Marketing 101

Would you send your client on a trip without an itinerary? Then why do it with your agency? In today’s rapidly changing travel market, experts say agencies, now more than ever, need to develop such road maps for themselves by drawing up and continually reviewing comprehensive and strategic marketing plans.

“If you don’t have a marketing plan, it’s like saying you’re going on a trip but don’t have a map,” says Marc Mancini, travel industry consultant and president of Los Angeles-based Marc Mancini Seminars and Consulting.

And a lot is at stake: A dynamic marketing plan that accurately targets key customers and effective outreach strategies can significantly boost new and existing sales, build an agency’s brand in an increasingly competitive industry, solidify customer loyalty and retention, identify new channels to drive incremental revenue and establish a long-term foundation for future growth.

“You have to know your own business and where you want to grow your business,” says Lois Shore, senior vice president of sales and marketing for Ensemble Travel Group. “You have to have a road map to where you’re going. You can’t just market.”

A solid marketing plan as an integral part of an overall business plan gives an agency a strong understanding of its focused target markets, as well as outlining a long-term strategy for tapping them with cost-effective strategies and tactics.

“The more information you have about your customer, the more targeted you can be in your approach, and the higher the likelihood that you will be successful with your marketing,” says Ignacio Maza, executive vice president of Signature Travel Network.

Still, it’s estimated by some that as few as 25 percent of travel agencies have formal marketing plans and even those that do have marketing plans may not be re-evaluating them often enough in today’s tumultuous travel market.

And those are some of the biggest mistakes an agency can make.

“The business climate is continuing to change very rapidly. And that rapid change is going to continue and maybe even accelerate, and that’s probably one of the main reasons to have a marketing plan,” says Scott Ahlsmith, president and CEO of Magellan Travel Technologies Inc. and chairman of The Travel Institute.

“More important, it’s a benchmark for opportunities that come flying along. Instead of just succumbing to what I call the ‘shiny object syndrome’ & you want to have some benchmarks that let you [determine whether] new opportunities are better than those you have already driven a stake into the ground on.”

Says Joel Chusid, chairman of the Association of Travel Marketing Executives: “Those that will survive will have a marketing plan and a niche.”

It doesn’t have to be daunting to come up with a marketing plan.

“When you draw up a plan, you want to write a mission statement,” says Mancini. “Most times it’s as simple as something like, ‘We want to be the best travel agency in Omaha selling rodeo packages.’”

But there’s also something Mancini calls the “money mission.”

“The money mission is focused on the net profit and what you want it to be for a year. It’s the equivalent of the kid on a trip saying, ‘When are we getting there? And what’s going to be there when we get there?’ The marketing plan tries to answer that,” Mancini explains.

There’s also what Mancini calls the “magnificent mission what you want to achieve for yourself and people. For example, I want to make people happy by giving them amazing trips.”

Clarify those overarching elements and the next key to achieving those goals is setting out how to distinguish yourself in the marketplace.

“That’s the USP the unique selling proposition,” says Mancini. “That may be the most important thing that you figure out in the marketplace. How do I make myself different from others?”

MARKET ANALYSIS
A key goal of a marketing plan is assessing industry and customer trends. Only after researching the market can an agency determine whether a particular specialty or service has a viable target market and how to reach it.

To start, experts urge agencies to review their current customer mix.

“Take a look at your existing customer base and segment it based on their traveling preferences and purchasing habits,” says Clark Collins, executive vice president of marketing for agency consortium Virtuoso.

How old are they, what’s their gender and income, where do they live and what are their buying patterns? How did they learn about your agency? Where do they shop? What do they read, watch, listen to? What qualities do they value most about your agency selection, convenience, your personalized service?

“It’s not just about new customers it’s now about retention,” says Chekitan S. Dev, associate professor of tourism marketing at Cornell University in New York. “There’s a business truism I use that is that it’s five times as expensive to recruit new clients than to retain them.”

But if there’s a new market you want to tap, check that out in depth as well.

“If you can envision concentric circles that’s how I like to view market research,” says Collins. “Place your existing customers at the center and build from there. Working your way out to the next layer, go to your sources. & Working your way out to the next layer, talk to your suppliers. They may conduct their own research, which they may be willing to share. & Your outer circle includes the primary research created exclusively for you.”

Finding the niche that fits will be key, says Chusid, who notes that top agents in a recent issue of Conde Nast Traveler all had a very specific, detailed forte.

Mancini suggests tapping marketplace studies and identifying targeted publications, groups or organizations that cater to specific types of customers.

“A lot of members of [Cruise Lines International Association], for example, don’t realize it does surveys and analyses, and they share those things with agencies and members,” he says. “In this business we can’t do the primary research, you have to look at secondary research. For example, specialty magazines & you can contact them as a potential advertiser, and they will send you a press packet that has all the demographics of their readers.”

The U.S. Census Bureau also has demographic information online, says Ignacio Ponce de Leon, vice president of strategic planning at Navigant Marketing, a travel marketing and advertising firm in Miami.

“That’s one of the key research sources that I use,” Ponce de Leon says. “Their information is nationally, by state, by county, by ethnic groups & you can even go by history and can even project future demographics into it.”

Also be sure to assess your agency’s “SWOT” strengths, weaknesses, opportunities and threats, Mancini says.

“This really forces you to think in ways you don’t realize,” he says. “For example, you might forget what your strengths are that you have a deep knowledge of Fiji and you could sell that. Or that you’re into scrapbooking did it occur to you that you could sell to scrapbookers? Maybe you’ve never stopped to think what competitors are doing to take advantage of your weaknesses. There also may be opportunities you may not have thought about.”

STRATEGIES
Understanding the target market as well as your strengths and weaknesses opens the way for determining how to strategically reach your market as part of your plan. But there’s no magic bullet.

“Nobody exactly knows where to spend money,” says Mancini. “A marketing plan may clarify the picture, especially a SWOT analysis. So you’re not just throwing money at everything.”

But experts say one thing is clear, the more targeted and focused the efforts, the more effective an agency will be.

“We use a household segmentation program on our direct-mail list that helps us understand not only demographics, but how consumers behave, who they are and what kinds of words appeal to them,” says Shore. “It’s an integrated program to get as much customer information as possible [so we can make] the right offer to the right person with the right triggers.”

Still, how does one choose which marketing venue is best amid dozens of choices everything from online banner ads to traditional newspaper advertising and e-mail blasts?

“You need to determine what you can afford,” says Chusid. “And Customer Relationship Management is very important that you’re talking and listening to your customers maybe sending e-mails or a newsletter every six months. It will help you maintain customers and gain them.”

Jeff Gayduk, president of Premier Tourism Marketing, suggests cultivating new groups within local communities.

“With the explosive growth of niche and affinity group tourism, those that are positioning themselves in front of the garden clubs, outdoor and sports enthusiast and Red Hat societies with viable offers will be poised for growth,” he says.

Any efforts should be targeted.

“You might send an e-mail blast to 10,000 and get 1,000 responses, but even if it’s free, the cost is that you risk annoying 9,000,” says Dev. “It may be, ultimately, more costly to do that, because you’re alienating and damaging relationships. ... Market smart.”

Consortia such as Signature, Ensemble and Virtuoso have also stepped up marketing aid and support for agents, offering members everything from print and online to customized consumer Web sites.

Travel suppliers, such as cruise lines and tour operators, also offer marketing tools and aid for agents, and a growing number of technology companies are boosting marketing efforts, such as TRAMS Marketing Advantage, which uses marketing technology to focus on client database management and Internet promotions.

Technology holds a key that many say can be tapped to boost marketing efforts. Ahlsmith notes, for example, that he launched a blog about two years ago that now gets 6,000 unique visitors every month.

Last month, he launched another blog romance-in-paradise.com that he expects will be generating at least $1 million in the next year.

“The nice thing about today’s marketing is that so much is at little or no cost,” says Ahlsmith. “You can buy a domain name for $9 a year. Put up a blog for $5 a year or get a service for $30 month. & You can send a letter to newspapers for 39 cents.”

Marketing, ultimately, is about communication, says Shore.

“Have a focus group of your best clients and ask them ‘What would attract you?’” she says. “I think there’s a lot of creative, grassroots ways that make it simpler than people think it is.”

Maza of Signature suggests targeted direct mail, e-mail and online marketing that ensures there is a strong offer, and that the right offer is going to the right client. Frequency is important for regular clients.

Shore also notes sometimes agencies that join together in marketing efforts and campaigns even amid the risk of increased competition can find greater success.

“One of the most creative things if you have friends in the industry and know other agency owners sometimes you can band together to get more than independently,” she says.

Ultimately, despite low-cost efforts, marketing does take money. How much is enough?

“There is no rule of thumb anymore,” says Maza. “The old adage was to apply 1 percent of your sales to marketing but we have found that every agency is different and that what applies to some, does not apply to everyone anymore. What really matters nowadays is what kind of support the agency is getting from their network/consortium.”

Ponce de Leon notes that, depending on the company and industry, a national standard generally is roughly 3 to 5 percent of total revenue. But it varies widely.

“We have some clients who are completely in a different role,” he says. “I used to have clients in Vancouver who used to go 15 percent of total revenue. & It just depends on the client.”

A key in spending on marketing, though, is to make the efforts trackable.

“There needs to be a system in place for tracking before you do something so you can tell the costs,” says Shore.

BENCHMARKS
In the end, a marketing plan is only good if it’s working. Setting realistic, tangible and measurable goals, tracking and controls are key.

“They should be quantifiable & so that six months from now I can see if I am making the goal,” Chusid says.

But be reasonable.

“If the goal is to double revenue & what does that take? You have to have the tactics behind it. Every quarter you pull out the marketing plan and adjust it,” Shore says.

Benchmarking goals can be based on everything from ROMI (Return on Marketing Investment) and revenue increases to rising net income and number of trips booked maybe a 10 percent boost.

But Collins notes that measurement metrics will depend on an agency’s cost structure and should measure both quantitative and qualitative results. It can be measuring qualitative metrics such as awareness and perception or a “satisfaction index” following up with customers after their trips, says Maza.

Collins suggests tracking calls, business cards and bookings.

“Track the dollar amount of the transaction and the number of clients booked. Work to grow your higher-yielding transactions,” he says.

Set the goals and track the marketing efforts. Then see what happens in six months and remain flexible.

And what if it’s not working if you’re not hitting those targets?

“If something’s not working cut it fast,” says Shore.

That’s not to say revamp the entire marketing plan or pull the plug on all efforts, just review how the plan is working and readjust if necessary.

And while return on investment is clearly the bottom line of a marketing program, many are quick to note a long-term vision is also vital.

“The truth is that if you would really like to be successful in this, really put your feet on the ground,” says Ponce de Leon. “You have to be on top of every move and everything that is going on in the market because one day that market can take you places or it can close your company.”