How to measure sales performance during the holiday season

The holiday season is a critical sales opportunity for businesses. In 2024, total US retail sales over the holiday period exceeded expectations, according to the National Retail Federation, reaching a record $994.1bn.

To optimize revenue during this time businesses must have in place ways to continually track their sales performance.

In this guide you’ll learn about the essential KPIs for monitoring your holiday sales and discover how to use them to capitalize on opportunities.

The indicators that are most important for you are:

• Conversion rate
• Return on investment (ROI)
• Customer retention rate
• Year-on-year growth

You’ll learn how to act quickly to identify trends, improve efficiency and boost holiday performance.

You’ll also be introduced to a powerful tool that makes tracking KPIs quicker and easier. Worldpay reporting and insights streamlines KPI tracking, offering real-time insights to maximize profitability.

Why is it important to measure sales performance?

Particularly during peak sales periods like the holiday season, measuring sales performance is a vital way to understand how your business is performing and quickly take action to remedy any issues identified.

It helps you recognize trends, optimize resources, and pinpoint strengths and weaknesses. This allows you to take action to improve your sales strategies, maintain competitiveness, drive profitability and enhance customer retention.

How to measure sales performance with sales KPIs

A KPI is a ‘yardstick’ that is used to track business performance.

It lets you assess how effectively your business is performing and make data-driven decisions to improve this.

What is a key performance indicator (KPI)?

The four essential KPIs for your business over the holiday period are:

• Conversion rate
• Holiday campaign ROI
• Customer retention rate
• Year-on-year growth

In the following section you’ll learn why these indicators are so important and how to measure them.

Measure conversion rate

Conversion rate measures how many of your visitors go on to make a purchase.

It can be calculated by dividing the number of transactions by total visitors:

Conversion rate = Number of transactions / Total visitors

A high conversion rate indicates that your marketing, user experience, product offering, and checkout process are functioning smoothly to deliver sales.

By tracking conversion rate you can identify areas for improvement, such as checkout processes, pricing or website design, and implement changes to increase sales and maximize revenue from the visitors you have.

One key factor in improving conversion rate is having a seamless checkout experience. Customers will often abandon their carts if the purchase process is clunky or confusing.

You can learn more about how to offer a checkout process using Worldpay online payments, which enables you to reduce cart abandonment and boosts sales.

Holiday campaign return on investment

Return on investment (ROI) is another essential KPI for evaluating the profitability of your investment in promoting your site during the holiday period.

ROI can be calculated as follows:

ROI = (Net profit / Investment) × 100

This KPI is vital because it helps you measure whether your holiday marketing efforts are generating more profit than they cost to implement.

To maximize ROI during the festive season, the sorts of campaigns you can use include targeted promotions, special discounts and loyalty programs.

Customer retention rate

Customer retention rate is a KPI that measures the percentage of repeat buyers during the holiday season.

It’s calculated by:

Customer retention rate = [(Customers at end of period - New customers) / Customers at start of period] × 100

Retaining existing customers is generally more cost-effective than acquiring new ones, making this a business-critical indicator.

Find out how Worldpay loyalty cards and offers can help increase customer retention by providing incentives and encouraging repeat purchases before and after the holiday season.

Measure year-on-year growth

Year-on-year growth is a KPI that compares sales from this year’s holiday season to the last one.

A percentage growth figure can be calculated by:

Year-on-year growth = [(Current income – Previous income) / Previous income] x 100

This KPI is essential for understanding long-term trends and evaluating the performance of your business over time. It provides insights that are crucial for planning.

Ways to increase growth include improving customer retention, optimizing marketing strategies, offering seasonal promotions and enhancing operational efficiency.

KPI tracker tools

Tracking KPIs can be greatly simplified by using tools such as Worldpay’s reporting and insights suite. This provides easy navigation and at-a-glance summaries based on real-time access to transaction data, customer spending patterns, settlements and invoicing.

It allows you to quickly access detailed insights into your sales performance and make informed decisions based on instantly accessible KPIs during the holiday season.

Conclusion

Measuring the most relevant KPIs during the holiday season can significantly improve business performance.

It can improve retention, help you understand which promotions are most effective, optimize your checkout process and compare this year’s performance with the previous.

Worldpay reporting and insights builds understanding of your holiday sales performance, enabling you to capitalize on the opportunities offered by the year's busiest shopping period.