(This is the second in a six-part series about how you can transform your travel agency into a money- making machine)
You will hear from just about everyone of any authority in the retail travel channel that you need to be marketing. The reason for your success or failure boils down to one thing – the effectiveness of your marketing.
Marketing is a big, esoteric term that is thrown around like the holy grail. But what is marketing? Before we have any conversation about marketing, you must first understand what it means. Yes, you heard me correctly. In my experience most people in the retail channel do not really know what marketing is – they just know they must have it.
I have already established that the industry uses the terms marketing and sales interchangeably. Most who depend on their marketing to make sale are severely disappointed to find out after spending the majority of their working capital on marketing, that they are two very different disciplines.
To most business professionals, marketing and advertising are the same thing and while there are many similarities – like sales and marketing, they are different. The easiest way to understand marketing is to imagine it as a pie: pumpkin, pecan, it doesn’t really matter. We will call it the marketing pie, and each slice represents a subset of the overall pie.
When we look at the big picture, what we find is most professionals are not spending their money on marketing, they are only one slice of the pie – advertising.
The real estate industry does marketing just about better than anyone I know. For example, when you are planning to buy or sell a home, the first thing your realtor does is conduct a market analysis to determine other homes on the market, how long it should take to sell and where they are priced. After researching the market, the realtor prices the home according to the market.
The next step is to create a media plan. In this case the realtor utilizes social media, flyers, open houses, Multiple Listing Service, and broker websites. She then hires a photographer and creates the advertising for the home. Her primary distribution channel is Realtors, so she begins an email public relations campaign to fellow realtors informing them the home is going on the market and a preview open house exclusively for them. She provides customer support, answering any questions and representing the seller in the transaction making sure it is a smooth and stress-free process. Finally, she is active in her local community – a requirement of the Realtor designation working with local charities, schools, and other interests.
As you can see, Realtors embrace each slice of the marketing pie. The most successful ones have a written process to ensure they serve the whole pie every single time. Otherwise they are doing themselves and their client a disservice by not utilizing 100% of their resources at their disposal. Most of you are probably serving just two pieces of the pie – Advertising and Customer Service. Just think of the results if you were to add the other slices to the mix. You would have a better understanding of who is your customer, and who your real competitors are in your specialty. Creating and executing a media plan to maximize exposure in all channels. Being an active member of your community, be it local or online, is part of an overall that helps position yourself and attract prospects who see you as an expert in your field.
Understanding marketing is the first step. The late, great Peter Drucker is famous for saying “The purpose of a business is to create and keep customers.” It’s that simple. If you take his statement and break it down into two parts, “Create” and “Keep” we now need to look at it from two different perspectives. Creating a customer is an Attraction strategy. Keeping a customer is a Retention strategy. Two very important and different perspectives. The second step in the Transformation process is attraction marketing.
Attracting your Target Prospect
Now that we have a full understanding of what marketing really encompasses, this process becomes clearer. The first law of attraction is to be clear who you are trying to attract. Car dealers have this down to a science. If you are selling Jaguars, you don’t want to spend your time or money attracting Hyundai buyers, right? The dealers understand that both buyers are typically price sensitive in their own ways. While the Hyundai dealer may advertise $0 down and $199 month, the Jag dealer will advertise $4999 down and only $700-month payments. Each price point attracts a particular buyer.
You should consider implementing a similar strategy to attract your target customer. Your advertising is the first step in qualifying a prospect. Instead of advertising Carnival for $599 per person, try Seabourn for $5999. The phone may not ring as often but when it does, odds are high it will be your target prospect.
One thing that will help you to use your marketing dollars more wisely is to understand your role in the big picture. It is not your job to create demand. The supplier, the owner of the product has that responsibility. They are building larger (or smaller) ships with amenities we would have never dreamed of 20-30 years ago. Hotels and resorts have changed their offerings and in room amenities to create and cater to the demands of today’s business and vacation traveler. They spend millions of dollars marketing their products to the consumer, educating them on the respective brand experience. They do this very well. In fact, virtually every segment of the travel industry continues to grow to meet the demands of today’s traveler.
Your job is fulfillment. Your job is to find those prospects who are interested in purchasing a particular product. Depending on your specialty (or lack of) you may be the big fish in a small pond or as most agent- a minnow in an ocean of competitors all vying for the attention of the prospect. Once you realize that demand creation is off your plate, you can start focusing your efforts on attracting qualified prospects and the faster your business will grow.
As agents, you are the “middle-man” paid a small percentage of the sale for your fulfillment efforts. Typically, money is tight and cash flow is unpredictable. Most are living commission check to commission check. As a result, it is critical to consider of all the resources at your disposal. Your attraction marketing program should consist of both strategic (long-term) and tactical (short term) strategies.
Strategic attraction programs are a costly proposition and the reason most businesses complain about all the money they are spending, but no one is buying. The reason is strategic marketing is about positioning and building rapport with your targeted prospects. This takes time. Many experts will tell you it’s more about “exposure” (I hate that word and so should you). If someone tells you this whether for advertising, charity donations, or any promotion – run away as fast as you can. You might as well flush the money down the toilet.
Your involvement in community as a great example of a strategic marketing. It helps position your expertise and build rapport with your prospects. This column is an example of strategic positioning and rapport building. Your blog should make a similar statement.
For those of you in a consortia or host program, most of advertising they provide is strategic. You can typically participate in various levels of their programs that cater to your specialty or niche. Because these programs are funded by the suppliers, your cost is little or nothing. Most will allow some customization, so you can add a positioning statement as well as the products featured will send a message to your target prospect. Many suppliers offer similar programs, sent on your behalf, for minimal cost. Use them. Despite what you hear in industry surveys, they do work – if they didn’t, suppliers would discontinue funding the programs.
My recommendation is to focus your personal attraction marketing efforts on tactical strategies. These are the local activities that make the phone ring. When I was a kid, I learned to fish by putting a worm on a hook, throwing the line in the lake, and wait, and wait, and wait. You get the picture. When I did get a bite, it often wasn’t a fish I wanted to keep, so I would go home empty handed.
On the other hand, if you know exactly what you want kind of fish to catch and cast your line with the right bait in front of them again and again, the odds are much greater you will catch more and bigger keepers. The key to tactical promotions is putting the right bait in front of the right fish and this is typically lead- in pricing. Most tactical promotions are price driven, however that doesn’t have to mean price driven products. If you want to sell World Cruises, the lead-in price may be $75,000 – a relative bargain for that product.
Tactical promotions should have a strong call to action. Price + limited availability = Urgency. If an offer is valid for one week, you typically see 40% of the sales within the first day, but don’t get discouraged. Up to 50% of the sales will take place on the final day. Why? People by nature are procrastinators. They wait until the last minute to buy, but it’s your job to remind them that time is running out.
Attraction marketing is a reactive strategy that is taught by almost exclusively by most industry experts. However, when combined with a proactive prospecting strategy, you will have more prospects than you can handle. You guessed it, the next step in the Travel Agency Transformation System is Prospecting.
Dan Chappelle is a professional business advisor, sales coach, author, and speaker specializing in the travel and tourism industry. His training and consulting firm helps develop sales oriented business leaders and entrepreneurs. His best-selling book, Get Your S.H.I.P. Together: The Wealthy Travel Agent Guide to Sales, is available on Amazon.com.
For information on Dan’s business development programs, visit: www.DanChappelle.com