Marketing Plan

How much should you budget for marketing?

Determining your marketing budget
Is your marketing budget enough to achieve your goals?

Many times when I talk to companies about their marketing, they’ll ask: “How much should we budget for marketing?”

It’s an important consideration, as most small aviation businesses don’t have large budgets to spread around.

My answer: “Spend the least amount needed to achieve your business goals.”

How much is that?

The best method I’ve found for determining your particular marketing budget is actually quite simple:

  1. First, identify your annual goal for revenue.
  2. Next, divide it by the average sales revenue each customer generates in a year (in other words, a customer’s annual value).
  3. Then, multiply that number by your CPS – Cost Per Sale – what you currently spend on advertising, internet marketing, public relations, promotional materials, etc., to close each lead.

That’s what you’ll need to budget to reach your target. The equation looks like this:

Marketing budget = (revenue goal ÷ average customer sales) x cost per sale

The key to making this equation work is to have accurate numbers for the average customer revenue and your CPS. So if you haven’t done so already, begin to track the effectiveness of your sales and marketing efforts religiously. Once you start tracking sales, you should be able to calculate how much money it takes to obtain each new customer.

Use this Budget/Tracking Chart to calculate how much money it costs to generate each lead and close each sale:

A. Current annual marketing expenses
B. Average number of leads generated per month
C. Average number of sales closed per month
D. Conversion ratio ( [C ÷ B] x 100 )
E. Cost per lead ( A ÷ [B x 12] )
F. Cost per sale ( A ÷ [C x 12] )

Understanding these numbers will get you off to a good start. However, there’s another important factor to consider: how to spend the dollars you’ve allotted for your budget.

Why Most Marketing Campaigns Fail

The most common reason why marketing campaigns fail is that they’re asked to do too big a job on too small a budget. Do you realistically have enough marketing dollars to ensure a good shot at achieving your objectives?

A great marketing plan may include a lot of tools and tactics, but to implement them effectively takes proper funding. Choose which ones you’ll use carefully. Just as it’s a mistake to spend too much on a single marketing tactic, it’s equally wasteful to attempt too many things superficially. It’s much smarter to select a few marketing tools that are cost-effective and demonstrate good results and concentrate your marketing dollars on these.

If you hit a ceiling in the amount you can afford to spend, it’s best to reassess your short-term and long-term goals, rather than expect an underfunded program to perform beyond reasonable expectations.

As an avid pilot, there’s an analogy I like to use: If you don’t fund your marketing budget sufficiently, it’s like trying to fly over the Atlantic Ocean with half a tank of fuel. You’re going to make some progress, but you won’t make it to your ultimate destination.

You may discover that carefully planned campaign with an adequate budget won’t get you across the Atlantic, but could instead get you to beautiful Bermuda. And that’s not half bad, is it?

If you could use help creating a smart marketing budget, contact us.

Photo by 401(K) 2013

There’s No Quick Fix in Marketing

Effective marketing requires a long-term strategy
Want lasting results? Develop a long-term marketing strategy.

Double your bottom line in minutes with this simple trick!

If you read that promise in an email, blog post or ad, you’d be understandably skeptical. It’s because deep down we all known such an offer is too good to be true. And yet many businesses still look for a magic marketing pill that will get them the golden goose.

It’s a natural reaction to the increasing pace of business today – everything seems more urgent. Businesses feel pressure to keep up with rapid changes in technology, to jump on board the latest trends and produce returns more quickly. What you’ll often see, as a result, is a focus on short-term gains at the expense of long-term strategy.

In an article for Business Insider, ad man George Parker describes how this is playing out in the advertising industry. He sees both agencies and their clients chasing “instant gratification” over quality work and strong relationships.

For instance, he notes the rush to get easy clicks and “likes” on social media platforms like Facebook, which may build an audience, but how does it translate into sales? Parker says:

“As short-term social data they are rarely actionable in long-term brand building. … Simply put, agencies and their clients are confusing clicks with content and media with message.”

I’ve noticed a similar trend in aviation marketing – the expectation that a few simple tricks or tactics can generate immediate success. I call it the “FedEx Mentality,” when businesses assume great work and impressive results can be delivered overnight.

Unfortunately, that’s just not how effective marketing works – particularly in aviation, where it can take months to build trust and nurture qualified leads.

To reap real results, your marketing efforts should build upon a six-month, one-year or five-year strategic blueprint. Otherwise you might see a temporary spike in buzz or sales, but no lasting effect. That creates an endless cycle of emergency marketing, leaving you scrambling from month to month without really gaining any ground.

The same goes for the concepts and ideas that make up successful marketing campaigns. They require careful planning and time to take shape if they’re going to land squarely on your target. In marketing, the most efficient path actually means taking the longer road.

Rushed marketing is shortsighted and the results are short-lived. Effective marketing is thoughtful, focused and builds momentum over time.

Sure, it might sound less sexy to say: Build a solid foundation for future success with a carefully considered strategic marketing plan. But that’s what we do for our aviation clients. Because we know their time is valuable, we don’t waste it with the promise of a quick fix.

Read more posts about developing a marketing plan:

Choosing Marketing Tactics: Advertising

For More Powerful Marketing, Get Integrated

Image: renjith krishnan / FreeDigitalPhotos.net

Choosing Marketing Tactics: Advertising

Advertising - An Important Marketing tool
Advertising – an important component of
your marketing toolbox.

A big step in developing an integrated marketing plan is deciding which tactics will best support your larger strategy. You have to consider their individual strengths, weaknesses and costs to find the right mix.

And in aviation, complex, high-dollar sales are the norm, making the efficient use of marketing resources especially critical.

So how do you choose which tactics to implement? Over at the InSight Marketing blog, we’re featuring a series of posts on common marketing tactics – weighing their pros and cons and providing tips to use them more effectively.

In the first post, we delve into traditional advertising to help you determine whether it’s an appropriate tool for your next campaign. You’ll learn:

  1. Why advertising is still an important part of most marketing plans
  2. What it does better than online marketing
  3. Where advertising falls short
  4. 4 ways to get more from your ads

Read the post “Your Marketing Toolbox: Advertising” for more …

Marketing Strategy Vs. Tactics

Upside-down-house

Without a well thought out plan - you may end up with results that are not quite what you expected

One of the issues that continues to pop-up in marketing discussions with clients is the concept of strategy versus tactics; I thought it would be beneficial to explain the key differences.

Basically, marketing breaks down into three parts:

1. Set Goals: What do you want your marketing to achieve?
2. Determine Strategy: How will you achieve your objectives?
3. Select Tactics: Which marketing tools are the most effective for implementing the strategy and achieving the goals?

Let’s use the analogy of building a house to explain how each relates to another.

Setting Goals: This is simple; you want to build a house, but what kind of house? Will it be a Victorian mansion or a modest ranch? The more detailed your goals, the more likely you are to achieve them.

Strategy: When building a house, you do not start by randomly nailing 2 x 4 boards and building the framework; first, you need a “blueprint” to work from – one  that specifies the style of house: Colonial, Ranch, Victorian; size of the house, bedrooms, baths; materials to be used: brick, wood, stone, et cetera. In marketing, your building blueprint is your marketing plan; this is the document that explains the strategy you will use to achieve your goals.

Select Tactics: In home-building, carpentry, plumbing and electrical work could be thought of as the “tactics” used to achieve the end goal, in this case, a house. In marketing, the tactics you may use are advertising, public relations, online marketing and social media.

How does this approach work in marketing?

Well you don’t start by saying “I need a brochure,” that is a tactic.

First, establish your goals, e.g., increase gross sales 20% each year and by 10% next quarter.

Next, determine your strategy, such as “I will employ a direct-sales effort; my sales people will make face-to-face presentations to qualified prospects and close 20% of those efforts”. Your marketing plan includes the following critical information to support your strategy:

  • An in-depth demographic description of the customer base
  • The important reasons why customers will choose to purchase from this company
  • The key benefit that makes us unique and differentiate us from our competitors

Finally, we utilize our tactics: “We will use telemarketing and e-mail marketing to set up initial meetings; during these meetings, we will utilize a PowerPoint presentation and provide a competitive analysis brochure as a leave-behind with all prospective clients.

Getting Your Aviation Business Ready for Primetime – Step 1

When to take your aviation to primetime.As a marketing consultant to the aviation industry, many times my clients realize they need to step up their marketing to a more professional level – in other words, they are ready for “primetime.”

Step 1: “Houston, we have a problem.

What prompts this realization? Usually, it’s the acknowledgment that the status-quo no longer works:

1. Their past promotional efforts has been somewhat effective, but they have a strong suspicion they can get a better return on money invested.

2. Realization that the usual referral, or word-of-mouth business is not going to sustain and grow their business in the future.

3. Opportunities lost to the competition that is doing a better job marketing themselves.

4. They require professional structure and guidance in their marketing efforts to take this burden off current management.

5. They realize that sales is not marketing – and the best sales people usually are not the best marketing people.

6. Their brand image is dated, sales message ineffective, and their current marketing does not represent their company they way that they would like.

The best solution is to hire an experienced VP of Marketing with aviation experience and a passion for this industry. The cost of this marketing pro, with an assistant, office space, benefits, etc. can easily exceed six figures. Usually, that expense is far beyond the reach of most mid-sized firms.

Another alternative is to hire a marketing consultant with aviation experience. (I happen to know an excellent one, if, by chance, you need a referral!)