This paper develops an advertising and sales strategy for a home-based travel agent franchise — specifically a Cruise Planners/American Express Representative opportunity. It begins by establishing a realistic first-year advertising budget based on projected commission revenue, then evaluates the media landscape used by cruise industry competitors. The paper identifies affordable, targeted channels — including a search-engine-optimized website, social media advertising, and local press — that can generate approximately 250 qualified leads per year within a modest $3,500 budget. The sales section outlines a direct-to-customer distribution strategy, a first-year sales forecast of 100 cruises totaling $70,000 in commissions, and a lean operating budget that leaves a projected net revenue of $21,500.
Before embarking on any business opportunity, it is necessary to consider the viability of the venture, including how it may be marketed and how its products will be sold. If the new business is a franchise, it may be argued that some aspects of the concept have already been developed and that proof of concept exists. Even so, the potential franchisee must still consider advertising and sales strategy carefully. This paper examines those considerations for Cruise Planners: An American Express Representative, a franchise opportunity chosen in part because of its low initial investment requirement.
The first consideration is the advertising plan — specifically, what types of media may be used and how best to optimize the available budget.
The advertising budget for a business is typically between 3% and 5% of the firm's sales (Visa, 2007). In the case of a travel company, revenue is generated by commissions earned on travel products sold; therefore, the advertising budget should be based on commission income — the firm's actual revenue — rather than the total value of travel services sold. It may be estimated that this business will earn approximately $70,000 in its first year, based on an average commission rate of 14% applied to $500,000 in sales. At a 5% advertising budget, this yields an annual advertising budget of $3,500. Though modest, this sum can be used effectively if the right strategies are employed.
Media used by travel agents and the cruise industry varies considerably. Large cruise companies utilize mainstream mass media — including television, radio, and national magazines — as well as the internet. These highly visible channels help attract a mass market, supporting both direct sales and brand awareness that benefits agents selling their products.
Travel agents maintain websites and, depending on their size, may also use television, radio, national or local press, specialist magazines, and online advertising such as keyword search ads and banner advertisements.
The target market consists of consumers interested in taking a cruise holiday. This is a broad audience: in 2011 alone, an estimated 11.2 million North Americans took a cruise holiday in an industry worth $37.85 billion, and demand continues to grow (Florida-Caribbean Cruise Association, 2012). Given the size of this market, traditional mass media certainly reaches it. Many travelers also access the internet, including travel forums and review sites such as CruiseCritic.com, and use search engines to research options. Specialist cruise and travel magazines, national newspaper travel supplements, and local newspapers are additional channels likely to reach prospective cruisers.
"Identifies cost-effective channels and lead generation targets"
"Recommends direct-to-customer sales channel"
"Projects revenue, costs, and telephone sales process"
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