As Black Friday and the Christmas shopping period start to wind down, many SMBs are left feeling a bit winded. Revenue looks flat or is even falling, customer fatigue is real, and the membership unsubscribe button has been given a workout. If this sounds familiar, you’re not alone. But just because the year’s coming to an end doesn’t mean it’s time to call it a day. Far from it. It’s a moment for self-reflection, course correction and forward thinking.
With 2026 almost upon us, one thing’s clear. Real riches won’t be won by chasing cheap wins. True success will come by shifting from operational efficiency to strategic effectiveness. With a smarter balance of brand, activation, and performance, you have yourself a formula that can drive sustainable profitability.
So when should you make this shift? Not Jan or Feb, now. Sure, the market traditionally goes into sleep mode over the summer, but leaders who get moving during this lull are the ones who’ll outpace their category when the market reawakens.
Efficiency isn’t an effective strategy
A foundational principle from Michael Porter still holds today: Operational effectiveness (doing things right) isn’t strategy (doing the right things). Yet most SMBs spend 80% to 90% of their attention on doing things right. This means focusing on lowering CPMs, improving ROAS, reducing CAC, or shaving cents off a cost-per-click.
All good hygiene practices, but they’re not the source of a competitive advantage.
Real effectiveness is about increasing the value of the outcome, not just reducing the cost of the activity. In marketing terms:
Efficiency = Getting the fastest sale.
Effectiveness = Getting the sale that builds the brand and keeps customers returning for years to come.
This distinction is even more relevant during peak retail periods. In the months leading up to events like Black Friday, consumers hold back spending. Sales cycles have trained spenders to wait for the big discounts. SMBs respond by slashing prices. Desperate to remain competitive, they sacrifice margins and long-term value.
At AFFINITY, we routinely analyse client data post-Q4, and the pattern is predictable:
Short-term sales take off, while long-term profitability plummets.
A more effective strategy is needed to break this cycle. There needs to be a greater focus on ensuring every sale contributes to future margin, not just today’s revenue.
Reference: Porter, M. (1996). “What Is Strategy?” Harvard Business Review.
Reference: Binet & Field (2013). “The Long and the Short of It,” IPA.
How to escape the discount death spiral
The problem with discount-led growth is simple: it’s not actual growth. Aggressive discounting is highly efficient in terms of speed, trackability and higher volume. Yet fundamentally ineffective because it:
- Erodes profit margins.
- Trains audiences to buy only on price.
- Undermines brand differentiation.
- Causes customers to churn as soon as a cheaper offer appears.
- Exhausts your database, driving unsubscribes and spam complaints.
- Forces repeat discounting just to maintain baseline revenue.
This is the discount death spiral and every year, Black Friday sends it into a tailspin. But there’s an opportunity to break the cycle. Brands that dominate in 2026 will be those that recalibrate toward a strategic blend of brand building, smarter activation and targeted performance.
A balanced strategy in practice
One such approach we’ve implemented for clients involves combining:
Brand distinctiveness work to build memory structures outside sales peaks.
Precision activation to convert already primed audiences without heavy price incentives.
Performance optimisation that favours margin, not volume.
For several retail clients, shifting even 10% to15% of spend from short-term performance to brand and activation has delivered:
Higher full-price sales.
Lower long-term CAC.
Greater customer lifetime value.
Increased repeat purchase without incentives.
These results are consistent with IPA effectiveness findings. They show brand investment has a compounding effect across years, not just weeks.
Reference: IPA Databank (2018). ‘Media in Focus.’
2026 needs a different kind of planning, starting now
The biggest mistake SMB leaders make is planning for the new year in the new year. By then, budgets are locked, consumer momentum has shifted, and hungry competitors are hitting their stride. If 2025 felt tough, it’s because many businesses entered it already on the back foot. Consider this:
You can’t outspend your category.
You can’t out-discount them either.
But you can outthink them.
And that kind of thinking starts today.
Three key moves to make
1. Build distinctiveness, not dependence on discounts
Define and consistently reinforce what only your brand stands for. Distinctiveness reduces reliance on price as your competitive advantage.
2. Replace overused performance tactics with strategic triggers
If your emails, ads, and offers look like everyone else’s, they’ll probably perform on par with them, with little chance of an uptick. Audit your communications for overfamiliar and easily ignored mechanics like cloned creative, repetitive retargeting and launch countdowns. Then replace them with triggers rooted in a meaningful understanding of your consumers’ behaviours, emotions and motivations.
3. Make effectiveness your operating system
Every metric should relate to margin, repeat purchase, or brand preference, not just clicks or ROAS. Remember, effectiveness isn’t a reporting function; it’s a decision-making discipline.
Shifting mindsets for success
The question for 2026 isn’t how do we sell more during sales periods? It’s how do we grow profits all year round? The answer is a shift away from doing things cheaper to doing the right things better. To focus on effectiveness, not efficiency. To attract audiences with distinctiveness rather than discounts. And to move from reactive tactics to a strategic approach to growth. Those who drag their feet until February will likely relive the shortcomings of 2025. But those who plan ahead now are sure to hit the ground running in 2026 and set themselves up for a bumper year.
