Business plans Bushnell and Bushnell

Marketing on a Dime - A Practical Plan to Lower Cost/Higher Payback Options

By Scott Bushnell

This article first appeared in the Innkeeping Newsletter (Professional Association of Innkeepers International), November 7, 2008, Volume 2, Issue 8

In these struggling economic times, it is no secret that innkeepers, as with all Americans across the nation, are skimping on expenses, tightening the belt a couple of notches, reviewing budgets to look for savings opportunities and deferring expenditures until a time when the checkbook looks a bit stronger. Most of us innkeepers are feeling a slowdown even in the typically strong fall foliage season, and, with the slower months of the winter and early spring facing us, there's a worrisome knot in our stomachs.

We are in a dilemma…our good judgment is telling us that we need to strengthen our marketing efforts to win our fair share, (at least), of the shrinking demand in the traveling market. But the marketing account is usually one of the first line items to bear the brunt of the expense cutting eraser. It is one of the more controllable expenses, easily slashed in order to save the dwindling balance in the checkbook for more urgent needs as the electric bill or payroll. Our good intentions defer the marketing budget to next month, when we hope we can afford it…or the next month…or the one after that.

The High Cost of Marketing

The 2006 PAII Industry Study (thank you!) details the average expenditures for marketing:

1-4 rooms	$3,175	4.6% of annual sales
5-8 rooms	$7,033	4.7%
9-12 rooms	$10,687	2.9%
13-20 rooms	$18,350	3.8%

Regardless of the size of the inn, the 4% or so of room revenue may now be needed at this difficult time for the more urgent needs of keeping the inn open…even when we know that marketing is a catalyst to bringing in those guests…a real-life Catch 22.

It is also true that effective marketing is often characterized by multiple exposures to the public in order to gain and maintain the "top of mind" position. So if we do our marketing efforts effectively, we need frequency regularity in order to bombard our targets with enough messages to achieve that "top of mind" advantage. But that also makes our expenditures frequent and regular…painful in these watchful times.

There are several Marketing Channels that are, by nature, high cost approaches to getting the word out there.

• TV/Radio: Per the 2006 PAII Marketing Survey of 497 inns, only 13% of inns used this approach and usually spent less than $500 when they did, probably indicating low-frequency exposure.
• Print Advertising: often $100's of dollars per ad…and they want you to have ads in multiple editions.
• New or redesigned websites are expensive, perhaps $3-5000 (plus hosting+search engine optimization+services+maintenance+tracking+etc.)
• Even direct mass-mailings with the cost of design/printing and postage can be painful.

Enough of the high cost of marketing, I'm getting a headache too.

A Remedy for the Pain

There's a lower cost alternative which, WILL, be more effective anyway! But it may take a real change in your daily habits. Marketing is not a once a month or once a quarter effort…you live it everyday, do something everyday, and your behaviors, everyday, reflect your priorities. This is not a total departure from some of the things you are already doing, but let's ensure you focus ONLY on the efforts which reap returns…and most of those efforts can be low cost alternatives.

What Should We be Doing?

The PAII Marketing Survey of 497 inns issued in 2006 helps us with setting our priorities. Innkeepers were asked to rank the following list as "strong", "moderate" or "weak" Sources of Referrals. The results here show the list ranked with the totals considered strong or moderate sources of referrals:

	Source of Referral	Strong or Moderate
1.	Past Guests	96%
2.	Search Engines (e.g. Google)	94
3.	On-Line Directories	90
4.	Other Internet (e.g. newsletters, pay per click, etc.)	87
5.	Friends/Local Businesses	82
6.	Associations/Other Inns	67
7.	Chambers of Commerce/CVB/Welcome Centers	66
8.	Paid Advertising	63
9.	Review Sites (e.g. TripAdvisor)	47
10.	Guide Books	41
11.	Phone Book	17

The first five are BOLDED for a reason…they are the most significantly effective sources of referrals. And in a time when we can't afford to do everything, let's focus on the most effective.

High Relationship Marketing

We are in the people business. Our inns are successful because our guests enjoy the personal connection with the innkeepers that they cannot find at the Holiday Inn. They LOVE being addressed by their first name when they return from a busy day at the corporate meeting. They LOVE when you remember their son by name when you ask how his college experience is going. They LOVE when you remember they like cashews, not almonds, with their glass of wine. It's what we do best…we provide the personal connection.

Let's apply the same concept to various aspects of our marketing efforts. Three of the top 5 sources of referrals come from Past Guests, Newsletter or e-Mail-type Mailings, and Local Networking…all areas of opportunity to do what we do best…make the personal connection.

• Personal notes (always handwritten and labeled)
• Personal (not mass-mailed) emails specifically written to just them
• Personal visits to the local contacts in the neighborhood (the gas station attendant who often is asked "Where's a good place to stay?" or the admissions office at the college, or the restaurant where you send guests. These are your AMBASSADORS who will market your inn for you.
• Socializing at the Chamber's monthly mixer, volunteering to hold the next one at your inn.
• You have thousands of these ideas…but apply the personal touch.

Who do I Target as my Audience?

You have a database of names and addresses. It's time to sort the list into four "effectiveness" categories. After all, you can't afford to market to everybody all the time. Let's focus on those targets that will give us the highest return for our efforts:

• A's: Repeat guests, your Ambassadors, family, friends, stakeholders
• B's: Past and Potential guests, inquiries
• C's: Vendors, local businesses
• D's: Inactive list, maybe should be your Delete List

Do monthly maintenance on this list to keep it current and vibrant.

The Practical Plan - Bringing it All Together

• We know What to Do: Let's focus on the 5 top referral sources (Past Guests, Search Engines, On-line Directories, Newsletters & emails, and Local Networking).
• We know How to do it: Let's use our abilities for personal connections and high-relationship to our advantage.
• We know Who to Market to by targeting our efforts at our prioritized database.

Now let's apply some reasonableness and good judgments to:

• Satisfy the requirement for frequency regularity and multiple exposures
• Manage the overall budget of our plan (that's why we're here!)

Notes about the above plan:

Item A: Set an annual budget. Watch your tracking device monthly. "Fire" any directory that is not performing and buy another.

Item C: Check out different services. 500 addresses option is probably enough. You can buy tracking of effectiveness (how many get read, etc.) for just a few bucks more per month (a good feature to manage your customer database).

Item D: Find small, low cost cards…they can be seasonal (less than $.25 each + $.42 postage)

Item G: If you don't have a box of rack cards already, it's about $350 per 5000 to have some professionally printed. Don't use a self-made tri-fold.

Item J: Budget $200 per event (for crudités, sodas, cookies). Package with local winery or restaurant to provide hors d'oeuvres in exchange for exposure at the event and press release coverage.

Item L: It's only about $30 per room night variable cost to you. Schedule or restrict use to off-season, mid-week to avoid losing real bookings.

The Total Annual Cost of the above program is $1711, about $143 per month spread evenly throughout the year, an easier nut to swallow than huge chunks of marketing money hitting the checkbook all at once. This total cost is about HALF of the average marketing budget for even the smallest inns. And the strength of your Marketing Program is maintained! When targeting the ambassadors of your business, you are using the channels that are the strongest sources of booking referrals, and using a frequency regularity that will keep you "Top of Mind".

You CAN Revamp your Marketing Plan

Be creative with tailoring the plan to YOUR personality. The hardest part will be changing your daily habits to spend a few minutes on marketing. Writing 25 personal notes to you're A's and B's per month is only one per day. Or maybe every Wednesday, over lunch, you jot down a personal note (just a few "thinking of you" lines) to 7 of your best customers. And sending a newsletter out quarterly takes only an hour or two of design and inputting into the standard templates offered by the service. Your quarterly emails to your A's, B's, and C's can be sent out in months off-cycle from the newsletters. But all these activities need to be scheduled on your daily calendar's To Do list until the behavior becomes a habit (about 30 days…really!). Schedule time on the calendar to critically review your tracking device and update your database.

Think of the impact to your A's and B's…they will get a newsletter from you 4 times per year, a personalized email 4 times, and a handwritten note from you a couple of times per year (one can be your Christmas card) for a total of TEN contacts per year! You will definitely be "Top of Mind" with your strongest sources of booking referrals. This is a GUARANTEED plan which WILL give you a HIGH RETURN on your low investment, a critical need during this time when prioritizing expenses, without sacrificing marketing effectiveness, means so much to the survival of the business.

Copyright Scott Bushnell 2008, All Rights Reserved