Marketing as a Profit CenterPublished on July 1, 2022
Welcome to summer! That time of year when we sit back, relax, and realize it’s too late to increase sales for the summer season… or is it?
I will agree, if your slips or boat clubs are not full it will be significantly more difficult to make up for lost time. However, it is never too late to ramp up your efforts to focus on marketing as a profit center.
Traditionally we define a profit center as a unique business within a business. For example, at our marina, Rockvam Boat Yards, Inc. in Spring Park, Minnesota, a few of our profit centers are a boat club, dry stack, and a repair shop. These areas of our business each produce their own profit, but, they also are integrated under one business model.
So how can marketing possibly be a profit center? It costs money, right? Wrong. Marketing can be responsible for its own profit, if you start to look at it as a revenue-producing portion of your business.
Let’s take a look at the good and ugly of how this works. As you can guess, I’m starting with ugly.
If you saw $10.00 laying on the sidewalk, would you stop and pick it up? Gosh, I sure hope so. How about if you had a pocket full of change and magically all of the change disappeared. You examined the pocket and discovered a hole. Would you sew up the hole or would you just wonder why your change disappears and fill the pocket up again with quarters?
This is what ugly is all about. You need to fix the hole in your pockets and keep the money you have. Your marketing messaging can actually work against you, and you may not even realize it. I consider the word “wenches” the number one culprit. Unless you are running a fully immersive pirate extravaganza at your marina, why on earth would you set yourself up to call women “wenches” on a bathroom door?
Here’s another “Hall of Fame” for ugly marketing: marinas that actually sell the following signs in their ship’s store, “B.O.A.T. Bust Out Another Thousand” and “The Best Two Days in Boater’s Life: the day they buy and the day they sell their boat”. Why would you spend thousands on advertising the boating good life and then turn around and sell a sign with a message like those? Imagine your customer paying a $5,000 repair bill, turning around, and seeing one of these signs. You might as well tell them they are making poor financial decisions and wasting their money. It’s ugly.
Another ugly in the overall marketing of your marina are the boats at your facility. I’m not talking about the age of the boats, I am referring to the names on the stern. If you are spending thousands in advertising to attract women boaters, yet your numbers are not increasing, I want you to take a dock walk and look at what subliminal message you are sending.
And my fourth ugly is any type of website that promotes the misfortune of another boater. It is terrible to celebrate the failure of a boat at a launching ramp, especially in the era of social media. It’s not funny and, in fact, it hurts the entire industry. If you are trying to attract new boaters to your facility and you find it hilarious to watch people struggle at the ramp, so much so, that you share posts on your feeds, why would anyone want to come to your business?
Our industry is huge, and there is a place for everyone. If you are comfortable with your clientele, keep doing what you are doing. However, if you are spending thousands in advertising and you can’t increase revenue in your repair shop, you repel women, and have no new boaters at your facility, you may want to examine if you are succeeding at ugly marketing efforts.
Now that we have sewn up the hole in our pocket, let’s explore the fundamentals of marketing as a profit center.
How does marketing become a profit center? It happens like this; a customer comes into your marina and says they love receiving your newsletter and they are signing up for winter boat storage even though you have not started advertising this service.
Your marketing profit center will generate sales through the power of email and consistent communication. You will be creating a vibe for your business. This will attract the people you want to work with and repel the ones you do not. The consistent communication builds your story through “gives” so when you do have an “ask” it generates sales, and when done properly the marketing average is $1 generated per email on your list every month. This is not a guarantee, but if you have an email list of 100 you can likely attribute $100 in sales to your email efforts. The more emails the more revenue.
You may still wonder how marketing can be considered a profit center. How is it different from posting on Facebook or Instagram? When you create an email list it is actually an asset you own. The list you develop and curate through consistent information is under your total control. You have CAN-SPAM laws to follow, but you do not have the rules of another entity, such as Facebook, to abide by. Any social media platform can lock you out of your account and all the efforts are gone. An algorithm on Google can stop your traffic overnight. It’s not fun when it happens. But your email, it’s like a mini-ATM creating your vibe and creating money.
Another asset found in marketing as a profit center is your domain. If you don’t believe me, what happens if you do not renew your domain and someone else buys it? That’s very scary. This means that when you sell a business your domain should be valued as an asset because it’s an extremely important revenue generator and should be treated as such. Most businesses ignore this, and it is implied in the sale, but I argue that this asset needs its own valuation and its own protection in your assets.
Are you seeing the value of adjusting your view of marketing as a profit center? It’s a paradigm shift, but right now you have assets not being housed anywhere in your financial statements and you are generating income that can be directly related to the assets.
So, how do you make money from email? It’s simple, but not easy. The reason most businesses do not have a strong email marketing presence is due to the dedication you need to allocate to this profit center.
Buying an ad is easy. Creating content takes time. However, I will tell you it can be extremely valuable. We send out a weekly newsletter to our email subscriber list. It is a sampling of fun special events taking place over the weekend. I also attach an email that gives a general update on what is happening at the marina. This is our fifth year sending out our Tonka Thursday newsletter, and I estimate we have had over 500,000 people receive a copy of the weekly email.
Our snowbirds love keeping up on “what’s happening at home” and our locals take part in the activities. This is our opportunity to create our vibe. This summer we have been expanding the presence by including weekly specials and promoting our Rockvam Rewards program for loyalty discounts. This is only possible due to our cultivation of the list with the marketing tactic of “ask” and “give”.
An “ask” is just as you imagine, when you ask for someone to do something or buy something. A “give” is when you share information without an expectation of selling or receiving something. You want your “gives” to outnumber your “asks” at least three to one. No one likes to be constantly sold to and email is a wonderful format to provide information. This is why Tonka Thursday has a strong open rate. It is only a marketing “give” of information.
When you are ready to start your own marketing as a profit center make sure to get a good email service provider. Do not use your personal email account and send the emails as bcc’s. This is a violation of the CAN-SPAM Act. When you start an email marketing program, you can use a basic email provider such as Mail Chimp or Aweber and work up to a more robust program such as Keap, Active Campaign, or Klaviyo. Keep it simple to start.
Begin with a paper email collection form on your counter. Right now is the perfect time to start! You still have floor traffic and the ability to grab customer email addresses is easy… always make sure to get permission for marketing. Starting now allows you to prepare for the holiday season. Imagine in October if you have an active email list that you can market items to such as your t-shirts and sweatshirts. The possibilities are endless. If you are interested there is a free download at StartCollectingEmails.com that I created to help get you started.
The only step that remains is to keep your messaging consistent and in the form of a “give”. It really is a simple process.
Remember, marketing can be profitable and deserves to be considered as its own profit center. Just make sure to watch the subliminal messages you are displaying and start collecting those emails! I’d love to hear your success stories, or if you have questions, just email me!
Roxanne Rockvam is the general manager of Rockvam Boat Yards Inc. in Spring Park, Minnesota. She can be reached by email at email@example.com or by phone at 952-454-4681.