The real cost of chasing business


Now more than ever, venues are examining the cost of attaining/retaining business including the methods used. With expenses outpacing revenue, managers are now starting to explore their expenditure on AEMP (Advertising, Entertainment, Marketing and Promotions). We all understand promotional and marketing expenditure is a key driver of new and repeat visitation and spend, but how much should we be spending?

Keep reading to find out which expenses actually get included in your marketing and promotions budget, and how you can cut costs without sacrificing your most effective promotional tools.

Several publications such as Industry Data Online, have recorded an industry trend of marketing and promotional spend increasing over the last few years. In April 2011 the total cost of AEMP as a percentage of Total Club Revenue was 8.7% compared to April 2012 at 9.5%, and April 2013 at 10.2%. Considering the digital age and more reliance on email, this represents a large increase to the industry. Although this figure is a considerable sum, you may find your venue is spending more than you think. The accounting method used to capture this figure consists of the usual areas of expenditure, which generally covers;

  • Gaming promotions
  • Member promotions
  • Advertising and entertainment

However, the following areas are often disregarded as a part of this expense. This often includes activities and services such as:

  • Courtesy buses
  • Discounts and marketing department wages which all feed into producing entertainment, marketing and promotional activities!

Our industry, like others, is fiercely competing for the entertainment dollar. With consumers spending more time researching their options, every promotion and advertisement must capture and hold the consumers’ attention. The use of reward systems is very topical and, if not implemented correctly, may become burdensome on the financial return. As venues implement new or restructured reward systems and other promotional campaigns, each of these should be dissected prior to inception to establish costs and a regular ROI (Return on Investment) strategy. Additionally, we must measure the use of all advertising and marketing materials. It is very common for venues to implement a promotion or activity that, when dissected, ultimately loses the venue money.

Rewarding our loyal customers doesn’t always have to be about hard dollars, but creating a more “thoughtful” experience. Sometimes the best solution is the simplest. For example, helping a customer resolve an issue face- to-face instead of texting or emailing is more likely to create a memorable experience for that customer, as well as gaining positive recommendations for you and your venue.

One way or another, venues must examine each and every line item under AEMP each year and determine if the continuation is warranted. At the end of the day you must ask yourself, “If this was my money, would I do it?”

Sometimes the hard decisions are not made because of emotional attachment. DWS have assisted many venues in reviewing AEMP and providing benchmarking tools aimed specifically to your venue. For an independent audit please contact Danny Nixon-Smith on


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