Budgeting for Your Marketing Tactics
We want now to begin our written business plan incorporating some of these tactics. Many travel professionals “wing it” and begin marketing at the first sign of business slowing down. The problem with doing things that way, of course, is timing. The business you have today likely resulted from your marketing efforts months ago. Likewise, your marketing efforts today may not pay off for some time.
Budgeting enforces the discipline necessary to actually calendar your marketing efforts. When spending real dollars, travel professionals become very cognizant of the return on investment. In addition, the marketing budget can and should include such essentials as marketing collateral (business cards, flyers, capabilities brochures), websites, advertising, dues to local organizations and promotional items, all professionally produced. Having a marketing budget, and then wisely spending it, ensures that the travel agency is doing everything necessary to keep its profile high enough to gain mindshare in the community. Too many agencies are loathe to invest in their own futures. They have no website, no professionally produced logo or collateral, no CRM system, no advertising or promotional efforts. Not coincidentally, they also don’t have many clients. |
The timidity is understandable, but regrettable. Every business takes on investment in its own growth. The secret is to spend every dollar wisely and to then monitor results not just at the end of the effort, but throughout the duration of the marketing expenditure so that the effort can be fine tuned while in progress.
Without dedicated resources to leverage the company profile, the travel consultant is thrown back to the early business stages of guerrilla marketing tactics that, while useful and necessary, do not permit the strongest possible growth curve. Investment in marketing accelerates growth when properly applied.
Invest in yourself. Most knowledgeable marketing guides will indicate that for small service businesses, between 1% to 3% of your gross proceeds should be reinvested in marketing. Thus, if your Gross Revenues are $1,000,000 (commission income of approximately $110,000) a marketing budget of between $10,000 and $30,000 is a norm. A budget forces the travel agency to focus on the marketing process and to invest in growth in a responsible and predictable manner. Like the marketing plan, a budget should be in writing. Periodically, the travel agency should review its expenditures, measure return, and make appropriate adjustments.
Marketing is both a noun and a verb. Much like the word “lightening,” the one word denotes both the act and the action. We all understand how difficult it can be to fund marketing efforts. Without the funds to market, it is difficult to bring in customers and without customers it can be difficult to generate the funds.
Without dedicated resources to leverage the company profile, the travel consultant is thrown back to the early business stages of guerrilla marketing tactics that, while useful and necessary, do not permit the strongest possible growth curve. Investment in marketing accelerates growth when properly applied.
Invest in yourself. Most knowledgeable marketing guides will indicate that for small service businesses, between 1% to 3% of your gross proceeds should be reinvested in marketing. Thus, if your Gross Revenues are $1,000,000 (commission income of approximately $110,000) a marketing budget of between $10,000 and $30,000 is a norm. A budget forces the travel agency to focus on the marketing process and to invest in growth in a responsible and predictable manner. Like the marketing plan, a budget should be in writing. Periodically, the travel agency should review its expenditures, measure return, and make appropriate adjustments.
Marketing is both a noun and a verb. Much like the word “lightening,” the one word denotes both the act and the action. We all understand how difficult it can be to fund marketing efforts. Without the funds to market, it is difficult to bring in customers and without customers it can be difficult to generate the funds.
Marketing is, however, not just something you buy. It’s something you do. Certainly you can spend vast amounts of money on marketing, but for most service businesses, you can also bootstrap your way into the minds of your local community. Marketers have always been most fond of the type of marketing that is all about sweat equity rather than dollars.
Here’s the good news: not every outlay needs to be in actual dollars. Many of the marketing tactics we will discuss are more labor than capital intensive. Solid techniques are available to assist you in bootstrapping your marketing efforts and investing your time rather than dollars. For example, if you advertise in the newspaper you are going to spend some real capital and hope for a good return. If you advertise with a local yoga studio in their newsletter however, you may spend much less and get an equally good return along with an endorsement from the owner! Better yet, if you and the yoga instructor put together a trip to Costa Rica for her studio then you will spend little more than the time, energy and effort to make it all happen! |
Strategies that emphasize public relations and word of mouth marketing cost relatively little compared to advertising campaigns and large, orchestrated events. Putting you own personality on the table in your local community, leveraging the efforts of charities, schools and other organizations which require your participation and involvement is a legitimate and time honored method for integrating your business into a community.
We have all heard that “it takes money to make money.” No doubt about it, you will have to have a marketing budget and you will have to invest in your company. However, don’t let a well-intentioned aphorism be an impediment to your success. Your time has a value, it is a money equivalent. Your involvement in local charities, community events and organizations represents an investment.
In a small service business like travel consulting, a direct marketing approach is actually preferable to capital outlay since so much of the impact of the marketing message has to do with the people who own and operate the agency. The more the marketing plan involves direct involvement by the agency staff in events, speaking engagements, word of mouth campaigns and other public relations efforts, the lower the actual capital outlay is necessitated. Nevertheless, there is an important lesson in the simple and undeniable fact that to make money one has to spend some money.
We have all heard that “it takes money to make money.” No doubt about it, you will have to have a marketing budget and you will have to invest in your company. However, don’t let a well-intentioned aphorism be an impediment to your success. Your time has a value, it is a money equivalent. Your involvement in local charities, community events and organizations represents an investment.
In a small service business like travel consulting, a direct marketing approach is actually preferable to capital outlay since so much of the impact of the marketing message has to do with the people who own and operate the agency. The more the marketing plan involves direct involvement by the agency staff in events, speaking engagements, word of mouth campaigns and other public relations efforts, the lower the actual capital outlay is necessitated. Nevertheless, there is an important lesson in the simple and undeniable fact that to make money one has to spend some money.
Exercise:
Pull together your marketing expenditures for this year and take a good look at how you spent your money. Can you calculate a return on investment for each effort? Are you satisfied with the way in which you have been investing in marketing? Determine a preliminary gross budget that will approximate 2% – 3% of the gross you realistically hope to achieve. Then, visit the list of tactics from the previous lesson and think about which you will use, and allocate to each either a dollar amount or a time allocation you feel is appropriate. Be sure to set money aside for your marketing collateral and website!
Shoestring Nooses
Pull together your marketing expenditures for this year and take a good look at how you spent your money. Can you calculate a return on investment for each effort? Are you satisfied with the way in which you have been investing in marketing? Determine a preliminary gross budget that will approximate 2% – 3% of the gross you realistically hope to achieve. Then, visit the list of tactics from the previous lesson and think about which you will use, and allocate to each either a dollar amount or a time allocation you feel is appropriate. Be sure to set money aside for your marketing collateral and website!
Shoestring Nooses
I often encounter a mindset that sees marketing as an expense. I suppose from the perspective of an accountant, that is absolutely accurate. However, in reality marketing should be viewed as an investment. Think of it this way: marketing is only expensive if it’s not working. If you made 5 dollars every time you spent two marketing dollars you would be spending money all day and be happy about it. Ideally, marketing is an investment.
We all live within the constraints of a budget. There are many good things to be said about marketing on a shoestring, on choosing strategies that are smart and that work. Today, however, we are going to talk about avoiding turning our shoestrings into nooses – making mistakes with our marketing dollars that, like bad investments, are nothing but expensive errors. |
I received an email the other day from an agent using an AOL email account. At the bottom of her email was an advertisement: “Make your summer sizzle with fast and easy recipes for the grill.” Really? I want to pull my hair out.
All in the name of a “free email account” this particular agent does not mind looking like a consumer. What is a client to think? Does an AOL account, or hotmail or gmail indicate professionalism? I suggest that this is a shoestring noose – in reality, it is more expensive for the agent to use a free AOL email than to spend $15.00 a year for a professional email account. With every email this agent sends, she loses professional credibility.
Shoestring marketing is not about doing things cheaply. Let’s not confuse being smart with being cheap.
Other areas where you should not skimp on your marketing expenditures:
Only those with highly developed artistic sensibilities should undertake the design of their own collateral. I’ve seen it work, but those exceptions prove the rule. Marketing collateral is the number one area where you should make a real investment. These items stand in for you when you are not there to speak for yourself. The last message travel agents want to give their clients is “do it yourself.”
You get the idea.
It is always important to be smart with your marketing dollars. That is an entirely different matter, however, from being “penny wise and pound foolish.” If you want to engage your clients on a professional level, be cautious about how you present some of your most visible points of contact.
All in the name of a “free email account” this particular agent does not mind looking like a consumer. What is a client to think? Does an AOL account, or hotmail or gmail indicate professionalism? I suggest that this is a shoestring noose – in reality, it is more expensive for the agent to use a free AOL email than to spend $15.00 a year for a professional email account. With every email this agent sends, she loses professional credibility.
Shoestring marketing is not about doing things cheaply. Let’s not confuse being smart with being cheap.
Other areas where you should not skimp on your marketing expenditures:
- Business Cards – purchase good ones, they are your silent ambassadors;
- Logos – please do not build one out of clipart, use a professional;
- Brochures – Better to not have one than to have a bad one.
- Websites – Yikes. Conflicts of interest prevent me from editorializing too much here.
Only those with highly developed artistic sensibilities should undertake the design of their own collateral. I’ve seen it work, but those exceptions prove the rule. Marketing collateral is the number one area where you should make a real investment. These items stand in for you when you are not there to speak for yourself. The last message travel agents want to give their clients is “do it yourself.”
You get the idea.
It is always important to be smart with your marketing dollars. That is an entirely different matter, however, from being “penny wise and pound foolish.” If you want to engage your clients on a professional level, be cautious about how you present some of your most visible points of contact.