It doesn’t make sense that Mississippi’s state tourism grants fund traditional marketing and disallow customer retention tactics.
This post has been brewing for a while. I knew from the moment I heard Leland Speed, our state’s economic development CEO, speak to the Mississippi Main Street Association last year about the vital importance of customer retention, that I had an ally. However, for some reason, this post has taken a lot of thought. So much thought that it’ll probably take a series of posts to voice my full feelings on this issue, but with the July 1 deadline for 2007 matching grants approaching, I feel obligated to speak out.
I don’t want to make this a political issue (heck, I campaigned for Haley Barbour and will again), but it’s my job to call a spade a spade, even if it is our state government. Maybe ESPECIALLY if it’s our state government – well funded by my entrepreneurial tax dollars. Even more, because the outcome of local, regional and state tourism marketing efforts directly affects the bottom line of my small business clients in the related localities.
After doing a bit of research, I believe that the problem isn’t exclusive to Mississippi, but I presume that Mississippi would wish to be progressive and proactive – taking a step forward away from the status quo when it comes to responsible use of our state’s tourism funds.
So, to address the problem directly: Mississippi issues tourism grants that cooperatively fund local and regional tourism efforts. There is a bi-annual application process to compete for the funds. The problem (excerpt from 2007 Mississippi Tourism Match Grant Guidelines):
Items eligible for funding consideration include:
1) Advertising through mass media, including newspapers, magazines, radio, television, billboards and Internet advertising (eligible up to 50% of total project cost).*
2) Research studies related to tourism and designed to provide accurate data on travel patterns, travel volume and expenditures.
It is widely accepted in marketing circles that the effectiveness of "advertising through mass media" has declined. Significantly. It is also widely accepted that multi-channel communication with past customers works. Really well. This isn’t just me, the out-of-the-box lean thinking marketing fanatic, talking – these are widely accepted facts.
So, why isn’t our state encouraging customer retention instead of this continual cycle of lost leads, lost relationships, and mass media mayhem (I mean, misspending). The current system encourages local and regional tourism agencies to spend 100% of their promotional dollars on marketing tactics that will qualify for the matching grant program.
My recommendations (which I will address in more detail in future posts):
- Encourage collection of customer/attendee data and related data management systems (which I have found are RARE if not nonexistent in our local tourism agencies or communities at large.)
- Encourage customer retention FIRST by funding customer retention tactics like email messages, direct mail campaigns, customer surveys or other forward-thinking retention/relationship building tactics.
- Quit padding the pockets of state and regional media outlets who are providing generous kick backs to advertising agencies.
- Reward good strategy and marketing innovation with post-project grant awards that can be used for future year projects.
- Demand REAL measurement that relates to financial benefit for the local community including small business impact – the backbone of our state’s economy.
Mr. Speed – Was I correct? Are you my ally on this issue?
