Allendale Language School
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The Allendale Language School must monitor its sales, unit costs, expenses, and key marketing metrics closely to determine if marketing is having the proper effect and the company is on target with its goal of 25% growth per year over the next three years. The growth in sales will be driven by an increase in leads (in part from a large increase in the number of referrals from students and businesses, as well as from good PR mentions and the persuasive effect of testimonials) and an increase in lead conversion rate (brought about by a better website and a more systematic sales approach with the company sales representative).
Marketing metrics will be tracked through Salesforce.com, making use of its Web-to-lead function and dashboard reporting. Expenses and sales will be tracked in QuickBooks, both through automatic entry from credit card transactions on the internet and manual entry of some sales and expenses by the company sales representative and bookkeeper. The CEO will look at reports from these programs on at least a weekly basis.
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Sales are projected to increase by 25% per year based on the systematic marketing activities, the untapped market in the Allendale area, and the availability of teaching talent. Foreign language classes are more numerous than ESL and make up twice as many enrollments. Seminars are primarily promotional events which offer an overview.
|Year 1||Year 2||Year 3|
|Foreign Language Enrollments||1,200||1,500||1,875|
|Foreign Language Seminars Attendees||850||1,063||1,328|
|ESL Seminars Attendees||638||797||996|
|Total Unit Sales||3,288||4,109||5,137|
|Unit Prices||Year 1||Year 2||Year 3|
|Foreign Language Enrollments||$900.00||$900.00||$900.00|
|Foreign Language Seminars Attendees||$20.00||$20.00||$20.00|
|ESL Seminars Attendees||$10.00||$10.00||$10.00|
|Foreign Language Enrollments||$1,080,000||$1,350,000||$1,687,500|
|Foreign Language Seminars Attendees||$17,000||$21,250||$26,563|
|ESL Seminars Attendees||$6,375||$7,969||$9,961|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Foreign Language Enrollments||$90.00||$90.00||$90.00|
|Foreign Language Seminars Attendees||$10.00||$10.00||$10.00|
|ESL Seminars Attendees||$7.50||$7.50||$7.50|
|Direct Cost of Sales|
|Foreign Language Enrollments||$108,000||$135,000||$168,750|
|Foreign Language Seminars Attendees||$8,500||$10,625||$13,281|
|ESL Seminars Attendees||$4,781||$5,977||$7,471|
|Subtotal Direct Cost of Sales||$169,881||$212,352||$265,439|
The marketing expense budget includes the cost of achieving all initial plan milestones and the ongoing operational cost of marketing activities over the next three years. Marketing expenses are somewhat seasonal, as there is a push to advertise each new season of classes in the month preceding the start of that season (December, May, and August). Some costs are spread through the year, such as satisfaction surveys, which will be administered every four weeks once they start. Expenses for 2010 will include some one-time rebranding and website redevelopment costs which will not have to be repeated in 2011 and 2012.
|Marketing Expense Budget|
|Year 1||Year 2||Year 3|
|Website and Facebook||$11,600||$2,880||$3,500|
|Total Sales and Marketing Expenses||$44,850||$31,880||$40,650|
|Percent of Sales||3.14%||1.79%||1.82%|
Leads must be generated in great volume to yield sales as the school receives a high number of leads (including referrals, website inquiries, seminar attendees, and calls) which do not convert. The conversion rate is currently 20% but expected to rise to 25% over the next three years with the improvement in the school's reputation and Web resources.
The average customer yields .15 transactions per month (1.8 per year), as a number of customers will take two classes in a year and some will take three. This is expected to rise in the coming years.
The average $/customer is based on the weighted class enrollment average between the foreign language and ESL classes.
Referrals are currently 20% of leads and this is expected to increase as a percentage of total leads over the next year and in the following two years. Referrals will include both customer referrals and professional referrals from businesses.
PR mentions will increase as the company builds a reputation in Allendale and begins to send more press releases about its work.
We expect to garner strong testimonials from 5% of customers. This rate isn't expected to increase, but the nature of the testimonials will change as the school begins to seek video testimonials instead of written testimonials.
|Key Marketing Metrics|
|Year 1||Year 2||Year 3|
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