Why is it important to review your sales mix? Here are 5 reasons why this should be reviewed on a regular basis to protect your business.
Here are the top 5 reasons why you should review your revenue sales mix on a regular basis (like regular, we are talking about monthly and if that is not possible, then at least quarterly). We know you are busy but we are going to show you why it is super important!
1: Highlights where your business is actually coming from.
We know that you have a pretty good idea where it comes from, but there is nothing better than data and you can’t argue with figures. It’s not too hard to discover this, you can pull a Booking Boss “purchasers report” via product and it will show every single booking made direct and via your trade partners for your select period. You can manipulate the data and a good idea is to place it into categories via product sold. An example of doing this include via Market and then via distributors working within this market who book direct with you.
Bookings made via:
- PTC > Pax numbers > Revenue
- ETA (AOT) > Pax numbers > Revenue
- NAPT > Pax numbers > Revenue
- Goway > Pax numbers > Revenue
- Southern World > Pax numbers > Revenue
- Swain > Pax numbers > Revenue
- Viator > Pax numbers > Revenue
- Expedia > Pax numbers > Revenue
- Livn> Pax numbers > Revenue
- Wholesale >
- Infinity > Pax numbers > Revenue
- Sunlover > Pax numbers > Revenue
- Qantas Holidays > Pax numbers > Revenue
- Agents direct
- Direct Bookings
- Keep these separate and you can via pulling an Orders Report, also view nationality (if you have been keeping track of this).
After doing this, you will quickly be able to see exactly where your business is coming from and the percentage that this attributes to your overall revenue. Keep in the revenue booked from each channel also, as you will be able figure out the average yield that channel is providing and map how it is performing against your forecast from setting your rates (as highlighted here).
2: Highlights your best markets.
You will quickly be able to see what market is working best for you. Is it Australian Domestic business?
You could be having great success from the US and China and soon see what markets are good to continue to work in and also ensure that you hold or increase your market share.
Over time of doing this process, you will soon be able to start comparing the data month to month - however as tourism businesses are generally seasonal, after 12 months of monitoring this data, then you will be able to compare against “this month last year” which will give you truer insights rather than comparing monthly.
When you get to this stage, you will be able to clearly see any changes in the markets.
This takes us to:
3: Highlights your worst performing partners and markets.
After some time as mentioned above, you will start to see the seasonal trends for each market and you will see if any partners are not performing to what you expected them to or are falling behind on figures from the previous period the year prior.
An example of why this is important is:
You notice that all your Korean Inbound Tour Operators are tracking flat. They have previously shown good growth but the last three months have stagnated and some ITOs have shown signs of decline. It prompts you to go and visit (or call) your top Korean Inbound Tour Operators to ask them why they think this is the case, and you find out that there has been some events in the market that has caused travel confidence to decline for the immediate future.
This allows you to re-forecast your projected revenue form this market accordingly so you shouldn’t have any surprises.
It also allows you to monitor the yield and while you might be seeing great passenger numbers from a particular market, you notice that the yield is quite low and you are not making as much revenue as you thought. It can be a note to put for your next rate review and also determine whether it is worth your sales and marketing dollars to continue to pursue this market in the short term when you may be making little money.
4: Makes visible any potential market changes.
Similar to the above point, you will pick up if there are any changes happening in the source markets, but also if you work in any specific segments of the industry (eg. backpacker or cruise) you will see whether there are any changes there. A client example that we have seen in the past includes:
“We noticed that the previous two years had great cruise day visitors visiting our attraction and this cruise season it had dropped 60%! So after a call to our STO we found that there had been issues with the cruise companies being able to dock for longer than a day and the overnight stays had reduced significantly. As we were an hour drive away from the port, they had stopped selling us as they didn't have the enough time in port to include us. While it was something completely out of our control, it meant that we were able to re-forecast that revenue out and were able to report to management exactly what the reasons were”.
5: Allows you to make decisions.
As you can see from the above, having data allows you to make better business decisions and some of these include:
- Why is this market growing? Do I need to contact X trade partners to find out why and is it worth for me to visit this market to assist in this growth?
- Why is this market declining? Do I need to contact X trade partners to find out why and is it worth for me to still visit this market to help stimulate growth or maybe it’s worth not visit at all?
- What trade partners should I visit/meet with? Data also will help you determine what questions you will have at these meetings.
- Is a particular product not performing? Does there need to be some product development or enhancements?
- Is there a market opportunity there? Do you need to do any product development for this market in order to assist it’s growth?
- Is your rates strategy holding up? Are we operating at maximum yields?
- What sales trips and trade shows am I attending that are most worth my while?
- Are my direct sales performing as well as they can? Do I need to review my website strategy to drive more business and/or do I need translated site and/or am I using the best social media platforms for these markets?
- Are there any one trade partner that provides too much business? This can be a risk as it is the old “all eggs in one basket” and what steps do I need to take to try and diversify my sales mix?
As you can see while reporting with regularity on your Sales Mix means that you are well informed on what is actually happening with your admissions and bookings revenue and helps you have better control over it. It helps you make the necessary decisions to best adapt your business accordingly and to ensure that you are future proofed with no surprises.
Remember, the more often you do it, the better insights you gain.
Good luck and Happy Sales Mix Reporting!