3 Questions to Ask Digital Marketing Agencies|Avi Arya

Recently I got a call from a travel agency which is making 60 lakh rupees a month. But they don't want to reinvest more than 50,000 rupees. They asked me if I can find them a cheaper agency. And that sort of infuriated me because I said I do not understand how an entrepreneur can think of doing business without wanting to invest. Most travel companies don't do well online. I see so much friction between agencies and travel agencies and digital marketing agencies. Because travel agencies don't want to spend. Digital agency markets are not able to explain to them how they work without spending. And therefore there are loggerheads. Eventually they say yes to a deal which is never going to work and it's a recipe for disaster. It's a race to the bottom and nobody's happy. If you're looking for an agency, ask your agency these questions. Hi everyone, my name is ABHI Arya and in today's video, I am going to help every travel agent and tour operator out there crush it on the Internet. Crush it means crush it. I get a lot of calls from travel agents, tour operators, ticketing agents and saying, Abhi, we are in 2023, getting into 2024. How do I make money online? So my first question is, how much money do you want to make? Well, Avi, I believe the sky's the limit with digital marketing. I said, yes, it is. How much money do you want to make? Well, let's say I want to make 10 lakhs. Awesome. That's a great start. 10 lakhs a month is a great start. Can you tell me about your services? So the travel agent tells me, avi, I sell tickets. I make 500 rupees for a domestic ticket and I make thousand rupees profit on a international ticket. Great. Third, I sell tours within India and that tour gives me about 5000 rupees profit. Excellent. Then I have an international outbound tour as well which gives me about 15,000 profit per trip. But Abhi, why are you asking me profitability for my tickets, for my outbound, for my inbound, for every package. And here is the answer. The first thing that you need to understand even before hiring an agency is to be able to understand the cac which is the cost of acquisition of your customer on the Internet. For example, how much money do you need to spend on Facebook ads to be able to get one customer to buy? Say you shoot a video and you say, hey, my name is Avi Arya. This is my ticketing agency. This is how I can help you people click, they see an ad, they look at your price. 10 people click in one buys, for example, every click is 50 rupees. 10 times people will click, one person will buy, which means you spent 500 rupees for the cost of acquisition of one ticket. Now, if you're making only 500 rupees, you're breaking even. If you're not making 500 rupees, you're not even breaking even. So that is how you calculate the CAC for a air ticket. If the same CAC came for an international ticket, you would save 500 rupees because you were making 1,000 rupees on an international ticket. If the same cac came for your inbound travel, for your travel within India, you would save 4,500 rupees because you had 5,000 rupees profit and 4,500 you're saving. If the same CAC came for your outbound, you would save 14,500 rupees. Now, once you've understood how the CAC works, now you go on Google. Look at the top 10 digital marketing agencies that have worked with travel agencies in the past. I always believe in subject matter experts. If your first five agencies, when you interview them, ask them to show you case studies of travel agencies like yourselves who have had similar challenges and they have helped them. Because if they understand the sales cycle of a travel agency, you've won half the battle. Number two, ask them what is going to be the cost of acquisition of a customer? What are going to be the projections? And remember, these are just projections. No agency can 100% predict what's going to happen. So 500 rupees to acquire a ticketing customer, about 2,000 rupees to acquire an international customer. And then eventually these cost of acquisitions can go down or stay the same, depending on the season, depending on how many other people are bidding on those keywords. Now you have four products. Domestic tickets, international tickets, domestic tours, and international tours. You're making maximum money on international tours. Now you're like, okay, and I'm making, I could make money on all four. How much money should I now allocate on all four services on ads? Now, a good agency would suggest a budget of at least 30,000 rupees per segment with 30,000 on tickets, 30,000 on international tickets, 30 for domestic and 30 for international, which means 1 lakh 20,000 only to run ads. On top of that will be the agency fee. An agency fee to have a dedicated project manager should be at least 1 lakh rupees. A smaller agency will charge 50,000 rupees and mind you, with 50,000 rupees they will work with multiple clients because that's how the business model works. Now if you try to shortchange the agency or ask them to reduce their price, they will work with even more clients with that same project manager. You will not get the time from that person. So remember, have a reasonable ask when you work with a digital agency. Most travel companies don't do well online because they are not ready to invest money in the agency fee and in third party ads. Now if you feel you don't have budgets to go and put 30,000 rupees approximately in all four segments, go for your most ROI based segment which is your international tour where you say maximum. So put in a 30 to 50,000 rupee budget for the first three months. Let's see how many tours are converted. And once you're able to see that I spent 50,000 rupees a month and I got 5 lakh worth of business, now you have a 1, 10 ROI. Now double it, triple it. Because it's not always going to be the same. Your keywords start doing well, competitors are going to start coming in. So double it and triple it. Now that you have money coming in from there, take that money reinvested into your domestic tour where you save 5000 rupees. Then reinvest that money into your international tickets. Then reinvest that money into your domestic tickets. Eventually you should be spending three to five lakh rupees a month on agency ads and agency fee to be able to get 15 to 20 lakh rupees. According to me, a 3 to 5x ROI for a travel agency which has all these four products with these kind of similar profitability should be the right model for you. If you're looking for an agency, ask your agency these questions. Number one, how many other travel agencies have they worked with? Show me the case studies. Number two, what is the cost of acquisition? Let them prepare this for you. Third, if you're an agency watching this video, this should be your format to pitch to a client. I see so much friction between travel agencies and digital marketing agencies. Because travel agencies don't want to spend. Digital agency markets are not able to explain to them how it will work without spending and therefore there are longer heads. Eventually they say yes to a deal which is never going to work and it's a recipe for disaster. It's a race to the bottom and nobody's happy. I am making this video because recently I got a call from a travel agency which is making 60 lakh rupees a month. But they don't want to reinvest more than 50,000 rupees. They asked me if I can find them a cheaper agency. And that sort of infuriated me because I said I do not understand how an entrepreneur is think of doing business without wanting to invest. And I do understand and do empathize the travel agents. Because I've been a travel agent for six, seven years of my life. I won every single award for every domestic airline. I will bring almost 1 crore rupees in sales every month. And I'm talking about 15 years ago. So I understand the game very well. And now for the last 14 years I've been a digital marketing agency owner. So I understand this game as well. Allow your agency to present a plan. Allow agencies that understand hospitality and travel to work with you. Allow yourself to trust in the medium. And if for some reason this video does not resonate with you and you're not able to spend the money or invest the money, then my advice to you would be for you and your family and your core team members to take a course in digital marketing in absolute detail. A good course should be anywhere from 60 to 60,000 to a lakh of rupees for six months or eight months. Immerse yourself in those verticals. Understand this and then come out. And then watch this video. After six months it'll start making more sense to you. Because as you have an in house finance team, as you have an in house HR team, it is time that you have an in house digital marketing team as well. But at the same time you will still need to depend on an agency which has all the learnings that are happening in the world out there. So just like you have a chartered accountant who is an external advisor and you have your accounts team at home, similarly you will have a digital marketing team at work and you'll also have an agency out there. And also for people who are working in digital market or in travel agencies. And you have been employed by your boss to say now I want to do digital marketing and you do everything. Show your boss this video. Do not over pressurize this. One person, one person cannot do anything. Doesn't matter what their resume says. Yes they can write copy, yes they can do SEO, but they cannot do it all. It takes too much time. You have to have at least four people in your team. A content writer, a paid ad expert, a social media expert and somebody who understands project management and website. So either you have four people and an agency or you have one coordinator and an agency. But don't put too much pressure on your in house team. They are not getting the kind of learnings that they need to get without the support of an agency. This is how the whole ecosystem works. Watch this video from scratch once again and if it resonates with you, send me your comments. Let me know what else I can do, what other videos I can make to be able to make the life of a travel agent easier. I know there is huge money to be unlocked but I also know that you need to unlock your mind from the way that it operates. Today I meet thousands of agents during sati. I speak at various travel forums around the world and I see this as a common problem. But there are travel agents and tour operators who are doing extremely well doing Google Ads, YouTube ads and those are the people who are going to win. I'm going to make a series for travel agents and tour operators. I hope this video resonated with you. Thank you very much for watching and I look forward to seeing you in the next video. SA.