Diversifying your marketing efforts can protect the financial independence of your company and help you increase your ROI.
Just like investing, it pays to diversity your marketing efforts. Many professional managers are stuck in the rut of just posting their properties on advertising sites and relying solely on those channels for bookings. But, as we’ll outline in this post, there are multiple benefits to diversifying your marketing efforts – so you’re not held hostage to one or two channels for your financial success.
But, before we take a look at why diversifying your marketing will help, let’s define what we mean by diversification. For the purposes of this post, we’re going to say that diversification is being active on multiple marketing channels – channels not being just listing sites, but any way in which you can reach potential guests. Channels encompass advertising sites, but also include things like SEO, email marketing, Adwords, Adsense Remarketing, social media, blogging, public relations, print advertising, and local partnership and affiliations, among others.
So now that we have defined diversification, let’s take a look at some of the reasons why diversification is good when it comes to marketing.
Financial Independence / Leverage
The problem with relying solely on one or two channels for marketing is that you have no leverage when the channel costs increase. This is especially relevant to short-term marketing strategy channels like advertising sites, which only produce revenue while you are paying for them.
Realize this: If you get all of your bookings from one channel and that channel become more expensive, you are virtually forced to pay more. Plus, as a middle man, your owners are also expecting continual returns on their investment, so that puts even more pressure on you to get results, locking you in to channels and forcing you to increase your costs. And, when you pay more for marketing and don’t get greater returns, it cuts into your commissions and lowers your profits.
Simply put, you need alternatives. And you have to realize that some of those alternative you can’t just turn on at a moment’s notice; rather, they have to be built over time.
Everything changes. 60 years ago, print advertising was the bread and butter of most marketing departments. 30 years ago, TV and radio were the top dog. Nowadays, internet marketing is king. But, even internet marketing has changed dramatically in just the past few years.
You need to be prepared for the effectiveness of every single one of your marketing channels to either increase or decrease as consumer trends change. Developing multiple marketing channels is one way to weather that change. It gives you time to adjust to the change in one channel, because you are supported by your other channels. In some cases, you may even need to be prepared to stop using a channel altogether because it doesn’t provide enough return on investment.
Reaching Different Customer Types
Your potential guests will vary in their shopping behaviors. Older guests will certainly find you through different means than your younger guests. International guests different than domestic guests. Men different than women. High income different than low income. The best way to be successful in marketing is to understand where your potential customers are and be in all those places.
Return on Investment
If you’re only using one type of channel, how can you compare your ROI? You simple can’t, because there is nothing to compare it to. Using multiple channels gives you perspective on which of your channels is performing better, especially how that channel’s ROI is changing over time. Sometimes, ROI goes up and down seasonally, or is different for different customer types. If you don’t invest in different marketing channels, you won’t have that type of data to draw from.
The Cross-Pollination Effect
One great thing about having multiple marketing channels is seeing how they all work together. For example, how are your blogging efforts affecting your SEO rankings? How are advertising inquiries fueling your email marketing lists? How is traffic from all channels fueling your Adsense Remarketing efforts?
Marketing generally follows the rule of “The whole is greater than the sum of its parts.” Your marketing channels don’t just sit in different rooms and not talk to each other. They interact with each other and increase each other’s effectiveness.
Having multiple marketing channels gives you more room for testing new ideas. If you only had one marketing channel, you wouldn’t want to take chances with it, because it would be your sole earner. Having multiple marketing channels gives you a platform to test the effectiveness of different messages across different mediums and across different demographics. And, after a while, you’ll start testing new channels and adding to your marketing arsenal.
One of the most important things about having multiple marketing channels is that it allows you to focus on both short-term and long-term strategies while you build equity from your marketing efforts. What we mean by equity is marketing that continues to work when you are no longer paying for it or at least not dedicating as many resources to it. Some short-term strategies can get you great results immediately, but as soon as you stop investing in them, they stop producing revenue for you. Other channels that may take longer to development (like SEO) will continue to produce revenue for you even if you slow your investment in them.
Think of building equity as building your brand. As your brand grows, you become less reliant on marketing. Marketing is really the act of getting your product or service in the mind of your potential customers. Once you’ve built a home in their mind, everything gets easier. When you start to generate brand recognition, you’ll have people come straight to you. And, when people come straight to you, you both save money AND are far less reliant on any specific channel. And, when you decrease your reliance on any one channel, you can focus more on the channels that provide the best ROI (so you can earn more profits).
Learn More About LiveRez
LiveRez is the fastest growing vacation rental software provider for professional vacation rental managers. The company’s cloud-based, end-to-end platform offers fully integrated solutions for reservation management, trust accounting and online marketing, with high-ranking, high-conversion dynamic websites and an extensive affiliate marketing program. The company is a proud Gold Sponsor of the Vacation Rental Manager’s Association (VRMA).
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