digital communication throughout the season, along with added decisions on their minds, consumers are putting up barriers to engaging with them. They are: 

  • Digital fatigue – Mental and physical exhaustion caused by an excessive amount of time spent on digital devices.   
  • Decision fatigue – A state of cognitive overload that impedes a person’s ability to effectively evaluate and make decisions.  

These barriers to engagement, among others, can lead to avoidance of communications, impulsive choices or a failure to act in our own best interests. This type of behavior, in the context of a company-consumer relationship, is almost always damaging for both parties. 

Truly knowing and understanding your customers is the only way to know how to communicate effectively during periods of heightened social, cultural, and psychological awareness.  Below are some behavioral tactics to consider incorporating as part of your post-holiday communication. 

Building a behavioral-based post-holiday campaign 

Building long-term customer relationships is key for business success. According to the Harvard Business Review, businesses that are leading in customer loyalty grow revenue 2.5 times faster than their peers. Beyond that, they see two to five times higher shareholder returns over a decade. Then there is the immeasurable value of recommendations and rave reviews both online and offline. Here are some tactics you can try, and a sample use case that you can use as inspiration. 


Fear of Missing Out (FOMO): Within behavioral economics and decision theory, FOMO is partially explained by loss aversion. Treating this as an opportunity to delight could lead to greater sales or a better experience. 
  • Use case: They purchased a gift for someone else. Seize the opportunity to turn them into a customer of their own. Could you send them a note to let them know their loved ones used their gift, and at that same time, offer them a limited time promotion to buy something from you with an extra perk? This could be something like a personalized note, a small discount, or an inclusion of a sample of another product, for example. 

Implementation Intentions: Create and share a concrete plan to do something. With that, the customer is more likely to actually do it because there is a clear path to achieving a goal. 
  • Use case: They leveraged a BNPL platform. The terms were clear when selecting, however, you can lay it out for them in a timeline, send payment reminders, relevant information for completing the BNPL commitment. With 59% of consumers noting that they want information on flexible payment options, you can demonstrate your commitment to the relationship by delivering the information that matters to them most. 

Bundling bias: This describes our tendency to not use all experiences that are purchased as a group. This leads to consumers not gleaning the full value versus making an individual purchase. 
  • Use case: If the consumer purchased a package of items or experiences, you can help ensure that they use it to its fullest. How? Share timely updates, divide the bundle into clear steps they can take to maximize value, and recap their progress toward using the entire purchase. This extends the experience they have with your brand and shows your commitment to providing value to your consumers.

In conclusion, the post-holiday period is a critical phase in maintaining the momentum gained, and it’s important to note and understand the diverse factors influencing consumer behavior during this time. Ultimately, as businesses navigate the challenges of post-holiday returns and the dynamic landscape of consumer behavior, implementing thoughtful strategies and behavioral tactics is important. It will not only help to retain the revenue generated during the holiday season but also lay the foundation for sustained growth, higher shareholder returns, and positive recommendations. 

Download our 2023 consumer report, Decoding Billpayer Behavior, to discover more about what’s driving consumer behavior.