Advertising is an important part of your marketing strategy. I will cover strategy another time, but it would be the rare club that didn’t want to get new customers or keep the ones they have.
Right now, it is a lot easier to gain market share, if you have the money to spend. If not, the club or pub with the money stands a good chance of gaining market share and keeping it when things pick up.
To figure out how much to spend on your marketing and advertising, look at your turnover.
Specifically:
1. Total revenue
2. The cost of providing what you offer, food, service, recreation activities etc,
3. The cost of selling- to bring people in, promotions etc
4. The cost of administering your venue – insurances, accounting, administration etc
5. Profit/Loss
The numbers involved are found in your profit and loss statement. If you are providing food, entertainment or leisure activities, there are costs involved. Each activity you provide will have costs with variable margins (money left after costs are covered.) Surplus funds (profit) are used to fund administrative activities and other expenses, for example, capital costs are funded out of profit.
There is a direct correlation between what you spend on selling and revenue. The more effective your advertising spend the more revenue it should bring in. Some say spend 5% of revenue, others 25%. But it will all depend on margins and how you control costs. It may be as low as 1-2% depending on the industry.
The venues I work with advertise regularly, most often with direct mail campaigns with attractive offers. They also look to run monthly in-house promotions, giving customers an excuse to visit their venues. The result of their advertising is observable through revenue growth and that’s the biggest reason they keep doing it.
What do you think?
Feel free to call me on 1300 761 780 or email me at nigel@13thbeachclubsandpubs.com
cheers
Nigel Rawlins,
13th Beach Marketing Services Pty Ltd