Fuel powers your motorcycle. Similarly, marketing drives your company’s sales. Marketing is the fuel that keeps your revenue stream going.
If you crimp your gas line, your bike will slow down and not run right. Similarly, if you cut your marketing budget, your sales will quickly slow, and your company will not run smoothly.
With the above analogy, you can see why drastically cutting your marketing budget is problematic. When you make a significant cut, you reduce the budget for your motorcycle website’s marketing, SEO, web design, social media, newsletters, advertising, etc. All of these play a critical role in generating your website’s revenue. To see the value, check out these online marketing statistics.
I am not saying this because our marketing agency provides services. The article below explains why you shouldn’t cut marketing and offers some alternatives.
First, cutting your marketing budget kills both your short-term and long-term sales. It is an “out of sight, out of mind” situation with your prospects, new customers, repeat customers, and lifetime customers; they won’t think of your company or products if they don’t see them. Hopefully, your manager and business owner understand this before they make cuts.
Improve Your Biker Sites’ Bottom Line
Next, from a financial perspective, how can you improve your bottom line? First, you can increase your revenue. Second, you can decrease expenses.
Your website’s marketing person is a big part of your sales. If the economy is a disaster, your agency’s role might differ. In that case, it might just be to keep your sales at the same level. Keeping the business open during challenging economic times can be an accomplishment.
Incorrectly assigning blame to your marketers for not performing in a poor economy is a big problem, especially when precise marketing data shows the reasons behind lower sales.
True marketing experts, whether internal employees or an external agency, have other options. If they can’t convince higher-ups of the reality, beating their heads against the wall gets old fast, and they will eventually quit.
The same goes for being blamed for problems they can’t solve without a budget. They’ll leave your company for the same reason. Then you’re down a marketing person. This means your motorcycle company either has one less person or no one to handle the remaining marketing items in your budget.
Next, hiring a new biker marketing expert takes time. It is important that you understand the difference between hiring a rider and a passenger. It will also take the new person time to ramp up, during which your revenue will slow. Also, your new marketing person will quit if unrealistic expectations are still pushed.
Marketing Expenses
Notably, sales aren’t the only goal of biker marketing. Granted, they should pay for themself. And by this, I’m talking about the net after the following marketing expenses are subtracted:
- The cost of advertising is directly related to your product’s sales.
- Cost of the product sold/cost of goods sold.
- Handling expense
- Packaging expense
- Shipping cost: The total shipping cost is often not included in the final sales price. And this is because free shipping usually helps close sales. So, whatever part of the total shipping cost is not collected in sales should be included as a sales expense.
- The amount of salary/pay your marketing person receives is directly related to a particular marketing or sales effort.
Benefits of Breaking Even
What value does breaking even bring to your business? One is for branding your company and website. And the more positive interactions and transactions there are, the better for your branding. Another reason to break even is to get rid of dead stock, which are motorcycle products with low demand and low turnover.
Here’s an example with a motorcycle rally shirt. Let’s say you have a Harley dealership. After a rally, the company has leftover shirts. As you know, riders won’t be interested in buying last year’s shirt. Next, your HD dealership has spent money on the bike rally’s shirts. And they need to be liquidated to recover the cost of the shirts.
Hopefully, your dealership made a lot of money selling the shirts before or during the rally. Of course, your dealership should have anticipated that not all your shirts would be sold. Subsequently, the owner or managers of your business will have put together a sales forecast. And they should understand the necessity of liquidating unsold inventory. All that being said, with dead stock, someone needs a marketing plan to execute that plan.
Increasing the Size of Sales
One way to increase your net profit is to raise the price of each sale on your motorcycle site. This can be accomplished in several ways:
- Increase the total sales amount.
- Sales bundles are where multiple related motorcycle products are sold together. They are usually sold at a discount, but total revenue and net profit will be higher when selling multiple products.
- Cross-selling is where riders buy additional items that they might be interested in.
- Up-selling – An example of up-selling is someone buying the premium version of a motorcycle product rather than the standard version.
Next, to do the above correctly, a marketing person is needed. They must have the skills, know the history of the biker world, and ride.
Also, the motorcycle website developer will most likely be involved. And this is so they can set up the upselling or cross-selling. If it is already set up, there’s a good chance it will need to be tweaked by the designer to accomplish new goals.
Just as your bike needs maintenance and updates, your website does too. Without maintenance, your bike or website will break down.
Examining Sales Expenses
Another way to make a motorcycle website profitable is to lower your expenses. And the first step is to examine your expenses.
Then the marketer, the accountant, and the manager must work together. Each brings unique value and insight to the evaluation of expenses. For instance, your marketer will understand sales and marketing data. But web tools like Google Analytics or Facebook marketing reports aren’t easy for everyone to read.
Even if non-marketing people can read the data, your marketing person will likely need to interpret the data. Finally, your marketer must explain the reports to the others.
Raising Prices
Now, prices can be raised. But what if the product is a commodity? By commodity, I mean products that are identical or nearly identical. Here’s an example using a Harley jacket. Since they are sold at endless locations, they are a commodity. If it is sold by itself, riders will look at several items:
- Cost of the Harley jacket
- Shipping expense
- Company reputation
- The trust of the company selling the jacket
- Reviews and testimonials about the quality of your customer service and products or services
However, the total cost of the jacket will often be the deciding factor. Therefore, value must be added to sell this jacket at a higher price. For instance, free returns or free shipping are valued by riders. Notably, this helps new or unknown motorcycle companies overcome the trust factor.
Another way to sell at a higher price is by providing a better buyer’s journey. You always want it to be easy for customers to buy. But the marketing person, with their tool’s data, can help improve the journey. When the journey is simple, it reflects well on your biker company. And when it is simple, your prospects won’t check out as many competitors’ websites.
One way to do this is to improve the product pages. It would help if you made it easier for people to quickly find all the information they need to purchase on your website, including on product pages. To do this, your marketing person, the motorcycle search optimization team, and the web designer will need to be involved.
Here are three other ways you can increase your sales:
- Increase the perceived value of your offering.
- Utilize the “zero-price effect” – This psychological phenomenon happens when you give away something free, and people put more value on that item than it is worth.
- Increase your sales with world-class service.
In summary, you don’t want to cut your marketing budget. It is what fuels sales. Plus, there are other options to increase your company’s revenue.
