- Wednesday 07 March 2018
This guide will assist you to develop a more structured approach to your marketing efforts if you are doing little in that area at present. It is designed to help you gather some relevant information about your markets and customers, so that you will have a clearer picture of where your business currently stands and what potential sources of business you could attract.
The quality of the information you gather about your business will determine how successful your future marketing efforts will be - so it is worth spending time on this. Upon first glance, this may seem very convoluted for a small business, but don’t fall into the trap of thinking that marketing can be managed on an ad hoc basis.
Hospitality and tourism has become extremely competitive in recent years and every business, regardless of its size, must clearly identify potential markets and focus the limited resources available into gaining and maintaining a share of those markets. In many cases the smaller the business the more limited the resources - and therefore the more focused the marketing effort must be.
This guide has been designed to help simplify the marketing research process for you and to provide a step by step approach to focusing your marketing efforts.
CONDUCTING MARKET RESEARCH
The starting point in any planning activity is to look at the present position. Before you can market your offering effectively you must target your efforts. To do this involves taking a holistic view of your business, guided by the questions ahead. It will be useful to have a note pad handy, or a word document open on your computer, to help you complete the exercises as you move ahead.
Examine your current product and services
First, list the products and services that you currently offer. Then, list the products and services that your competitors offer. If it is easier for you, pick your closest competitor only.
Think about what the strengths and weaknesses are of your product/service compared to your competitors. List them.
When you have identified the strengths and weaknesses of your offering against that of your competitors, now examine how you might address some of these weaknesses.
So far you have looked at your own product and service and compared it to that of your competitors. What if anything have you learned about your operation after completing this initial exercise? Make a list of the points you identify.
Before moving ahead, sum up in one sentence what you believe makes your offering more attractive to present and potential customers than that offered by your competitors.
Examine your existing customers
Now look at your existing customers and answer the following questions. Put as much information down on paper about your customers as possible. It is unlikely that you will have accurate information for all questions - but don’t be put off by this, try to estimate the % as close as possible.
Before analysing your customers, think about this interesting question: if you went out of business tomorrow, what would your customers miss about you?
Now reflect on the following questions:
- Where do your present customers come from? Local, domestic, international etc. Try to put percentages for each broad market source and be as specific as possible. For domestic, what parts of the country are they mainly from; for international, what countries precisely
- What type of Visitors are they? (Individual/Group/Family etc. - Business/Leisure etc). Again, try to put percentages against each type
- On Average how long do they stay with you? Categorise them by length of stay: 1-3 nights, 4-7 nights etc., with the broad percentage in each.
- How do they find out about you? (word of mouth/referral, web search, social media, advertising etc.)
- What are your main distribution channels at present? How do customers book with you? (Direct - phone or website, via third party etc.). Make a special note of what percentage of your customers comes to you via a third party.
- How much fees/commissions do you pay to secure that business? How might you reduce that dependence over time?
- What do your customers think of your offering? What percentage think you: exceed expectations, meet expectations, and under-deliver against expectations. Be brutally honest here.
- What are the most regular positive comments you get about what you offer? How about negative comments? How is your online reputation at present? Positive, neutral, negative?
- On average, how much do your existing customers spend with you on each visit? If you have different products and services, break the spemnd down by component.
- Can you think of any other information about your present customers that might help you to better profile and understand them?
From the answers to the above questions, what conclusions can you draw about your existing customers? From what you know about your competitors, are they attracting certain types of business that you are not getting? If yes, what do you know about this business and why does it go to them not you?
Examine your current marketing activities
Now examine your current marketing activities. Base your examination upon the past six months.
- How structured is your marketing effort at present? Do you create an annual plan, based on solid research and budgeted for appropriately?
- What marketing and promotion methods do you use? i.e. Digital Marketing and Social Media, TV, Radio or Print Advertising, Trade Shows, Direct Mail etc.
- What did you spend on each main marketing activity over the past six months?
- What return did that investment deliver? Can you/do you measure the effectiveness of your marketing efforts?
- Are there any conclusions can you draw about your Marketing activities?
ANALYSING ECONOMIC AND MARKET TRENDS
The Business environment within which you operate has a major impact on your potential to attract new business and maintain your existing market share. How the economies are performing in your source markets will naturally affect the number of customers coming from those markets.
Equally, the general market trends and the distribution of customers within your country will also have an impact on domestic business. Therefore, it is important that you constantly examine current and future trends.
- What are the general economic and market trends that are likely to impact on your business in the short-run? How prepared are you to respond to these trends? What more could you do?
- What are some of the trends that will potentially impact your business in the medium/long term? Think about changes in market dynamics, customer habits, technology etc.
- Is there anything you should/could be doing now to start preparing the ground to meet those challenges on the horizon?
Summarise your research
When you have completed all your research guided by the above questions, prepare a SWOT analysis on your business, remembering that:
You need to summarise the internal Strengths and Weaknesses of your business
You need to capture the external Opportunities and Threats facing your business
The SWOT analysis¹ will act as a summary of the information you gained from your research. Of course, at this point, you've only completed the first step of the marketing process, but if you have devoted some time and effort into your research, then you will at least have a good foundation to plan ahead.
To do so you will need to start thinking about issues such as:
- What existing business/markets/segments would like to further develop?
- What potential new sources of business you would like to target?
- Are there any markets you are currently in that you should exit because you really can't compete?
- Based on these general findings, what would you hope to achieve over the next year?
- What business development objectives would you have for the next 1-3 years? Be as specific as you can by defining goals for each segment (i.e. To increase bednights in a certain segment by X%) or for sales/revenue growth (i.e. to increase food sales by Y%). It's really important to be as clear as you can be by defining a set of goals for your business using the SMART model (Specific, Measurable, Achievable, Realistic and Timebound).
With solid research completed, and clear goals defined you can then think about defining the 'how to' in terms of achieving each of your goals.
In a small business, resources are always scarce but try to find the funds necessary to bring in appropriate marketing expertise to help you plan and implement your marketing effort. Particularly in relation to Digital Marketing, it's a specialised area so get help where you can.
A final point to consider as you plan ahead is how you can start gathering data from now on that might help you to better research and plan in future. For example:
- How effective are your customer feedback systems at present? Could you learn more from your existing customers?
- How good are you at tracking your competitors, near and far?
- Are you using your membership of trade associations, or your national organisations to gather as much market and economic data as possible?
- How effective are your non-financial reporting systems in your business?
Improving your data collection capabilities now will make the marketing planning effort more effective in future and doesn't have to be an expensive exercise.
© Dobiquity Limited