The First Rule Of Profitable Online Marketing

You decide to advertise your business through leaflets because the business generated outweighs the costs. You decide to join the VisitScotland quality assurance scheme because the boost in bookings makes it profitable to do so. Why then, do most tourism businesses not take the same approach when it comes to Internet marketing?

Profit-oriented questions are, for example:

• How much will it cost to have a website built for my business? And how much will that website generate in inquiries and bookings?

• How much will it cost to advertise on a travel website? And what proportion of visitors referred by that website will eventually book a tours (or accommodation, short breaks, etc)?

Whenever you're faced with the decision to invest money in advertising your business on the Internet, always set costs against expected benefits. Are the returns acceptable or would your business be better off if you looked at other ways to advertise?

Figuring out exactly what results to expect from online marketing is difficult. It is particularly difficult to predict what profits a website will bring because there are so many variables involved. But there is one simple rule that simplifies matters greatly.

How much does acquiring one customer cost you, roughly? Using the Internet should bring you new customers at 30-40% less than that to make it worth while. The most profitable online techniques, however, can bring new customers at much, much less than that.

It is surprising, then, that in an industry where profit margins are so slim, most businesses do not measure the performance of their online marketing. You may have heard friends or business partners talk about paying several hundred pounds on their website but how many times do you hear them say:

'My website generated 10 bookings for the Loch Lomond package this week alone. That's a 20% increase on last month'. There are very few businesses that evaluate the ROI of their online marketing -- and those that do, promote their products far more effectively, enjoy higher profits and have a definite edge over their competitors.

Practical Example

A bed and breakfast website cost the owner £450. Hosting and maintenance costs him another £200 a year. The website, like most accommodation websites, has been produced without a monetization plan.

The general objective of the website has been to generate inquiries but little has been done to help it reach its goal. With small, if any, returns from his investment, this B&B owner now probably regrets his decision and will most likely not look at other online advertising opportunities.