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Tuesday, December 30, 2008
Introducing RealSkydiving
By mattchristenson @ 5:34 PM :: 4255 Views :: 0 Comments ::
 

The RealSkydiving business model.

RealSkydiving is a consulting company dedicated to increase the overall efficiency and success of the skydiving industry as a whole. The company was founded in 2006 and has been working since to grow our product and service offerings.

We created this company to provide the industry with services that would bring it into this new age of technology connected people and businesses.

Our first major offering is our Dropzone Management product, RealDropzone™, however our offerings will not to stop here. Providing a cost-effective enterprise class suite of applications to the Dropzone is just the first step. As the economy allows, and RealDropzone gets rolled out to dropzone’s both nationally and internationally, we will be working towards these other visions as well:

  • Interconnected Social Networking services
  • Skydiving Organization Online membership management services
  • Business-to-Business electronic ticket availability and sales through brokerage sites (think Travelocity, Expedia, Ticketmaster, as well as those services specific to relevant vertical industries and local markets)
  • Online document standards for communicating data entities such as jump log data, attached media, gear registration, repack notifications, safety notifications, and other industry specific uses.

RealSkydiving’s take on proprietary services

We understand that in order to benefit the industry as a whole, we must conform to existing document standards, and make any new standards accessible to anyone with no royalty fees or usage licensing. As we develop means to integrate organizations electronically with each other, or means of communication (document schemas and connectivity protocols) will adapt industry standards already established, and where necessary create our own standards which will be open for anyone to interact with.

Vision on next-generation marketing

Over the last few years the rate of growth in the skydiving industry has declined. This decrease in growth rate has been attributed to a number of economical reasons, customers no longer seem as willing to spend money on entertainment while gas prices continue to increase jump prices.

While economical pressures are a factor in the recent decrease of popularity in the sport, we feel that the primary cause is that the industry has not kept up with effective advertising techniques.

Dropzones continue to rely on old media such as radio, billboards, and bumper stickers for their publicity. Radio is being replaced with portable MP3 players, and today’s streets are so cluttered with advertisements that effectiveness has decreased while pricing increased.

Digital marketing is necessary for our industry’s growth.

Our primary demographic is spending a considerable amount of their leisure time on the computer. The skydiving industry has done a very poor job in adapting effective advertising online. When asked how aggressively they’re advertising online, most DZOs respond with a similar answer: “We use keywords on Google and a few other search engines. We tried banner ads once, but they didn’t work.”

Online advertising and marketing should be viewed in two categories:

  1. Target customers who are looking for your services.
  2. Target customers who are not looking for your services.

Purchasing the keyword “Skydiving” and “Your City Name” on search engines is only partially effective because you’re targeting a very small demographic: people already interested in skydiving.

What about the tens of thousands of potential customers in your immediate geographical region that would absolutely love to come skydive, they just haven’t thought of it!

Where are your most effective advertising dollars going, radio Ads, billboards, and bumper stickers? All of these are putting the idea of skydiving into somebody’s head – possibly for the first time.

How can the skydiving industry do a better job of catching the attention of new potential customers online?

Pay-Per-Impression and Pay-Per-Click advertising combined with accurate demographic targeting leads to a higher probability of success.

Pay-Per-Impression and Pay-Per-Click ads are old news; many companies have already tried this and watched their money seem to do nothing. Luckily, there is a new breed of these services available today that is made possible only by the huge success of social networking websites like Myspace, Facebook, and Friendster, as well as media successes like YouTube, SnapFish, and Google’s Picasa. Incredibly accurate demographic targeting allows your impression to reach customers who are statistically more likely to click your ad. Now you can target by zip code, age, sex, estimated yearly income, psychological profile results, purchase habits, and even addictive tendencies. There’s only one problem – Volume! In order to enter this new market of ad space, advertisers are looking for large commitments; $2,500/month with 6 month contracts. $15,000 is a big commitment; what if it doesn’t work?

There are 3rd party companies that you can work with who strike deals with the big guys and then offer $100-500/month packages – but how effective are they? They are hit and miss: sometimes you get a dud, and sometimes you get a gem. Demographic based Pay-Per-Impression and Pay-Per-Click advertising is considerably more effective than it used to be… but there’s still one major downside to it; Marketers ask for payment up front; and payment doesn’t always equal result.

You can eliminate your risk by only paying for success.

Pay-Per-Lead based advertising is an option that is just starting to gain in popularity; it requires an advanced software infrastructure to be able to participate, but the benefits are undeniable.

The premise is this: Marketing companies drive potential customers to your site using whatever tactics they’d like; you set up certain guidelines and sometimes provide graphics and content to be used and they do the rest. From online radio ads, to MySpace chain letters and trendy quizzes. Marketing companies get paid a commission on sales; they make money when you make money.

Payment is usually a percentage of pre-tax sales, or a percentage of profit margins, for all sales made by that customer for a given period of time – usually around 2 years. In order for this to work, a few different things have to take place:

  • The service or product supplier must be running a software system that tracks all customer orders – both online and point of sale transactions.
  • Marketers won’t get paid for every single sale they drive because user tracking is prone to failure. Tracking failure is caused by differences in browser privacy settings, cookie settings, corporate firewall policies, and an assortment of other issues. This is still a very effective form of advertising, but marketers are on the vulnerable side of the partnership; and they want to see a variety of tracking tactics implemented in a vendor’s website before they start a campaign.
  • Marketers are often hesitant to work with new industries or smaller clients because of the risk they’ve inherited. This can be overcome by using 3rd party firms who centralizes Pay-Per-Lead customers in a specific industry; and guarantee that certain technical tracking standards and sales auditing will exist.

Pay-Per-Lead advertising has been extremely successful in the retail industry, and continues to grow; as it grows marketing companies are willing to work for smaller percentages.

Business to business (B2B) services means working with the big guys.

B2B based broker interfaces is Pay-Per-Lead advertising’s older cousin. It’s been around for a lot longer, making its name in the travel industry and in wholesale. Due to the boom in Internet eCommerce and Business to Consumer (B2C) reseller portals, it’s become successful in the entertainment industry as well.

Being able to electronically offer availability, pricing, and commission offers as well as accepting actual purchases through a B2B information hub will open up a whole new world of marketing opportunity. Why not let marketing companies and travel agencies sell your product for you? Think about the industries that have already benefited tremendously from these tactics:

  • Airline Reservations
  • Train Reservations
  • Hotel Reservations
  • Rental Car Reservations
  • Amusement parks
  • Museums and Galleries
  • Live entertainment Venues
  • Wholesale distribution

Integrating electronically with ticket brokerage and travel brokerage services is where we want to be. It’s initial setup cost isn’t as cheap as Pay-Per-Lead advertising; but if that initial cost can be shared throughout the industry, there is no reason why dropzones can’t be selling tickets through travel agencies like Travelocity, Expedia, Orbitz, and other well known broker services. We envision a whole new era of industry growth as soon as we reach this point.

Don’t let profit forget about you.

It is incredible how many people forget how much fun they had skydiving and never return. Distance from the sport due to economical concern, time restraints, or involvement in a new hobby will pull customers away from you. Most Dropzone’s do little about this because they don’t have the correct tools to do it effectively. If you can get 5% of last year’s tandem customers to return next year and bring 2 friends each – that’s a 15% increase in revenue. Too many businesses don’t have a good way to answer important questions quickly or employ an automatic email engine to do the work of establishing contact and offering personalized offers to return. Think of the possibilities:

  • Offer all tandem customers from last year who acted as organizers for groups over 10 people a $100 discount off a tandem skydive if they brings 5 friends.  Offer all others $20 off if they show up on particular days.
  • Offer all customers who jumped once this year a second jump for $50 off, only if they have not returned in 2 months.  Make the offer valid only on a week day or during other low activity periods.
  • Automatically email every fun jumper a ticket that allows them their second jump free on their birthday.
  • Automatically email any fun jumper who has not jumped in over 90 days a free jump on next Sunday if they make at least one jump on Saturday.
  • Automatically email any student who has not returned for training in over 5 weeks that they are better off maintaining currency by jumping at least once a month through the student program, so that they’re less likely to have to repeat levels.
  • Automatically email students who did not finish your program in the spring with a coupon for 10% off a student jump package if they start the season early.

What good is an army if you’re not giving weapons to your soldiers?

How easy is it for you to reward experienced jumpers for bringing in tandems?  Why not give everyone the ability to print out $10 off tandem coupons online with a barcode / ID on it that credits that jumper for the sale?  To encourage strong loads you can implement a different value depending on the number of previous leads.  For example:

• Each of the first 9 redeemed coupons in a year earns $1 on your jump account.

• The 10th coupon redeemed in a year gets you a free t-shirt (or a beer?).

• Each additional lead gives you $10 off of one lift ticket.

This redemption curve helps eliminate fun jumpers who put a low level of effort in from making the system too expensive to implement. The system encourages lower income jumpers (College students) to attempt to bring in large school and organization groups.

Implemented as an automated system that requires very little staff resources; this can become quite valuable. Many dropzones already use this technique without the automation for assistance. Some dropzones have tried it but found keeping track of credits and discounts to cumbersome; and also have no way of supporting the system online.

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