4. Marketing & Sales
Marketing & Sales
Why read this section? We live in a cluttered world with consumers being bombarded by marketing messages every day. Unfortunately, the travel market can deliver far more bookings than customers want to buy. As a small business you are likely to need marketing and sales knowledge to stand out. For you this is likely to need very targeted ways of making your customers aware of what you can offer, and so consider you for a booking. Marketing has been successful when you are contacted by a customer who might be interested in your proposition. This section introduces these subjects.
What you need to know before you read this section:
- You understand what your customer proposition is from Travel market
- If you want to run a test campaign, then you will need to have met the legalities set out in Travel regulation and legalities
- You have an estimate of the costs of running the business, that is, how much you can afford to spend on sales and marketing to sell a booking, from Cash, surviving the first year
The main stages to understanding your sales and marketing approach is:
- Decide on marketing messages
- Decide on the communications channels your target customers listen to
- Likely costs and availability of your chosen communication channels
- Run a test marketing campaign
- Run a test sales campaign
- Agree on how and when your business will re-approach the customer
- Assess your business
All of this can help decide whether you have a viable business. You ought to redraft your proposition and main assumptions now to capture the learning. You can also tell whether you are getting the buzz that you expected.
A lot of this section is aimed at non retail agency businesses, that is, for those without a shop front to market through. While some of the thinking still applies, it is less important. We will work on an additional section on marketing for a new travel agency.
Stage 1: Decide on Marketing Messages
Section three ended with the definition of the customer proposition. Check that you are happy with this and that you can deliver on any promises.
- Dad gets to surf while the family are entertained
- Surf lessons for the rest of the family if they want to get involved
- A company run by surfers who know what a surfer wants
Stage 2: Decide on Target Communications Channels
What papers do your target customers read? Do they currently book their holidays through a high street tour operator, a niche tour operator or as a dynamic package on the internet? Is there a way I can identify a profile of these customers, for example do they tend to live in certain locations and be of a typical age? You need to ask as many real target customers these questions as you can and sketch out your best guess.
How do I get a presence in the target customers’ communications channels?
- PR: Can you write or do something that a journalist will want to write about. Analyse the current target publications and decide on the themes they are currently interested in. If the environment is a theme, can you provide the material or event for a journalist to write about your business or you in the context of the environment?
- Networking: Do you know your first customers? Do you know the people who know your first customers? Working through that can be a great way of marketing and getting feedback on the proposition. If you are selling to other businesses, then networking is a great way to meet people and talk about what you do. If the face to face networking is too daunting try online networking first
- Direct Marketing: There is an industry out there who specialise in sending a single letter or a single email to a specific customer. It’s cheap to do at scale but the response rates tend to be low, often making it very expensive to get bookings. It is almost certainly more useful for customers you have done business with in the past. The other massive opportunity is internet search, so getting interest from people searching on Google for your proposition. If you have a web site then you can get a ready supply of leads, some you pay for (pay per click), some is free (natural search). It’s a big topic, and one to read about as you can get small amounts of leads for very specific targeted customers
- Broadcast Marketing (sending one message to many people, for example, a magazine advert): If there are target customer publications then you can buy some ad space. Likely to be expensive for all but the most niche publication
In the example, the target customer is a 30 year old man who used to surf, but cannot surf now because of family commitments while he is on vacation. He may still read surf magazines or go into surf shops. He may use the internet to arrange family based holidays. He is highly likely to read the main press. I would use the surfing fathers I know to check my thinking.
Stage 3: Costs and Availability of Target Communication Channels
For PR and networking, it’s more about your time and effort than cost. You may need some subscriptions for networking or do some research for the PR. But typically the cost here is your time and effort.
For Direct Marketing, at the scale you are likely to be operating, getting names and addresses or email addresses is probably the issue. Companies will sell them to you, but you need to be targeting specific customers and you need to check the quality of the addresses that you buy. Then create the letter / email and fire away. If you can, running a low scale test that you can execute yourself will be good experience before asking a company to do this for you.
For the broadcast marketing, the niche publications will almost certainly have much lower advertising space costs (hundreds of pounds perhaps) versus the national press (thousands or tens of thousands of pounds).
Google will quote the cost of pay per click searching where commonly used terms like ‘holiday’ will be expensive (pounds per click in some cases) while very specific terms will be a few pence per click.
In my surfing fathers example, I would opt for the surfing magazine as a quick way of testing for interest. Call the main publications to check for advertising rates. I would also check the last few issues of the surfing magazines to see what the themes are and whether there is any PR angle I could take at some point. I would look into creating a very simple web site and setting up a search account. The cost of ‘family surfing holidays’ being pence per click.
Stage 4: Run a Test Marketing Campaign
It’s about to get serious. We can either get ready to generate some interest (and be prepared to deliver the holidays that people want) or we can test for interest by creating something customers will respond to register interest. One word of warning, if you intend to generate one booking, then you will need to be operating within the travel industry regulation and legalities, please read that first!
Generate some real leads: In some ways this is the ideal position to be in as you are going to test the real market. How many sales, at what price can I generate? Design the material (an ad say) around the marketing messages from stage 1 and run the campaign. If you are running multiple adverts or trying different ways of generating interest, then try and categorise the responses so that you know what created the response.
Test For Interest: Design the test so that potential consumers register their interest without creating the expectation that you can supply the holiday. It might be that you offer an information pack which lets the customer fulfil the holiday. It might be that the customer registers for a interest group or join a network online. The key is to make sure the customer has to do something meaningful to register interest, in some ways not making it too easy to register interest helps determine real interest.
In the surfing father’s example, I am prepared to arrange the holidays. I design an ad around the marketing messages from stage 1, place it in the surf magazine and cross my fingers. The advert has a number to call.
Stage 5: Run a Test Sales Campaign
While this is again a massive topic, I would start with the following simplified stages. These assume that you are talking to the customer. You can add your own style to this.
- Get some basic customer details (name, phone number) so that you can call back if you are interrupted and check that they are responding to the test campaign. Check whether they have 5 minutes or 15 minutes to tailor the call
- Understand what the customer wants. What is absolutely key is to understand whether they are experts or whether you are the expert. Really good sales will adapt the conversation to this.
- Uncover what are called hidden wants, that is, things the customer does not realise they want. For example, my surfing fathers might forget that their partners might want to learn to surf or be pampered, shame on them. If you can, establish what the customer expects to pay so that you can steer the conversation sooner rather than later
- When you have understood what the customer wants, hopefully you have a match with what you can supply. Closing the sale is about getting customer commitment. You will find sales people arguing on when and how to close the sale.
- All I would say is that it must have a commitment and you should decide how many times you try to close before you give up. Most sales people would agree that you need to attempt to close more than once before you give up
- Throughout the sales call gather data on the customer. Some of it will be hard data, but the soft data (likes and dislikes) is at least as important. Record as much as is feasible for later use
- On the assumption that you have closed the sales – take payment and start to fulfil the booking!
Example: I receive a few calls, talk through my sales script and test how much customers are willing to pay. The main stumbling block is price. However, we take a couple of bookings and proceed.
Stage 6: Re-approach the customer
If you failed to get a booking, agreeing to re-approach will provide you with a source of free leads for later. Don’t underestimate the value of this.
If you sold, then I would still try to agree on a re-approach, but you have to decide whether to wait until after the customer’s holiday. Some would argue that even a poor holiday experience can help you in your next sale. This would involve showing concern and adapting the next offer, but many good sales people would still re-approach.
Example: For those who booked, I put a call in my diary for a week after they get back. For those who objected on price, I have agreed to go back if I can find a cheaper way to deliver what I offer.
Stage 7: Assess Your Business
Regardless of the number of bookings, you have some feedback now. Even if you have not made a booking you should view the time and costs as an investment. The questions to ask are:
- Is my customer proposition appealing? The indicator for this is the response to the test campaign. Customers register their interest by responding. If in the sales process, you are compared to other companies, then either the marketing message needs to be clearer, or you are competing with an existing business. Remember that customer perception is reality, even if you think they are wrong
- Is my customer proposition value for money? Closing the sale at your target price will give you a very clear indication. If you closed all the sales then you probably need to think about increasing the price! Lucky you!
- What is your cost per sale (total sales divided by cost to market and sell)? Can you afford these costs? Which marketing channels have the best cost per sale?
- Did the customer who showed interest or bought from you fit the profile you had in mind
- Does the feedback indicate something you should change about the proposition?