‘Ask Mike’ — your questions answered
What percentage of my turnover should I be looking to invest in sales and marketing? There seems to be a lot of conflicting advice about how much to invest to gain more market share.
Jo Chalker, Dion champagne bars
I don’t recommend allocating a specific percentage of your turnover to sales and marketing. You need to look at your particular business and decide the most cost-effective sales and marketing campaign.
Your model is both ‘business to consumer’ (you’re looking for individual customers to come to your bar) and ‘business to business’ (you want to encourage companies to hold a corporate event or party on your premises). In both cases, the best approach is to promote your bars by word of mouth, the cheapest and most effective way to get new business.
I recommend two styles of activity: ‘Hunting’ and ‘Farming’.
‘Hunting’ involves a member of your staff who is gregarious and a natural networker spending time with local businesses. They need to charm their way past security and talk to receptionists, office managers and the like offering a special deal for their staff to come down to your bars. Hunters are always looking to identify the company ‘Maven’ — the person who is social, popular and well connected in the organisation, and is always recommending to their co-workers the new and exciting places to visit.
Mavens are potential ambassadors for your business and should be given special status, recognition and privileges, for example three bottles of champagne for the price of two on otherwise quiet nights. These ambassadors should be contacted regularly via e-mail with your latest offer or special event.
‘Farming’ also involves looking for Mavens, but this activity is almost exclusively done in your venue. Farmers identify the Mavens whenever they visit your bars.
Mavens like to talk to bar staff — a good sign is when they both know each others’ first names. Make sure your Farmers offer these customers ambassador status – perhaps they would like to bring down some more of their work colleagues next time?
Finally, you should reward your effective ‘Hunters’ and ‘Farmers’. If they recruit ambassadors they should receive a bonus, a percentage of the incremental sales generated by their activities.
This process is time-intensive, but relatively inexpensive and has the additional benefits of motivating your staff and encouraging good team behaviour.