Measuring Marketing – a Guide to Ensuring a Positive ROI
After nearly a decade of working closely with holiday parks across the country, I have a unique insight into the marketing challenges tourism properties regularly face, especially what marketing activity works and how much should be spent.
How much should you spend on marketing? And if you could double that spend, how much more business would you see?
In simplistic terms it would seem obvious that if you spend more on marketing, there will be a line-up at your gate. However there should be a requirement, as any investment needs, to provide a return but it is not that simple. It is a challenge that all tourism operators face.
An investment in infrastructure is easy to understand and measure. A new swimming pool costs $100,000. In peak, rates go up by 15% in year one. Guests, particularly those with children, happily rebook for the next year. Rates go up again. It is a pattern that works well and the investment returns value over a number of years. This could easily be considered good marketing, to build and attract return patronage.
Of course improving your property has great benefit in building the value of your asset and generally the return is easy to calculate. The principle of ’cause and effect’, (invest and receive a direct return) is very much the same for marketing expenditure.
Ideally tourism businesses should have a marketing budget of between 5-10% of turnover depending on whether you are launching a new concept or building on repeat business. Typically the caravan and camping industry only allows around 2-3%. This is far too low in what has become a very competitive sector of tourism accommodation.
The key is to have effective measurement tools for all elements of the marketing program. While this may appear straightforward, it is astounding the number of operators who do not measure any of their marketing activity. Why not? Some say it is too hard, while others just don’t like the answers!
Again if we draw a comparison with operations – if the loo is regularly blocked, persistence will find the right way to fix it. If the marketing isn’t working well and not being measured, the lack of results can remain invisible to management for years.
Marketing should be about delivering short-term results and long-term benefits. That is, deliver sales now and contribute to building the brand or product profile over time. A good marketing plan should provide cumulative results. Each new campaign should build upon the one prior and provide a stronger platform for the ones that follow.
How, and what, do you measure? The ‘what’ is easy – measure everything that will make a positive contribution to your bottom line. For example, a million visits to your website may make you feel warm and fuzzy but all that is meaningless if there are no bookings that come as a result. The real measurement needs to be what counts – and that is what you put in the bank.
The ‘how’ is a little more complex and depends on the objective of the marketing campaign in question. Is it general brand building that needs to be measured through research, web marketing that can be measured by unique visitors to the website (including social media pages) and resultant enquiries and bookings, media advertising that has a specific call to action that can be measured by active respondents or event marketing that can be measured by respondents and sales or sales enquiries.
In the park industry guests can arrive years after visiting a stand at a consumer show. These shows have been found to be incredibly successful over time at building the profile of the brand or the park. But you still need to be able to quantify that success. That’s why you need to see an immediate result in the short term through the building in of a call to action and a deadline that can give you an understanding of the likely success of the show or the campaign and therefore how it directly relates to the investment you have made.
You must clearly identify what you are trying to achieve with each element of marketing activity and establish a set of monitoring, measurement and reporting criteria that will tell you what’s working and what’s not.
The most important rule you can follow is – if you can’t measure it, you can’t determine its true value. And if something doesn’t add value, why do it?
Terry Goodall
Goodall Dineen Group
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