Get Ready for Primetime Marketing In 3 Steps – Part Two
How to Get Your Aviation Marketing Ready for Primetime – Part 2
As discussed in our previous post, there comes a time when a successful business comes to the realization that they need to step up their marketing to a more professional level to achieve their business goals – in other words, they are ready for Primetime.
Getting ready for Primetime can be broken down into three sections relating to marketing:
- Understanding the Marketplace – the trends, threats, issues and opportunities that affect the aviation industry and have a direct impact on your business.
- Setting Goals – these should be S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, Time bound) goals that your business seeks to achieve to define success.
- Developing a Plan – the plan will include the marketing tools to be implemented that will help you to achieve your business goals. The plan should include when these marketing tools will be implemented, who is responsible for their implementation, along with funding of your marketing effort to achieve these objectives
In this edition of our newsletter, we will explore the second of these three steps to getting to Primetime. Look for the third step in our next post.
Step Two – Setting Goals for Your Business
A question I often get asked is “how much money should we spend on marketing?” My answer is “the least amount that will achieve your business goals.” The response I frequently get is: “Goals? What goals? We don’t have any goals?”
Every business should have specific sales projections or other business objectives they want to achieve. These should be coupled to a time period, such as six-months, one-year and five-years.
If you and your staff are committed to reaching these goals, you may find in ten years you’ll be able sell your business for a nice profit and retire to Tahiti.
Without goals, you’re flying without a magnetic compass – let alone a GPS. So begin to develop goals for your business and then track them religiously.
Your goals should be S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, Time bound). The more specific they are, the better your success in achieving them.
You Have To Spend Money to Make Money
Referring back to the question: “how much money should we spend on marketing?” I will show you a method you can use to establish a budget to achieve a common business goal – increasing sales.
The first step in establishing a budget is to begin tracking your sales and the approximate cost it takes to acquire a new customer.
Here is a basic blueprint to help you develop a marketing budget for increasing sales and growing your business. Let’s begin with the following parameters:
This Year’s Goal: To acquire 10 new customers.
- Let’s assume you achieved your goal of acquiring 10 new customers that each generated on average $10,000 in revenue ($100,000 in gross sales)
- After deducting direct costs, expenses, salary and overhead, your gross profit was $1,000 per customer ($10,000 total).
- However, because you’ve been diligently tracking your marketing and sales expenses, you determine it costs $1,000 to acquire each new customer, which unfortunately eats up all your profits.
Before you get discouraged, let’s look forward to next year…
Next Year’s Goal: To increase sales by 30%
To achieve this goal you would need to secure 13 new customers. So how much should your budget be for next year? If you said $13,000, you would be right!
Here’s how we determined this amount:
- First, you have $10,000 budget from last year (which of course you’ll roll over to this year).
- Plus you have 10 new customers from last year, AND because you provide such excellent service and value, you estimate you will retain five of them, which will produce about the same revenue as last year.
- Because there were no sales or marketing costs for these repeat customers, your business will realize $5,000 of additional gross profit, of which $3,000 will be allocated to this year’s marketing budget giving you the $13,000 budget you need.
- AND your business will net a $2,000 profit for next year.
Can you apply this disciplined approach to your marketing budget? As you can see, if you keep growing your business and are diligent in tracking new customer acquisition costs, you can grow your business quite nicely year over year.
If you would like more information on how to setup and effective marketing budget, you can read how in our book titled: Full Throttle Aviation Marketing.